Should You Lease an Electric Car?

• Leasing an electric car can help you decide if electric vehicles fit your lifestyle and keep you on the cutting edge of EV technology.  
• Most new EVs come factory with an 8-year, 100,000-mile battery warranty, removing some of the stumbling blocks concerned customers had about EV battery longevity. 
• Consumers gain access to tax credits of varying amounts for leased, used, and new EVs, depending on individual eligibility. 
• FINN electric car subscriptions offer the convenience of short terms with a set monthly payment and no down payment required.

The arguments for leasing or buying an electric car keep (and have kept) several hundreds of thousands of people on the fence. The age-old discussion of leasing vs. buying aside, the biggest question facing electric vehicles is long-term feasibility. Battery technology continues to evolve, but it’s only once current technology reaches time-specific milestones that industry experts can determine the true cost of electric car ownership. 

In current market conditions, tax credits and extensive 8-year, 100,000-mile warranties sway much of the driving public toward electric cars. Yet when the powers that be closed part of the Tesla lease vs. buy discussion by removing lease buyouts from consumer agreements, many prospective buyers opted to lease first, then (potentially) buy. Even with more lessees instead choosing to buy, gambling on an electric car lease versus getting stuck with an aging electric battery after making a significant investment is practically a no-brainer. 

Many lessees don’t realize that FINN offers an even more practical solution that’s convenient and flexible to meet nearly any lifestyle. FINN gives subscribers the chance to test-drive an electric car in addition to the following benefits: 

• Flexible six or 12-month terms
• Select vehicles based on preference, including make, model, trim, and color
• Upgrade mileage limits to fit your lifestyle
• Your monthly payment includes registration, insurance, maintenance, and depreciation
• FINN conveniently delivers your new subscription straight to your door 
• No down payment required
• Ability to prequalify for approval

FINN requires drivers to be at least 25 years old with a valid driver’s license that’s at least two years old. However, only those drivers who don’t meet specific credit requirements are subject to a security deposit. FINN also waives the disposition fee if you re-subscribe to another vehicle. 

Is a leased Tesla Model Y or Audi A5 Sportback in your immediate future? Read on to learn why you should or shouldn’t lease an electric car. 

Insurance

Car insurance rates on a leased vehicle typically cost more than a car you own outright. The leasing company sets coverage limits high enough to recuperate their costs should the insurance company deem the vehicle a total loss after an accident. In addition, EVs cost more to insure because they incur higher repair costs. These two factors combined can skyrocket your car insurance rates if you’re not already paying for high coverage limits, including full coverage. 

Depreciation

When you lease a car, even if you get one of the best car leasing deals, you pay for depreciation. For example, if you lease a Volkswagen ID.4, you’re reimbursing the Volkswagen dealer for the depreciation of that vehicle from the time you lease it until the lease ends. Cars that depreciate quickly have lower residual values, meaning you can purchase those cars for less once your lease ends (if a lease buyout option is available). In contrast, higher residual values, such as those typically seen with EVs, result in lower monthly payments but a higher lease buyout price. 

Tax credit 

EV tax credits go both ways. When you lease a car, you are eligible for tax credits from the manufacturer. However, that’s assuming the manufacturer does pass on those tax credits, which is not always the case. Even if those credits do appear in your lease, they’re often a reduction of the sticker price, which may or may not incorporate the tax credits already. 

Traditional leasing terms

EV leases maintain the same advantages and disadvantages of traditional leasing, including:

• Smaller down payments
• Warranty and some maintenance coverage 
• Eligibility restrictions and required lease approval 
• Additional fees, which can include acquisition fees, disposition fees, early termination fees, and excessive mileage or wear-and-tear fees
• No investment once the lease ends
• Many lease agreements lack a buyout option

If you know how leasing a car works, you’re probably already familiar with these points. However, electric vehicles can make you look closer at the benefits of leasing versus the downsides. 

Avoid obsolete technology and cost-prohibitive maintenance 

The bottom line is that leasing an EV helps keep you in an electric car with the latest technology. Any maintenance necessary on the EV you trade in becomes the responsibility of either the leasing company or the car’s new owner. No long-term commitment also means avoiding warranty paperwork or paying outright for a new battery that could cost more than the car itself. 

Leasing an electric car can help you test-drive an EV without a long-term commitment. If you’re concerned about Tesla reliability, a Tesla lease can tell you everything you need to know about Tesla ownership. You may find that starting with a mild hybrid like an Audi A3 Sedan is more your pace before you make any EV purchase. 

Tax credits

Owning an EV can help you earn a tax credit in the year you purchased it, whether new or used. However, fewer electric cars qualify for the full $7,500 tax credit, and many automotive manufacturers remain confused about which models qualify and which don’t. If you’re unsure about claiming your EV purchase on your taxes, speak with a licensed tax professional. 

The freedom of ownership

Owning an EV—or any car, for that matter—allows you to modify, sell, trade, or otherwise manipulate that vehicle how you see fit. You’re not limited in mileage, where you take it to get repaired (although qualifications to service an EV are a consideration), what modifications you want to make, and if you want to sell or trade it in on another vehicle. 

Aging technology

Similar to the latest laptop, smartphone, or other technological accessory, electric vehicles tend not to age well. Instead, they’re left with outdated and even obsolete technology that no longer exists. This fact can make repairs and even replacing specific components difficult or next to impossible. Finding a repair shop certified in and knowledgeable of your particular electric car can also stop you in your tracks. 

Lack of a secondary EV market

In a similar vein, selling your EV to a dealer or private party can present a unique challenge. Some dealers may offer you top dollar for your EV since they are popular among consumers, especially with the rise in gas prices. However, electric vehicles that haven’t maintained their resale value may only fetch you a few thousand dollars’ worth of trade-in value. 

High maintenance costs

With specialized components, electrical hazards, and beta technology come high maintenance costs that sit directly upon the shoulders of consumers. Electric vehicles cost more to maintain, even if they don’t carry the same slew of fluids as internal combustion engines. For example, a Tesla’s brake calipers require special lubricants that cost—you guessed it—as much as an oil change. 

Fewer incentives 

Electric car manufacturers tend to advertise better leasing deals than financing offers. In fact, many manufacturers have since removed lease buyouts from their lease agreements because EVs aren’t yet profitable compared to gas-powered cars. It’s more cost-effective to lease an EV multiple times and then sell it than to allow consumers to buy their leases directly. 

Affording a Tesla Model 3 monthly payment pales in comparison to the extensive costs that come with replacing an EV battery. However, many experts argue that now is a good time to buy an electric vehicle. Many automotive manufacturers are slashing prices on EVs, which can help put you behind the wheel of an ultra-quiet and efficient vehicle. If you’re still on the fence about hybrid vs. electric and how to choose between them, a mild hybrid like the Ram 1500 can help give you the context you need to make a more informed decision.  

Leasing an electric car for two or three years offers plenty of time to determine if an EV truly fits your needs, from range and charging costs to feasibility. However, most people reach a conclusion about EVs within a few months. If that conclusion means an electric car just doesn’t fit the bill, those remaining few years can drag out endlessly. For those who purchased an electric vehicle, ridding yourself of your eco-friendly mode of transportation can present a daunting task. 

A FINN car subscription offers consumers access to an electric vehicle without all the strings of a lease or purchase attached. Instead, you can drive an electric vehicle (or two) to get a feel for how they operate, how much they cost to fuel, and what issues you come across. Short subscription terms last between six and 12 months, giving you plenty of time to test-drive without burdening you with excessive time if you don’t need it. In a nutshell, subscribing to a FINN electric car could give you the best of leasing and buying without spending hours in the financing office negotiating your terms.