Leasing Electric Vehicles: The Affordable Alternative to Ownership

As the cost of purchasing new cars continues to rise, driven by high interest rates and cooling demand for electric vehicles, leasing has emerged as a more accessible option for consumers interested in transitioning to battery-powered transportation. With a range of incentives and discounts available, leasing an EV can provide a cost-effective way to experience the benefits of electric driving without the long-term commitment of ownership.

Unlocking the Savings Potential of EV Leasing

The Affordability Factor

The average price of a new car in the United States has reached a staggering $48,401, according to data from Kelly Blue Book. For electric vehicles, the average sales price in July 2022 was even higher, at $56,520. These figures highlight the financial burden that can come with outright ownership, especially for those interested in making the switch to battery-powered transportation.However, the landscape is shifting, and leasing has become a more attractive option for consumers. "There are some absurdly cheap deals on EV leases right now," says Ivan Drury, director of insights at Edmunds, a leading car shopping resource. "Leasing is not just the preferred method because it lets you test the waters with a vehicle type you've never had before, but it's also so affordable. It's almost a no-brainer you see consumers go this route."According to Drury, the average lease payment for an electric vehicle is around $578 per month. However, some manufacturers are offering even more compelling deals, such as the 2024 Kia EV6, which can be leased for as low as $319 per month as of August 2022.

Leveraging Federal Tax Credits

Another key advantage of leasing an electric vehicle is the way the federal government's $7,500 tax credit for clean vehicles is applied. When purchasing an EV, the vehicle must be manufactured in the United States to qualify for the credit. However, this requirement does not apply to leases."None of the restrictions apply if you are leasing," explains Sean Tucker, lead editor for auto resource Kelley Blue Book. "So there are a lot of attractive EVs you can get discounts on by leasing, but not purchasing." This means that consumers can take advantage of the tax credit even on vehicles manufactured outside the U.S., such as the Hyundai Ioniq 5, which is made in South Korea.

The Trifecta of Savings

The combination of vehicles sitting on dealer lots for longer than usual, the federal tax credit, and dealer price cuts are creating a "trifecta" of savings for consumers interested in leasing an electric vehicle, according to Drury."Consumers are getting the trifecta, and it's not going to last forever," he warns. "Look into it, because you really could score a smoking deal on a vehicle that won't require a lot of maintenance."

Exploring the EV Leasing Landscape

For those who have never driven an electric vehicle before, leasing can provide an opportunity to "test the waters" before committing to a long-term ownership arrangement. Drury suggests that consumers interested in owning an EV should seriously consider the leasing offers available in the coming months, and even consider renting an EV for a week or two to get a feel for the driving experience.As the automotive industry continues to evolve, the rise of electric vehicles and the increasing affordability of leasing options are creating a unique opportunity for consumers to embrace the benefits of battery-powered transportation without the financial burden of outright ownership. By taking advantage of the current market conditions and the various incentives and discounts available, savvy shoppers can secure a "smoking deal" on an EV lease and enjoy the convenience and environmental benefits of electric driving.