Electric cars are becoming more popular and affordable thanks to their lower running costs, lower emissions, and advanced technology. Leasing an electric car can be a smart option for those who want to enjoy these benefits without committing to a long-term purchase. However, leasing an electric car also has some challenges and pitfalls you must be aware of before signing the contract. We will explain how to lease an electric car, what are the pros and cons of leasing, and what are the best lease deals available right now.
What is leasing an electric car?
Leasing an electric car is similar to renting a car for a fixed period of time, usually between two to four years. You pay a monthly fee to the leasing company, which covers the depreciation of the car, the interest rate, and other fees. You also pay a down payment at the beginning of the lease, which reduces your monthly payments. At the end of the lease, you return the car to the leasing company and walk away, or you can buy the car for its residual value, which is the estimated value of the car at the end of the lease.
Leasing an electric car has some advantages over buying one. For example:
- You can get a newer, more expensive electric car for a lower monthly payment than buying one.
- You can enjoy electric cars' latest technology and features without worrying about obsolescence or battery degradation.
- You can take advantage of tax credits and incentives that may be available for electric cars in your state or region.
- You can avoid the hassle of selling or trading your electric car when you want to switch to a different one.
However, leasing an electric car also has some disadvantages that you need to consider. For example:
- You have a limited mileage allowance per year, usually between 10,000 to 15,000 miles. If you exceed this limit, you will have to pay extra fees per mile at the end of the lease.
- You have to maintain the car in good condition and follow the manufacturer’s service schedule. If you damage the car or neglect its maintenance, you will have to pay for repairs or penalties at the end of the lease.
- You do not own the car and cannot customize it or modify it as you wish. You also must pay hefty fees or penalties to transfer or terminate the lease.
- You may not get the full benefit of the federal tax credit for electric cars, which is up to $7,500, depending on the battery size and manufacturer. The leasing company may claim this credit and pass some or none of it to you as a discount on your lease.