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Do you need to lease or purchase an the electric vehicle? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators as well as publishing quality and impartial content. We also allow users to conduct research and compare data for free to help you make informed financial decisions. Bankrate has agreements with issuers, including but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The offers that appear on this site are from companies that compensate us. This compensation could affect how and when products are featured on the site, such as such things as the sequence in which they appear within the listing categories in the event that they are not permitted by law for our loan products, such as mortgages and home equity and other home loan products. This compensation, however, does affect the content we publish or the reviews you read on this site. We do not contain the entire universe of businesses or financial offers that may be available to you.



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6 min read Published September 23, 2022
Writen by Rebecca Betterton Written by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers to navigate the ways and pitfalls of taking out loans to purchase an automobile.







Editor: Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate since late 2021. They are dedicated to helping their readers gain the confidence to take control of their finances with concise, well-researched and well-read information that breaks down otherwise complicated topics into bite-sized pieces.









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The market has exploded over the past year, EVs and hybrids made up 4.5 and 6.6 percent of new registrations between January and June 2022,, according to a 2022 market trend report for the second quarter of 2022 report from . Although the options outside of Teslas and Toyotas increase, committing the deep end to a new model of vehicle can be daunting. With an average cost of more than $66,000 on the line for an electric vehicle, the options are endless economically and logically. If you're in the category of curiosity , not conviction, an electric car will help you determine whether an eco-friendly vehicle is the right choice for you, but is not recommended for those who are ready to commit. Lease versus purchasing an EV
Leasing an electric car can allow you to experience hands-on driving an otherwise expensive car, but can cost more in the long run if you exceed the limits or at the end of your lease.


Do you prefer to lease or purchase an electric car? In the question of whether to it is fairly simple to figure out which is best for your budget and you. If you intend to switch up your vehicle every few years and can handle mileage restrictions then leasing can be great. If you're looking for the flexibility of ownership purchasing is the best way to go. But the world of electric vehicles is just beginning to take off, when sales of electric vehicles increase every year. Therefore, committing to the long-term ownership of a car that is a bit new could be risky. To decide which is the best option for you, consider the advantages and drawbacks of each option. The pros to leasing an EV vehicle warranty Lower monthly payment Newest tech features
Cons of leasing an electric vehicle Faster vehicle depreciation Inability to sell vehicle Vehicle restrictions

Benefits of leasing an electric car advantages to an electric car come down to added protection by a complete -- meaning fewer trips to the mechanic -- a lower monthly cost and the latest technology. The warranty for vehicles generally leases last 24 or 36 months, and in that time your vehicle may encounter technical issues. When it comes to EV upkeep, the requirement to replace the battery is probably the most typical issue you might encounter. If you lease, however the vehicle, it will still be covered by warranty, giving you the chance saving thousands. Lower monthly payment Leasing a car allows you the ability to drive the vehicle for a specified period of time and pay every month. It typically costs less per month than the monthly car payment for the same vehicle. Along with having a lower cost per month you'll also pay less money upfront and likely leave the lot without putting any cash down. Leasing costs less
The cost per month for leasing a new vehicle for the quarter ending in 2022's fourth quarter was $440 versus $667 when buying as per .


The latest tech features Even though model changes year over year for conventional vehicles are not dramatic, the EV field is advancing at a much quicker rate. Leasing will give you the opportunity to stay on the cutting edge when it comes to available technologyinstead of being stuck with last year's accessories. The Hyundai Kona, for instance, has seen some significant improvements from the 2021 to 2022 model which include a modernized infotainment center and the latest driver assistance technology. Drawbacks of leasing an electric car While leasing an electric vehicle can provide you with the benefits of driving on electric power, it can also come with some downsides. Primarily the challenge of lease approval, inability to quit the lease, and restrictions on the vehicle. A lease approval for a vehicle can prove to be much more difficult than obtaining an auto loan -- particularly for those with bad credit. While you may still be permitted to lease even with having a perfect credit score, it's likely to mean a steeper monthly payment. Take a look at your credit scores for those leasing new cars during the first quarter of 2022 -- 736 -- which falls above the average 729 score for a loan, according to Experian. The inability to sell the car Leaving a car lease isn't simple or cheap. If you do end up not being satisfied with the vehicle you are leasing, you could be entangled in the lease or be required to pay substantial penalties to get out of the . Depending on your lessor and the terms of your lease, you could be required to pay out the residual value in addition to remaining dues and fees. Car restrictions when signing off on an there are a few main things to be aware of such as mileage, maintenance and vehicle modification. If you lease your electric vehicle, you'll likely be restricted to driving between 12,000-15,000 miles per year, may have to pay for maintenance and can't modify the vehicle. The benefits of buying an electric car to leasing an electric vehicle Full ownership with no restrictions on vehicle size Credits and tax incentives
There are disadvantages to leasing an EV Costly upfront, rapidly changing technology Out-of-pocket repair costs

The advantages of buying an electric car The main appeal of not leasing comes down to the excitement of full ownership. You can do whatever you want with your car without having to limit the lease options the company makes available or worrying over fees. As an owner of an electric vehicle you are also able to take the full benefit of tax incentives and credits that otherwise would be attributed to the leasing company. Complete ownership, based on your financial situation, buying an EV can allow you to at your own speed and place you in total control of the vehicle. You will have a firm grasp on your total cost upfront instead of worrying about wear-and-tear costs that could add up at the end of the lease. No restrictions on your vehicle If you believe that freedom and the open road should not have any restrictions, purchasing an electric vehicle might be the best option for you. You won't be held captive by the vehicle odometer, and can enjoy the freedom of the open road. Other than the ability to travel without restriction and with complete ownership, you have the option of adding any bells or whistles that fit your preferences to create a unique vehicle. Credits and tax incentives when buying an EV you are able to take advantage of a variety of financial incentives. One of them is the tax incentive, which can be valued at up to $7500 dollars. Many states also offer rebates to reduce the price of acquiring an environmentally friendly vehicle. However, these rebates are only available to the owner of the vehicle. Therefore, if you were to lease you wouldn't be eligible for these incentives. The disadvantages of purchasing electric cars The electric vehicle market has grown, and more budget-friendly choices are emerging, but these vehicles do have costs that are higher as compared to conventional options. Higher prices also come with rapid technological advancements and increased maintenance costs. Expensive upfront cost tend to be much more expensive than traditional vehicles, with at an average of $66,997 according to Kelley Blue Book June 2022 data. Electric vehicle drivers typically have almost identical credit histories to those financing luxury cars and pay , according to a . This could make getting the approval process more difficult for those with less than perfect credit scores. Save money and shop for an electric car requires the same method as it could use to get a lower interest rate on an ordinary loan: Shop around, apply for loan and be prepared to walk away. Rapidly changing tech Innovation in the field of electric vehicles is rapid and this is particularly applicable when older brands, such as Ford with Mustang Mach-E and Chevrolet's Bolt, Mustang Mach-E and Chevrolet's Bolt, enter the space. But this growth also means that you'll be stuck with the latest technology that is in the car you purchase. While the advancements might seem minor to the untrained eye, if flashy tech is the main reason for buying a car look into leasing to keep up with fashions. Out-of-pocket repair costs As with every vehicle you own, you must pay for any maintenance required during the ownership. However, when it comes to an EV, this maintenance could be more costly than regular trips for a mechanic. Although the warranty for the battery will probably extend five to 10 years, EVs require replacement for additional costly repairs, such as screens and advanced system updates. The bottom line It is best to approach the question of leasing versus purchasing an EV in the same way you would in the case of a conventional vehicle. For some, the advantages of the newest available tech may outweigh the lack of ownership in full and, for others, taking the wheel of a vehicle with confidence and with incentives makes sense. If you decide to purchase an EV be aware of the extra costs that come with ownership and take advantage of . leasing an EV, contrary to what you might think is as demanding as it would typically. Check out a few leases and understand the whole of the contract before committing to an agreement to 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 ins and outs of securely taking out loans to purchase an automobile.



Editor: Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate from late 2021. They are passionate about helping readers gain confidence to manage their finances by providing clear, well-researched information that breaks down complex topics into manageable bites.






Auto loans editor




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