Are Electric Cars Cheaper?

21st Jan 2021

Are Electric Cars Cheaper?

Electric cars were once synonymous with six-figure luxury brands such as Tesla. While models like these are developing all the time, even Elon Musk’s pioneering venture has come down in price, while many other global brands are following suit. So – are there electric cars available to the masses? And are they cheaper? Like most cost-related questions, it depends. The costs of an electric car depend on what you’re measuring – i.e. buying versus running costs – plus how long you plan to keep the vehicle for.

For example, electric cars are largely more expensive to buy outright than fossil fuel powered cars. However, they’re also very reliable and come with longer warranties. The biggest cost you’ll likely have with an electric car is replacing the battery, rather than common issues in petrol and diesel vehicles.

Why leasing is a better option

Many smaller electric models, such as the Renault Zoe or Nissan Leaf, take less of a toll on the wallet – with an RRP of around £27,000. But this is still far more than a similar sized petrol equivalent like the Focus, charged at £20,000 – which makes a huge difference when we consider depreciation.

What’s more, smaller models aren’t always practical. They may be cheap to run, but what about family cars, or luggage space?

Leasing an electric car provides a viable alternative. You only pay for the length of the leasing contract, rather than one large lump sum, or finance payments for a car which will ultimately depreciate. Just pay a deposit and agree to monthly payments. Once your contract is up, there’s nothing left to pay – and you can hand it right back.

Electric car running costs

If that wasn’t enough to convince you to lease, consider this. Leasing can cover many of the costs of buying a car, for example monthly payments and road tax (personal only). The only real costs with leasing are fuel and insurance, and if you negotiate, you can even add these into your contract.

Imagine paying no petrol or diesel money – all you need to worry about is monthly repayments. Added to this, electric cars also come with multiple tax saving benefits.

As above, there’s no road tax for electric cars. If you’re looking for a business lease, you’ll also benefit from a huge saving on Benefit in Kind tax – this is a tax on company incentives, payable by the driver.

You may also take priority in parking zones, or have free rein to enter low emission zones and congestion charge areas. Over the long term, this can all result in significant cost savings.

So, is it cheaper to have an electric car?

For all the environmental and tax saving benefits, it’s best to choose an electric vehicle. If you want to drive away a brand-new model without the astronomical upfront cost, you should consider a lease. Even a short-term lease could convince you to reap the benefits of quieter engines and priority parking.

The choice of electric cars is bigger than ever – hatchbacks and SUVS, and much more. Get in touch with the Car Lease Agent team to find the best electric car lease today.