Thanks to the current Administration in the White House, the rise of electric vehicles has grown exponentially. It is estimated that EVs and hybrids makeup 4.5 and 6.6 percent of new registrations from January through June of 2022. For the longest time, it has mostly been Tesla and Toyota expanding into electric vehicles, but other companies have begun expanding into the EV realm as well. However, these advanced vehicles can come with an extremely high price tag, with an average price of over $66,000, which makes the decision to purchase these vehicles difficult. It may be difficult for consumers to decide between purchasing and leasing electric vehicles, so this article will give some insight to decide between the two.
There are a number of reasons as to why a person would decide to lease an electric vehicle as opposed to buying it. One major reason is if you intend to switch up your vehicle every few years. Leases typically run for three to six years, after which people turn the car in for a new one. Furthermore, if you typically don’t travel a lot in a year, you won’t have to worry about the mile restrictions placed on leases. Other pros for leasing to consider would be the vehicle warranty, a lower monthly payment, and the newest technology features in the car.
The vehicle warranty will cover the typical issues cars face after 24 to 36 months. The most common issue electronic vehicles face is the need for a new battery, which could be costly. When leasing the customer doesn’t have to worry about replacing the battery as it is covered under warranty. When leasing, it is also very common for consumers to pay less money both upfront and monthly for a lease compared to buying it.
There are a few drawbacks to leasing an electric vehicle. The main issues are lease approval, the lease restrictions, and vehicle restrictions. For those with poor credit it can be much more difficult to gain approval of the lease application. Credit score will make an impact on the monthly price of a lease, the worse the credit score, the higher the monthly payment. Furthermore, it may be difficult to get out of a lease if you are not comfortable with the vehicle.
If you are opposed to leasing a vehicle, which many people are, the other option is to purchase the vehicle. This option offers many advantages and disadvantages. One advantage is the obvious, you have full ownership of the vehicle once you have paid off the loan. Furthermore, you won’t have to worry about mileage restrictions that are placed on a lease and any other charges that may come up at the end of the lease. In addition to not being restricted on the odometer, you also have the opportunity to add anything to your car that you want, like a new stereo for example. Purchasing the electric vehicle will also provide new tax incentives and tax credits thanks to the current administration. One of the new federal EV tax credits can be worth up to $7,50, and many states offer rebates to lower the cost to purchase the electric vehicles.
There are a few drawbacks to purchasing an electric vehicle as well. First of all, the upfront costs of purchasing an electric vehicle can be higher than a lease. This requires the person to purchase the vehicle to ensure they shop around their local dealerships, and not be afraid to walk away from a deal. Unlike leases, when purchasing a car you are fully responsible for any repair costs not covered by the warranty.
Whether you are planning to purchase or lease a new electric vehicle, it is important you do your research on what you need. You may approach obtaining an electric vehicle similar to how you would get a conventional car, it is entirely based on what you need in a car. Some people feel the benefits of leasing a car will outweigh the drawbacks, and vice versa for purchasing the electric vehicle. It is ultimately up to the individual consumer for what fits their needs in an electric vehicle.