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Do you need to lease or purchase an 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 financial calculators and tools as well as publishing quality and impartial content. We also allow you to conduct research and examine information for no cost - so that you can make sound financial decisions. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make money The products that appear on this site come from companies that pay us. This compensation may impact how and when products are featured on the site, such as, for example, the order in which they may appear in the listing categories in the event that they are not permitted by law for our loans, mortgages,, and other products for home loans. But this compensation does not influence the information we provide, or the reviews that you read on this site. We do not include the entire universe of businesses or financial offerings that could be open 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 to navigate the ways and pitfalls of borrowing money to purchase an automobile.







Edited by Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate from late 2021. They are committed to helping readers to take control of their finances with precise, well-studied data that breaks complicated topics into bite-sized pieces.









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The market has seen a dramatic increase in the last year, hybrids and electric vehicles comprised 4.5 or 6.6 percent of registrations from January through June 2022, according to a 2022 market trend report for the second quarter of 2022 report by . However, even as alternatives beyond Teslas and Toyotas expand, jumping head first to a brand new vehicle type could be a daunting task. With an average cost of more than $66,000 on the market for an electric car, the options are endless both financially and rationally. If you're in a category of curiosity , not conviction, an electric car will help you determine whether an eco-friendly car is the right choice for you, while is best for drivers ready to commit. Lease versus purchasing an EV
Leasing an electric car can give you hands-on experience with an otherwise expensive vehicle However, it can be more expensive in the long run , if you exceed the limits or at the end of your lease.


Is it better to lease or purchase an electric car? In terms of the decision of whether to it is fairly simple to determine which route is the best choice for you and your wallet. If you are planning to swap up your vehicle every few years and can handle limitations on mileage, leasing could be a great option. If you're looking for the freedom to own your vehicle purchasing is the best option. But the world of electric vehicles is still at its beginnings, when sales of electric vehicles increase every year. Therefore, committing to long-term ownership for a vehicle which is not yet on the market could be risky. To decide which option is best for you, consider the advantages and disadvantages of each. Leasing an electric car Pros to leasing an electric vehicle guarantee Lower monthly payments Newest technology features
Cons of leasing an EV Faster vehicle depreciation Inability to sell the vehicle

Benefits to leasing an electric car The advantages of an electric vehicle are based on the added security with a full-service that means less trips to the mechanicwhich means a lower cost per month and access to the most recent technology. Vehicle warranty Generally, vehicle leases last between 24 and 36 months, and during this time frame, your vehicle might encounter technical problems. In the case of EV upkeep, the need for a new battery is probably the most typical problem you could face. However, when you lease the vehicle, it will remain covered under warranty. This gives you the potential savings of thousands. Lower monthly payment Leasing a car allows you the ability to drive the car for a predetermined period of time and pay each month. It is usually cheaper each month than a car payment for the same vehicle. In addition to a lower monthly cost it also costs less money upfront and likely to leave the dealership without any cash down. Leasing costs less
The cost per month for leasing a new vehicle in the fourth quarter of 2022 was $540, compared to $667 when buying the car, according to .


Newest tech features While models change from year to year for conventional vehicles are not as dramatic for electric vehicles, the field is advancing at a much faster rate. Leasing will give you the opportunity to be ahead of the curve in terms of available technologyinstead of being stuck with the previous year's additions. The Hyundai Kona model for instance has seen some significant improvements from the 2021 model to 2022 model which include a modernized infotainment system and the latest driver assistance technology. The drawbacks of leasing an electric vehicle While leasing an electric vehicle may provide you with the benefits of driving on electric power, it can also come with some disadvantages. The main issue is lease approval, inability leave the lease and limitations on your vehicle. Lease approval to lease a car can be more challenging than for an auto loan -- particularly for those with bad credit. Even if you are permitted to lease even with an excellent credit score, it's likely to lead to a more expensive monthly payment. Consider that the credit score average of people leasing new cars in the second quarter of 2022- 736 -- that is above the average of 729 for an loan as per Experian. The inability to sell the car The process of letting a car lease end isn't simple or cheap. So if you end up not being satisfied with the vehicle you are leasing, you could remain within the lease or required to pay substantial fines to exit the . Based on the terms of your lease or lender, you could be asked to pay for the residual value in addition to any remaining dues and fees. Car restrictions when signing off on an you will need to consider a number of aspects to look out for: mileage, maintenance and modification of the vehicle. If you lease your EV you'll likely be restricted to driving anywhere from 12,000-15,000 miles per year. You could also be required to pay for maintenance and will not be able to customize the vehicle. The benefits of buying an electric car to leasing an EV Full ownership No restrictions on vehicle size Credits and tax incentives
There are disadvantages to leasing an EV Pricey upfront cost, rapid changing technology Out-of-pocket repair costs

Benefits to buying electric vehicles The major benefit of buying an electric car instead of leasing is the excitement of full ownership. You can do whatever want with your car without being limited to the lease options the company makes available or worrying over costs. As an owner of an electric vehicle, you can also take full advantage of tax incentives and credits which otherwise would be given to the lender. Full ownership Depending on your financial position buying an electric vehicle will permit you to go at your own speed and place you in total 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 could add up after the expiration of a lease. No restrictions on your vehicle If you believe that freedom and the open road should not limit you, purchasing an electric vehicle might be the best option for you. This way you will not be restricted to the odometer on your vehicle and can enjoy the freedom of the open road. In addition to the freedom to drive without limitation, full ownership allows you the ability to add any bells or whistles that fit your preferences to create a unique vehicle. Incentives and credit purchasing an EV you are able to avail a myriad options of incentives. One of them is the tax incentive, which can be valued at up to $7500 dollars. A lot of states offer rebates to reduce the price of acquiring an environmentally friendly vehicle. However, these rebates are only available on behalf of those who are the owners, so even if you lease the vehicle, you would not benefit from them. The disadvantages of purchasing electric cars The electric vehicle space has expanded, and more budget-friendly options are popping up however, these cars still tend to carry more cost as compared to conventional options. The higher prices are also associated with rapid technological advancements and increased maintenance costs. Expensive upfront cost tend to be much more expensive than conventional vehicles, at an average of $66,997 as per Kelley Blue Book June 2022 data. EV drivers also tend to have similar credit profiles that those who finance luxury cars and paying , according to a . This can make the process more difficult for borrowers with less-than-perfect credit scores. Saving money and shopping to purchase an electric vehicle needs the same method as it can use to save money on an ordinary loan: Shop around before submitting an application for loan and don't be scared to leave. Technology is constantly evolving. Innovation in the electric car field is fast and this is particularly true as legacy brands, such as Ford which has Mustang Mach-E and Chevrolet's Bolt, Mustang Mach-E and Chevrolet's Bolt are able to enter the market. However, this also means you will be stuck with the currently available tech that is in the car you purchase. Although the latest developments may appear minor to the naked eye, if the latest technology serves as a main attraction you should consider leasing in order to keep on top of the latest fashions. Costs for repairs out-of-pocket every vehicle you own, you must pay for any necessary maintenance required during the ownership. But when it comes to an EV, this maintenance can be much more expensive than typical trips to the repair shop. While the warranty on the battery component will likely last between five and 10 years, EVs require replacement for other expensive repairs such as screens and system updates that are more advanced. The main point is that it's ideal to think about the decision of leasing versus buying an electric vehicle the same way as when for a conventional car. For some, the advantages of the latest technology may outweigh the lack of full ownership -- while, for others, getting behind the steering wheel of a car with confidence and incentives makes sense. If you decide to purchase an EV be aware of the additional costs of ownership and take advantage of . leasing an EV, in contrast is as demanding as it would typically. Review a few offers and be aware of the entirety of the contract prior to signing the lease.


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Authored by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers to navigate the details of taking out loans to purchase a car.



The edit was done by 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 the confidence to control their finances with concise, well-researched and well-informed data that breaks otherwise complex topics into manageable bites.






Auto loans editor




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