WHY LEASING IS BECOMING MORE POPULAR AMONG EV BUYERS
The electric vehicle (EV) market is continuing to get bigger and bigger, and more buyers are turning to leasing instead of purchasing. Leasing offers several financial and practical benefits, making it an attractive option for those hesitant to commit to long-term EV ownership. Lower monthly payments, tax incentives, and manufacturer-backed lease programs have contributed to this growing trend.
At the same time, concerns over depreciation, rapid EV technology improvements, and uncertain resale values have made some buyers cautious about purchasing an EV in the first place. Leasing provides a flexible alternative that allows drivers to experience an EV without the risks associated with full ownership. As leasing incentives grow and manufacturers push new deals, the trend is expected to continue within the EV market.
In order to give you the most up-to-date and accurate information possible, the data used to compile this article was sourced from various manufacturer websites and other authoritative sources, including Kelley Blue Book, U.S. News & World Report, Capital One, CBS, and the S&P Global.
How EV Lease Deals Are Changing Car Ownership Costs
Lease deals are giving more American drivers the opportunity to experience EV ownership
The Financial Advantages Of Leasing An EV
Lower Monthly Payments Compared To Buying
The cost of purchasing an EV can be a significant financial hurdle for many buyers. According to Capital One Auto Navigator, the average price of an EV is around $53,000, with a typical monthly payment of approximately $1,100 on a four-year loan. This high cost puts EV ownership out of reach for many consumers, especially when factoring in additional expenses such as insurance, charging equipment, and maintenance.
In contrast, leasing offers a more affordable alternative with significantly lower monthly payments. CBS News reports that the average monthly lease payment for an EV is just $578, nearly half the cost of financing a purchase. Leasing allows consumers to drive a brand-new EV without committing to the full purchase price or worrying about depreciation.
Federal Tax Credits And Incentives For Leases
The availability of federal tax credits has further contributed to the affordability of leasing an EV. Though current tax credits are in question with the new administration, most leased EVs qualify for the full $7,500 federal tax credit. This is because, in a lease agreement, the dealership or finance company retains ownership of the vehicle and applies for the tax credit as the legal owner. While they are not required to pass the savings on to the consumer, many lessors choose to do so to make their lease offers more competitive.
The impact of these incentives can clearly be seen in leasing trends. In March 2024, for example, lease agreements accounted for 34 percent of all EV transactions, a notable increase from 18 percent in the same month the previous year. As leasing continues to become a more popular option, the ability to benefit from federal incentives without meeting the strict purchase qualifications makes it even more appealing.
This Loophole Has Audi, BMW, And Mercedes Leasing WAY More EVs Than It Sells
During the first quarter of the year, roughly nine out of every ten EV sales from these luxury automakers were leases.
Avoiding Long-Term Risks And Depreciation Concerns
EV Technology Is Evolving Rapidly, Leaving Older Models Behind
One of the issues with buying a new EV is that technology is advancing at a rapid pace, making it difficult for older models to stay relevant. Automakers are constantly improving battery efficiency, range, and charging capabilities, with innovations like solid-state batteries promising a major leap forward. Samsung has already developed a 600-mile solid-state battery, and Toyota (along with other manufacturers) is working on similar technology that could dramatically increase range and reliability.
As these advancements move toward mass production, even today's high-tech today’s EVs could quickly become outdated, leaving owners stuck with vehicles that fall off a cliff in terms of value. For example, early-generation EVs with smaller battery packs and limited range have seen sharp drops in resale value. For example, used Nissan Leaf models from the early 2010s can be found for as little as $2,000 or less on Autotrader. This represents a depreciation of more than 90 percent compared to what they cost new, showing just how much obsolete tech can bring down the price of an EV.
Uncertain Resale Value And Market Fluctuations
As shown above, depreciation is one of the biggest concerns for EV owners, as resale values can fluctuate significantly due to changes in technology, battery life, and government incentives. According to market data, EVs tend to depreciate faster than traditional gas-powered cars. While some models retain value better than others, many lose a substantial percentage of their worth within just a few years.
For many buyers, the uncertainty of future resale value makes leasing a safer financial decision. With a lease, the depreciation risk is shouldered by the finance company or automaker rather than the individual driver. This eliminates concerns about how much the vehicle will be worth when it comes time to sell or trade it in.
If You Were Waiting To Buy Or Lease An EV, Now Is The Right Time
EVs are quickly becoming more and more affordable, and new and experienced drivers are looking to capitalize on this trend - and now you can, too.
More EV Lease Deals And Offers From Manufacturers
Automakers Pushing Leasing To Boost EV Adoption
As of early 2025, automakers are offering aggressive lease deals to attract more consumers to the EV market. Ford currently offers the Mustang Mach-E for $250 per month, making it one of the most affordable ways to get behind the wheel of something sporting the iconic Mustang badge. Honda’s new-for-2024 Prologue is available for $209 per month, providing a low-cost entry into the midsize electric SUV segment. Kia has also introduced extremely competitive pricing for leased EVs, with the EV6 Light Long Range available for just $179 per month.
Some of the most affordable EV lease deals right now include the Kia Niro EV Wind and the Volkswagen ID.4, both leasing for just $149 per month. These prices undercut many gas-powered models and just about anything else on the road, making the switch to an EV cheaper than ever. With these deals, automakers are encouraging EV adoption by significantly reducing the cost of dipping your toes into the market.
The Role Of Manufacturer's Own Leasing Programs
To really speed this process along, manufacturers are increasingly developing their own leasing programs rather than relying on finance companies. By offering in-house leasing options, manufacturers can provide tailored incentives and support to customers, making EVs more accessible than ever. These programs often include benefits such as lower monthly payments, maintenance packages, and flexible terms, all designed to attract potential EV buyers.
Leasing A Volkswagen ID.4 Is Super Affordable Right Now
Buyers can have an ID.4 for just $184 per month after factoring in the down payment.
Consumer Preferences And Market Trends
Shorter Commitment And Flexible Options
Many consumers prefer leasing an EV (or any vehicle for that matter) because it offers a shorter commitment compared to buying. Leasing provides a way to stay up to date with the latest advancements and technology without the hassle of reselling or trading in a depreciating vehicle. This flexibility makes EVs more appealing to consumers who are still uncertain about things like long-term battery performance and charging infrastructure.
Leasing Is Becoming More Popular Among First-Time EV Buyers
In the end, leasing provides an easier way to test an EV before committing to a full-on purchase. Some buyers remain skeptical about the practicality of EVs, particularly when it comes to charging availability and real-world range. Leasing allows them to experience daily EV use without the long-term financial risks of ownership. If the experience is positive, many lessees eventually transition into purchasing an EV or buying out the one they're leasing. If not, they can return the vehicle at the end of the lease and explore other options without taking a financial loss or being underwater on a car loan.
2025-02-06T07:12:25Z