Electric Car: To Buy or to Lease?
When it is time to get a new vehicle, we all face the same dilemma: buy or lease. The debate has been raging ever since Zollie Frank started the practice of long-term leasing way back in 1914.
However, if the next ride you are considering will be an electric vehicle (EV), your decision to buy or lease has just become much more complex. No longer is the discussion focused just on the typical talking points like depreciation, resale, and tax benefits.
Electric vehicles bring a whole host of new details to consider, long before that new car smell wears off. Here are a few pros and cons to think about when looking to go green with your new vehicle:
Own vs. Rent: One of the benefits of buying an electric car is that you’ll have full ownership of the vehicle. You can customize it however you like and there are no restrictions on how much you can drive it.
Today vs. Tomorrow: Today’s technology is fantastic. But just how much better will it be in the years to come? Unlike traditional vehicles, where tech advances slowly along with new model updates, EV technology is rapidly changing. Owning today’s model may feel very out of date in just a few short years.
Selling vs. Turn In: Exiting a lease before the contract term is completed can be very expensive and make some drivers feel trapped. However, though a purchased vehicle can be sold at any time, EVs present a unique challenge. Batteries and range become depleted over time. And with the future of EV technology unknown, the demand for used electric vehicles will likely vary widely for at least the next decade.
Tax Credits vs. Credit History: Depending on your credit, auto loans are traditionally easier to obtain than leases. Coupled with tax credits and incentives, the lifetime cost of ownership may be less when buying an EV versus leasing one. Carefully consider the long-term cost of owning an EV in relation to potential changes in technology.
Until the electric vehicle market fully matures, the decision to buy or lease an EV will remain a bit of a gamble. Take your time and consider your options before walking onto the dealership lot – and before that new car smell distorts your thinking!