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Should you lease or buy an electric vehicle? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial decisions by offering interactive tools and financial calculators as well as publishing quality and impartial content. This allows you to conduct your own research and compare data for free - so that you can make financial decisions with confidence. Bankrate has partnerships with issuers including, but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make money The products that appear on this site are from companies that pay us. This compensation may impact how and where products appear on the site, such as such things as the order in which they be listed within the categories of listing in the event that they are not permitted by law. Our mortgage, home equity and other products for home loans. This compensation, however, does not influence the information we provide, or the reviews that you read on this site. We do not cover the vast array of companies or financial offers that may be accessible to you.



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6 minutes read. Published 23rd September 2022
Authored by Rebecca Betterton Written by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers with the ways and pitfalls of using loans to buy the car they want.







The edit was done by Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate since the end of 2021. They are passionate about helping readers feel confident to control their finances with precise, well-studied facts that break down complicated subjects into digestible pieces.









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The market has seen a dramatic increase in the last year, EVs and hybrids made up 4.5 as well as 6.6 percent of registrations from January through June 2022, according to a 2022 second quarter market trend report by . But even as options outside of Teslas and Toyotas expand, jumping the deep end to a new car could be a daunting task. With an average cost of more than $66,000 on the market for an electric vehicle there are plenty of options -- financially and logically. If you're in a category of curiosity rather than confidence, an electric vehicle can help you determine if an eco-friendly ride is the right choice for you, and is a good choice for those ready to commit. Leasing versus buying an EV
The lease of an electric vehicle can allow you to experience hands-on driving the vehicle that is otherwise costly However, it can be more expensive in the long run , if you exceed the limits or when you reach the end of your lease.


Do you prefer to lease or purchase an electric car? In terms of the decision of whether it's easy to determine which route is most beneficial for you and your pocket. If you plan to change up your vehicle every few years and you are able to manage the limitations on mileage, then leasing could be a great option. If you're looking for the freedom of ownership purchasing is the best option. However, the field of electric vehicles remains just beginning to take off, the sales of electric vehicles are growing each year. So signing off on the long-term ownership of a car which is not yet on the market can feel risky. To decide which option is best for you consider the benefits and disadvantages of each. The pros to leasing an EV vehicle warranty . Lower monthly cost. tech features
Cons of leasing an electric vehicle The speedier depreciation of the vehicle Inability to sell vehicle Vehicle restrictions

Benefits of leasing an electric car The advantages of an electric vehicle come down to added protection with a full-service -- meaning fewer trips to the mechanicand a lower monthly price and access to the most recent technology. The warranty for vehicles generally leases last between 24 and 36 months, and in that time your vehicle may encounter technical problems. When it comes to EV servicing, it is the requirement to replace the battery is probably the most typical issue that you may encounter. But when leasing the vehicle, it will remain covered by warranty, giving you the chance savings of thousands. A lower monthly cost Leasing a car allows you to use the vehicle for a specified period of time and pay every month. It often costs less each month than a monthly car loan for the same vehicle. On top of a lower monthly cost, you will also spend less money upfront and likely quit the dealership without any cash down. Leasing costs less
The cost per month for leasing a brand new car in the fourth quarter of 2022 was $540 versus $667 when buying as per .


Latest tech features Although models change from year to year for traditional vehicles aren't significant, the field of electric vehicles is growing at a faster rate. Leases give you the chance to be ahead of the curve with the latest technology, rather than being stuck with last year's accessories. The Hyundai Kona for example was upgraded in the 2021 to 2022 model, including an updated infotainment center and the latest driver assistance technology. The drawbacks of leasing an electric car While leasing an electric vehicle may provide you with the benefits of driving on electric power, it can also have its own disadvantages. Most notably, the issue of lease approval, inability leave the lease and restrictions on the vehicle. A lease approval for a vehicle can prove to be a lot more difficult than an auto loan -- especially for those with bad credit. Even if you are eligible to lease a car even without a perfect credit score, it's likely to result in a higher monthly cost. Take a look at that the credit score average of people leasing new cars in the first quarter of 2022 -- 736 -- that is above the average of 729 for an loan according to Experian. The inability to sell the car Leaving a car lease isn't simple or cheap. Therefore, if you decide not liking the vehicle that you lease, you'll likely be trapped in the lease or be forced to pay huge fines to exit the . Based on the terms of your lease and the terms of your lease, you could be required to pay the remaining value in addition to any remaining charges and lease payments. Car restrictions when signing off on an there are a few main factors to consider such as mileage, maintenance and vehicle modification. If you lease your electric vehicle, you will likely be limited to driving from 12,000 to 15,000 miles a year. You may also have to pay for and cannot customize the car. If you are considering buying an electric vehicle, there are pros to leasing an EV Full ownership No vehicle restrictions Credits and tax incentives
Cons to leasing an EV Costly upfront, rapidly changing technology Out-of-pocket repair costs

Benefits of purchasing an electric car The main attraction of instead of leasing comes down to the joy of ownership. You can do whatever you would like with your vehicle and not be restricted by what the leasing company has available or worrying about the cost of costs. As an owner of an electric vehicle you are also able to take all the tax benefits and credits which otherwise would be directed to the lessor. Complete ownership, based on your financial position purchasing an electric vehicle can permit you to go move at your own pace and give you complete control of the vehicle. You will have a firm understanding of the total cost in advance, without having to worry about potential wear-and-tear charges that can add to the total cost at the end of the lease. No restrictions on your vehicle If you feel that your freedom on the open road should not have any restrictions, buying an electric vehicle could be a better option for you. This way you will not be shackled to the odometer on your vehicle and you can take advantage of the open road. In addition to the freedom to drive without limitation, full ownership allows you the freedom to include any bells and whistles that suit you to customize your vehicle. Tax incentives and credits When purchasing an EV, you can take advantage of a variety options of incentives. One of which is the tax incentive, which can be worth up to $7,500 dollars. Some states also offer rebates to reduce the price of acquiring the most environmentally-friendly vehicle. These incentives are available only on behalf of those who are the owners, so if you were to lease you won't be able to benefit from them. There are some disadvantages to buying electric cars The electric vehicle market has grown and more economical options are popping up, but these vehicles do have a higher price tag over conventional vehicles. Prices are higher, but they also include rapid technological advancements and increased maintenance costs. Expensive upfront cost tend to be more costly than conventional vehicles, the average being $66,997, as per Kelley Blue Book June 2022 data. Electric vehicle drivers typically carry almost identical credit profiles as those who finance luxury vehicles and paying for them, as per an . This makes the process more difficult for those with less than perfect credit scores. Shop and save Borrowing money for an electric car requires the same steps as it would take to save money on a conventional loan Check out the options, apply for loan and don't be afraid to leave. Rapidly changing tech Innovation in the field of electric vehicles is fast and this is particularly true as legacy manufacturers, like Ford which has Ford's Mustang Mach-E and Chevrolet's Bolt have entered the market. However, this also means that you'll be stuck with the currently available tech that is in the car you purchase. Although the latest developments may appear minor to the untrained eye, if a flashy technology is the main reason for buying a car, consider leasing to stay current with the latest the latest trends. Out-of-pocket repair costs As with every vehicle you own it is your responsibility to pay for any required maintenance that is required in the course of ownership. But with the electric vehicle, this maintenance could be more expensive than normal visits to the mechanic. Although the warranty for the battery's component is likely to extend five to 10-years, EVs require replacement for additional costly repairs, such as screens as well as advanced system updates. The bottom line It is recommended to consider the issue of leasing versus buying an electric vehicle in the same manner as you would with a traditional car. For some, the benefits of the latest technology may outweigh the lack of full ownership -- while for others, taking the steering wheel of a car with confidence and incentives makes more sense. If you choose to purchase an EV, to understand the additional costs of ownership and take advantage of . Leasing an EV, in contrast will require the same care that it typically. Review a few offers and understand the whole of the contract before committing to the lease.


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Writen by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers to navigate the ways and pitfalls of using loans to buy the car they want.



Editor: Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate since the end of 2021. They are passionate about helping readers gain confidence to take control of their finances by providing concise, well-researched and well-informed data that breaks otherwise complicated topics into bite-sized pieces.






Auto loans editor




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