Electric Car Leasing vs Subscription: Which is Better?

If you don’t want to buy an electric car (EV) outright, you have two other options: electric car leasing or a subscription service. But how do these two options differ and what are the pros and cons of choosing an electric car lease?

 

This article will focus on electric car leasing. If you’re looking for the advantages and disadvantages of an electric car subscription service, check out this article: What Are the Benefits of an Electric Car Subscription Service? (Is It Worth It?)

 

What is Electric Car Leasing?

Electric car leasing can be more affordable and hassle-free than buying an EV and is the same as leasing a petrol or diesel car. You pay an upfront deposit and then make monthly repayments over 2-3 years to drive the car.

 

Once the contract ends, you return the car. When you lease a car, you are only ever renting it, so you don’t own it after you make the final lease payment.

 

As you never own the car, you also have to take the following into account when considering an electric car lease:

 

• Mileage Limits. You can usually adjust these based on your needs. However, the more miles you need, the more expensive your repayments are likely to be. You will also be charged extra if you exceed the mileage limit. While this may only be a few pence per mile, this can quickly add up.

• Condition Upon Return. You’re expected to return the car in a respectable condition at the end of the lease. If the leasing company deems that you haven’t taken proper care of the car, you may be subject to an extra bill. This is to cover the cost of repairs.

• Unless your contract gives you the option of adding a maintenance plan, you must sort out servicing for your car during the contract. Given that you need to return the car in good condition, you should stick to a regular service schedule.

• Running Costs. A lease contract doesn’t include insurance, charging costs or other day-to-day expenses.

 

How Does an Electric Car Lease Differ From a Subscription?

This table shows what's included in an electric car lease contract vs an electric car subscription.

 

While your monthly repayments are often lower in a lease contract vs a monthly subscription payment, the total cost is roughly the same once you factor in the other costs. This makes the total cost comparable. 

 

Electric Car Leasing

Brand-New Cars = Yes

Mileage Limits = Yes

Servicing = Optional Extra (varies by provider)

Road Tax* = Yes

Recharging = No

Insurance = Optional Extra (only available with a stipulated package)

Breakdown Cover = Optional Extra (only with a maintenance package)

Initial Deposit = Yes

End of Contract Charges = Yes (exceeding mileage, poor condition)

Long-Term Commitment = Yes

Ability to Switch Car = No

Ability to Cancel Contract = Yes

Eligibility Requirements = Yes (good to excellent credit score, a full, valid UK driving licence, at least 18 years old)

 

Electric Car Subscription

Brand-New Cars = Yes

Mileage Limits = Yes

Servicing = Yes

Road Tax* = Yes

Recharging = Optional Extra (varies by provider)

Insurance = Optional Extra (varies by provider)

Breakdown Cover = Yes

Initial Deposit = Yes**

End of Contract Charges = No***

Long-Term Commitment = No

Ability to Switch Car = Yes (varies by provider)

Ability to Cancel Contract = Yes***

Eligibility Requirements = Yes (varies by provider)

 

*Although electric cars are exempt from road tax, you still need to register it with the DVLA. Both electric car leasing and an electric car subscription service take care of this for you.

 

**Varies by provider. Some require a small initial deposit while others require no upfront fee. Either way, this is significantly less than a lease deposit.

 

***Some providers may charge if you cancel or look to end the contract early.

 

What are the Advantages of Electric Car Leasing vs a Subscription Service?

 

More Choices

Most electric car subscription providers are still in their infancy, so there aren't that many options. Car leasing has been around for years, and many providers are expanding their services to electric cars.

 

This means you have plenty of choices and don't feel restricted while looking for a new vehicle.

 

Hassle-Free Long-Term Solution

While one of the main advantages of an electric car subscription service is the flexibility it offers, you may not feel in a position to take advantage of this.

 

If you need a parking permit or aren't fussed about driving a range of cars, an electric car lease might be better for you. It's an effective long-term solution that gives you stable EV ownership for a few years.

 

More Established & Trusted

If you're wary of trying something new, diving headfirst into an electric car subscription service may not be right for you. An electric car lease is more familiar, which might help make the switch to an EV less stressful if you haven't owned an electric car before.

 

What are the Disadvantages of an Electric Car Lease vs a Subscription Service?

 

Running Costs Are Not Included

With a basic electric car lease, you must sort out servicing, insurance, and other running costs yourself. This means dealing with several companies throughout the year. A standard electric car subscription service includes servicing and breakdown cover as standard.

 

Many providers also offer insurance and free public charging in their contracts. As this is all done by one provider, it makes your life a lot easier. 

 

Long Term Commitment

If you only need a car for a short period of time, an electric car lease is not a good option. While you can cancel the contract early if you decide you no longer need the car, you're unable to restart it if you change your mind. If you keep the contract running but don't use the car, you still have to make the monthly repayments.

 

If you need an effective short-term way to drive an EV, you need a subscription service. You can subscribe to a car for just one month in some cases, and many providers offer you the chance to "Pause and Restart" your contract.

 

Initial Deposit

Some EV subscription providers ask for no deposit, while those that do only ask for a minimal contribution. An electric car lease involves paying at least 3 months lease upfront.

 

This is a much higher entry barrier as you need to have more money available when you sign the contract.

 

Final Thoughts

As always, you should consider all your options before making a decision. We also recommend taking your personal circumstances and driving habits into account because an electric car lease or subscription service may not work for you. For example, if you're likely to need flexibility with short term contracts then a subscription is probably your best option.

 

We strongly recommend completing thorough research, understanding your budget, and ensuring an electric car is right for you before deciding whether electric car leasing or a subscription provider is your best option.

 

Read More

Is an Electric Car Right For Me?

Deciding whether you should drive an electric car depends on your driving habits and personal circumstances. Before you commit to either an electric car lease or subscription service, read this article to determine whether an electric car is a good fit for you in 2024.

 

How Much Does an Electric Car Cost?

If you’re still considering how to finance your electric car, read this article to learn how much an EV costs on average in the UK as well as the price of every EV currently available in 2024.

 

How Much Does It Cost to Run an Electric Car? (Vs an ICE)

Before you decide whether an EV lease or subscription service is better for you, read this article to learn about the average running costs of an electric car. We aim to help you decide whether including these costs in a single monthly payment is more worthwhile than sorting them separately. 

 

What is an Electric Car Subscription?

Read this article to learn more about what an electric car subscription service is and how it offers you a new and affordable way to EV ownership.