Electric vehicles (EVs) are becoming increasingly popular as more models come to market and prices drop.
Still, with their increasing popularity, along come thearguments for leasing EVs.
Unfortunately, its not quite so simple.
Heres what to know about buying versus leasing an EV.
When you lease, you dont own the car.
There are restrictions to how long and how far you’re free to drive it.
Youll always have monthly costs and a lack of control over modifications to your ride.
Heres the catch: The promise of leasing is often misleading.
So, to be crystal clear: You should probably never lease a car.
That said, there are some unique reasons you might still consider leasing an EV.
EV technology is rapidly advancing, with each model year offering longer driving ranges and introducing new features.
(Kind of like getting a new iPhone after your two-year cell contract is up.)
Now, heres why leasing has become such a tempting offer these days: the so-called EV lease loophole.
Leased EVs are free from many of the strict eligibility requirements for receiving the $7,500 tax credit.
This means that leasing is a savvy way to see that credit on a wider selection of vehicles.
The catch: The tax credit belongs to the lessor, not to you.
Its dealers choiceliterallyand no doubt the most compelling argument for leasing over buying an EV.
With a 3-year lease, you wont have to worry about this major replacement cost down the road.
The leasing company will handle battery maintenance and replacement once you turn in the leased EV.
But the lower monthly payments will actuallyhit you harder over time.
Plus, EV insurance premiums are higher due to the vehicles high replacement costs.
All vehicle leases are limiting
Leasing contracts contain restrictive provisions.
There are often mileage limits, and going over can result in fees of 2030 cents per mile.
You may need to keep the car in pristine condition to avoid excess wear and tear fees.
Most leases prohibit modifying or customizing the car, too.
To maximize savings and take full advantage of EV ownership, you should purchase rather than lease your vehicle.
If thats untenable given your car-buying budget, consider a more affordable hybrid or conventional car.
Either way, avoid signing an EV lease you may later regret.
