Electric Car Lease

Spoodzilla

My 10 year of Diesel needs more work than its worth. Diesel is at £1.90 a litre.
Used prices have jumped 28% in 6 months, so my £12k budget for a replacement estate will get me something 4-5 years old with 40k on the clock. 

Looked at EV as an option. I can get a decent sized vehicle with a 250 mile range for £280 a month with £2k up front over 5 years. I'm currently spending £200-£240 on diesel and doing 95% town driving so the saving in fuel costs is my justification for the switch. 

I've never leased before. I can get a 2 - 5 year option on this vehicle. I wouldn't consider buying/ PCP, happy to hand it back as I'm sure the battery would be starting to degrade by then. The car has a 7 year warranty so I'm not going to be liable for any repairs. 

Is there a disadvantage to what I am paying out over the term of the lease/ tying myself in for 5 years that would mean shorter is better? 

I welcome you comments/ advise!

Herzlos

Just in flexibility - leases don't really have any flexibility, or are expensive to get out of early.

So if you're not sure, go for a shorter term.

It sounds like you'll likely save enough in fuel costs to more or less pay for the lease.

Do you have access to charging at home or work?

Spoodzilla

Herzlos said:

Just in flexibility - leases don't really have any flexibility, or are expensive to get out of early.

So if you're not sure, go for a shorter term.

It sounds like you'll likely save enough in fuel costs to more or less pay for the lease.

Do you have access to charging at home or work?

I'm not worried about having the same car for 5 years, it would be a novelty to have one that actually lasts that long! I suppose its about doing the sums to work out the cost of ownership for 5 years vs buying a used diesel/ petrol and paying for MOT/ servicing/ repairs/ fuel. 

I've never considered leasing or electric, but with the fuel price difference it seem to makes sense. Although watch me sign up to this and fuel prices hit record lows...

The lease deal includes installing a 7kw charger at home, work has 2 charging spaces that seem to be free every time I pass them, and I should be able to get a few free top ups when I going shopping. 

iwb100

The shorter the lease the higher the monthly payments. So it’s about balancing that with your own need or want for flexibility. You are stuck with the lease for the duration so if you are happy with shorter monthly payments then go for that.

With leasing id always do the shortest deal you can afford.

What I’d note is that there are sometimes excellent deals but they have fixed terms with them. It’s not worth missing the special offer in those cases assuming mileage works for you.

Also take note of how long they estimate the car will take then double or triple it. The wait times are huge, unless of course they have them in stock. 

Herzlos

Spoodzilla said:

I've never considered leasing or electric, but with the fuel price difference it seem to makes sense. Although watch me sign up to this and fuel prices hit record lows...

I've been driving for 20 years and I've seen the prices go up constantly and rarely come down by much; I wouldn't worry about it.

Electric cars will still be much cheaper to run.

Remember that once you've got it, you can qualify for cheaper home electricity via someone like Octopus.

Spoodzilla

iwb100 said:

The shorter the lease the higher the monthly payments. So it’s about balancing that with your own need or want for flexibility. You are stuck with the lease for the duration so if you are happy with shorter monthly payments then go for that.

With leasing id always do the shortest deal you can afford.

What I’d note is that there are sometimes excellent deals but they have fixed terms with them. It’s not worth missing the special offer in those cases assuming mileage works for you.

Also take note of how long they estimate the car will take then double or triple it. The wait times are huge, unless of course they have them in stock. 

Its for a car that is supposedly in stock  - I've seen the wait times on factory order, I'd probably put in an order for my next car now and it should be ready in 4 years? 

Re shortest lease you can afford, is that just for flexibility? 

iwb100

Spoodzilla said:

iwb100 said:

The shorter the lease the higher the monthly payments. So it’s about balancing that with your own need or want for flexibility. You are stuck with the lease for the duration so if you are happy with shorter monthly payments then go for that.

With leasing id always do the shortest deal you can afford.

What I’d note is that there are sometimes excellent deals but they have fixed terms with them. It’s not worth missing the special offer in those cases assuming mileage works for you.

Also take note of how long they estimate the car will take then double or triple it. The wait times are huge, unless of course they have them in stock. 

Its for a car that is supposedly in stock  - I've seen the wait times on factory order, I'd probably put in an order for my next car now and it should be ready in 4 years? 

Re shortest lease you can afford, is that just for flexibility? 

Yep the benefit of leasing is a cheaper car usually than buying. But if you tie yourself in for a longer term you lose some of that benefit. Potentially. 

So I’d try the shorter term if you can. But it’s up to your situation and the relative costs involved, 

Jenni_D

This might be of interest. (Comparison of HP [i.e. loan to buy a car] vs PCP vs Lease)

https://www.youtube.com/watch?v=m3n-W6x96J4

Benny2020

If you are spending £240 a month on diesel then you are maybe doing 20k a year? 
Leases get expensive when doing high mileage.

DrEskimo

Spoodzilla said:

I've never leased before. I can get a 2 - 5 year option on this vehicle. I wouldn't consider buying/ PCP, happy to hand it back as I'm sure the battery would be starting to degrade by then. The car has a 7 year warranty so I'm not going to be liable for any repairs. 

I don't understand, why are you not considering buying if you are happy with leasing for 5-yrs? As you say, the battery and even the car will be under full warranty. Remember you never get 'stuck' with a car you buy outright. You. always have the option to trade it in whenever you like, so it just becomes a question of cost. Is the anticipated cost to buy and trade in higher or lower than the cost of the lease. Not to mention the cost of being tied in a lease contract vs no contractual obligations at all.

Spoodzilla said:

I'm not worried about having the same car for 5 years, it would be a novelty to have one that actually lasts that long! I suppose its about doing the sums to work out the cost of ownership for 5 years vs buying a used diesel/ petrol and paying for MOT/ servicing/ repairs/ fuel. 

Why not the sums of buying a used EV relative to new lease relative to a used petrol/diesel?

I did those sums and hands down the used EV was MUCH cheaper than new lease or used petrol/diesel. Over the last 3.5yrs my used EV has depreciated just £1,500 relative to a new lease of the same model being around £5-7k. When 3-yrs came I was also free to do what I want. Given the crazy used market and shortage of new cars 6-months ago, I am glad I was able to just keep the car and do nothing!

Used petrols\diesels have seen similar levels of depreciation, but of course I have benefitted from massively reduced fuel bills. Petrol alone would have set me back around £2k, whereas electricity has cost me around £200. Then there is savings in VED.

Petriix

I'd strongly recommend buying new/nearly new at this point; if you can get hold of one, and if you can finance it in a sensible way.

Until the market went nuts, leasing was frequently the cheapest method of 'ownership'. This was often the case because large numbers of surplus stock vehicles would be disposed of via lease at well below market rates.

Essentially the lease brokers sell a finance product that happens to be linked to the cost to acquire the new vehicle vs the residual value at the end of the contract.

Currently residual values are ridiculously high and still escalating. Anyone who bought outright a couple of years ago is laughing. Unfortunately new prices have also spiralled up, and supply of new cars is struggling to meet demand. Most new EVs have waiting times of over a year.

My guess is that demand for second hand EVs is going to be really high for the foreseeable future, at least until (if?) prices come back down or some more affordable, long-range EVs hit the market.

A word of warning: no EV has a particular number of miles of range. The 250 miles you refer to is likely the WLTP range achieved in the standardised test. Actual range varies massively depending on numerous factors. Expect as little as 160 miles at 70mph in cold weather and bad conditions (wet/windy) and potentially 300 miles when driven slowly in the warm.