Is it Better to Buy or Lease an Electric Car?

October 10th, 2022 by

Choosing whether to buy or lease an electric vehicle comes down to personal preference. If you want to own the car outright and get the full tax incentives, buying is the better option. If you prefer not to have a long-term commitment, you might consider leasing your EV.

As more and more consumers shift their focus to the growing electric vehicle marketplace, many questions come to the surface. Aside from all the questions about EV ownership, many first-time buyers have questions about electric vehicle financing. Many new car dealerships offer the option to either buy or lease new cars. This remains true for electric vehicles.

There is never a clear and simple answer to which option, buying or leasing, is better. But there are pros and cons to each that you should consider when looking at electric vehicles. 

A gray Mercedes-Benz EQS LEV

Buying vs. Leasing Electric Vehicles

Buying a car is usually a straightforward process. You pay an upfront cost and, in most cases, take out a car loan. You make monthly payments on the loan until it is paid off. In the end, you own the vehicle. You can do with it what you wish, and keep it as long as you like.

Leasing a vehicle is slightly different. When you lease a vehicle, your lease comes with a set term limit. You can drive the car for as long as the lease allows, making monthly payments again. You cannot make modifications to the car or exceed driving limits, and you must return the car to the dealer when the lease term ends.

Ray Catena Finance Center

Pros: Leasing an Electric Vehicle

Perhaps the biggest advantage you get when you lease an electric vehicle is that you do not risk being locked into outdated technology. 2022 model year electric vehicles are far more advanced than the EVs from 2018. How much more advancement will there be in 2026? There is no way of knowing just how much we can expect EVs to improve in the coming years. But the electric vehicle marketplace is one of the fastest-moving industries in the world today. 

When you lease an electric vehicle, you are making a short-term commitment. This means you are free to upgrade to a more cutting-edge vehicle (if available) sooner with no loss of value. You also don’t need to worry about your battery life and performance degrading over time with a short-term lease on an EV.

Leasing an electric vehicle also allows you to potentially get a great deal at the end of your lease. When you lease a vehicle, you are given a pre-set buyout value for the end of your lease term. This value is based on the expected depreciation of your vehicle over the lease term. If the actual value is greater than the buyout value, you can pay the buyout cost, and purchase your EV for less than it’s worth.

Pros: Buying an Electric VehicleAn overhead view of the new Mercedes-Benz EQS LEV

The most obvious benefit to buying an electric vehicle is that you own the car. You can drive it as much as you like, make modifications, and keep it for as long as you want. The car is your own, and you don’t need to worry about the day it returns to the dealership.

But buying an electric vehicle also comes with a unique bonus over other vehicle types. Both state and federal governments offer tax incentives for EV owners, which you can qualify for the instant you buy an electric vehicle. These incentives can be worth up to $10,000 on your next year’s taxes.

At Ray Catena, we offer the tri-state area the best buying and leasing experience for our great selection of luxury electric vehicles. Contact us today or see how our finance centers make it easy to get behind the wheel of a luxury electric car.

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