5 Things You Should Know About Electric Car Leasing
Here are five things you should know before you begin an electric car lease.
Electric car leasing can be an attractive option for drivers that don’t want to purchase an EV outright. This could be for financial reasons, or because you’re not sure you’re ready to commit to a car for the foreseeable future.
Either way, there are some vital things you should know before you decide to lease an electric car.
What is Electric Car Leasing?
Car leasing is the act of paying a monthly fee in return for a car – not too dissimilar from renting a house or a flat. You do not legally own the car, but you have full use of it for the duration of your contract.
When your contract ends, the car is returned, and you are free to lease a new car. This is particularly attractive to drivers who enjoy driving the newest cars on the market or find it hard to commit to one model for a long time.
However, like all contracts, there are conditions and specifics to be aware of before you sign on the dotted line of an electric car lease.
5 Things You Need to Know About Electric Car Leases
1: You Have to Pay an Initial Payment
The cost of the initial payment is usually 3, 6, 9, or 12 the size of your monthly electric car lease payments. You may be able to choose this – the more you pay initially, the less your monthly payment will be, or you may not have to pay into the contract for as long.
The initial fee is usually in the thousands, so it is important to know you can afford this before you sign any contracts.
2: You Only Get a Certain Amount of Miles
A condition of your electric car lease contract is that you are limited to a certain number of miles that you are allowed to drive – this is to reduce unnecessary wear and tear on the vehicle, and to ensure the vehicle doesn’t depreciate more than expected.
The average number of miles driven per year is 7,400. Many leases will allow you to choose the number of miles you are permitted per year.
It is important to consider your average mileage before you sign a contract – consider how many miles your daily commute is, as well as how far any other daily or regular trips are.
Doing some quick maths could save you from paying the mileage fee.
3: You Will Have to Pay a Charge if You Surpass the Agreed Mileage
If you do surpass your contracted number of miles, you will have to pay a fee. This is to cover the amount of depreciation of the vehicle due to the higher mileage. The excess charge per mile will range from anywhere between 6p to £1.
Some companies will increase this cost with how far you drive – for example, up to 10% of your mileage will cost you 6p a mile, but anything over 10% will cost you 9p a mile. This is something you need to take into consideration should you decide to get an electric car lease.
4: You May Have to Pay for Maintenance
It is your responsibility to look after your electric vehicle whilst you are leasing it. This includes taking the car for services and MOTs if necessary.
The warranty will only cover parts of the car that are not expected to break – parts that are not to do with driver error, such as worn brake pads. However, you will be expected to cover things that aren’t covered by the warranty, such as lightbulbs, wiper blades and tyres.
Many electric car leasing companies allow you to add on an additional maintenance package for a cost. This will cover fair wear and tear, services, breakdown cover, and most electrical repairs.
Each maintenance package will be different though, so it is important to ensure you know what is included before you decide to add on the maintenance package.
5: You’ll Need to Think About Your Energy Tariff
Of course, the monthly lease cost does not include the price of charging your electric vehicle, so you need to take into consideration how much that is going to cost you. There are free chargers around, but most people tend to charge at home. There are specific energy tariffs that are aimed at drivers of electric vehicles.
There are often specific conditions to use these tariffs, such as having a smart meter installed. This is something you’ll ideally need to have sorted as soon as you drive your EV home for the first time.
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