Owning an electric car comes with a wealth of benefits: whether it’s contributing to a cleaner, greener environment, or ending each month with more money in your pocket, thanks to an EV’s significantly lower running costs.
But while buying an electric car outright makes great sense for some, there are a lot of unknowns to consider for those drivers who may be cautious about making the leap. It could be the practicalities of range and charging. Or it might be balancing the long-term savings of EV driving over the higher initial purchase price of an electric car – which can carry a list price double that of a petrol or diesel equivalent.
If only there was a way to make the switch easy, and to let you experience the joys of all-electric driving… without having to make that kind of long-term financial and lifestyle commitment. That’s where electric car leasing comes in.
We’ll break down the reasons why leasing is different, why it’s potentially a better solution to conventional ownership and with that, Vanarama and OVO’s commitment to easier, more flexible and cost-effective electric motoring, with perks such as free home charging units and even free insurance*.
What is leasing, and why is it different?
According to the Finance and Leasing Association, around 90% of new cars are bought on long-term finance deals, rather than being purchased outright – whether it’s a Personal Contract Purchase (PCP) or Hire Purchase (HP) agreement, each of which lets you pay fixed monthly payments over an extended period, before giving you the option to buy the car for a larger ‘balloon’ payment at the contract’s end.
Leasing, on the other hand, is more like renting a car, rather than owning it – giving you much greater flexibility. This is particularly beneficial if you’re a cautious EV intender who wants to try owning an electric car, without the big initial financial commitments. Equally, it’s a flexible solution that lets you potentially try out more of the latest models more often, or gives you the option to swap back to a plug-in hybrid or petrol car more quickly than with a longer-term PCP or HP contract, if needed.
Leasing a car is also incredibly easy. With OVO Energy’s award-winning leasing partner Vanarama, for example, all it takes is four easy steps to get you moving. Simply decide on your budget, your leasing period, your expected annual mileage and select a personal or business contract. That’s it.
As with PCP or HP, you still get to pick from the latest crop of models and run an individually specced, brand-new car on easily manageable fixed monthly payments. But, leasing also offers you greater control of your costs and a lot less hassle when it comes to running your car.
So, to sum up, leasing provides greater payment flexibility, a bespoke, easy-to-setup contract to suit your individual needs and all of the electric car options you would expect when purchasing outright. Let’s break down the further benefits.
How leasing helps you control your costs
Let’s start with the initial outlay. With PCP or HP contracts, you’ll be required to pay a minimum deposit, which can typically be around 10% of the car’s overall price.
In the case of a leasing contract from Vanarama, you can choose how much you would like to pay upfront – from the equivalent of one month’s rental, all the way up to the equivalent of 12 months. Paying more deposit upfront, for example, can significantly lower your monthly payments, giving you the flexibility to balance your budget for both the short-term and the long-term.
You can also control – or even cut – your costs by more accurately anticipating your annual mileage. Many PCP and HP prices are initially based around an estimated 10,000 miles per year, but the average UK driver actually only drives around 7,800 miles per year. By factoring in your personal driving needs and mileage, you can potentially save money, although you need to be aware of any end-of-contract mileage penalties for exceeding your mileage over the term of your leasing deal.
Finally, if you’re a business user, Vanarama can offer you the choice of a personal or business plan. Leasing on a business contract is usually cheaper per month than a personal contract, as you can claim 50% of VAT back on your monthly payments. You will however need to be a VAT registered company to enjoy this benefit.
The result: while you won’t have the option to own the car by the end of the contract with a leasing contract – as you would with PCP or HP – you could end up spending less per month to drive the car of your dreams.
How leasing gives you more flexibility
The next benefit of leasing is greater flexibility. Leasing agreements typically offer shorter contract periods compared to PCP or HP. In the case of OVO Energy’s leasing partner Vanarama, that can be as short as two years, making it much easier to change models at the end of your contract. That’s particularly useful for making the EV switch.
While most drivers who go electric never go back – according to What Car? research, over 90% of buyers who make the electric switch never return to a petrol or diesel car – the electric switch isn’t always the right choice for everyone. A change in your family circumstances, new work commitments, or moving house to a location where you don’t have home charging can all impact your requirements. Whatever your specific case may be, leasing provides the peace of mind you need to move forward, unhindered.
While leasing agreements typically don’t let you swap cars mid-contract, if you really want to change what you’re driving, you can opt to pay an early settlement fee to end your contract early. Alternatively, with leasing contracts as short as 24 months with Vanarama, you’ll have more flexibility to upgrade to the latest model once your contract ends.
How leasing takes the hassle out of ownership
Depreciation is often a big concern with car buyers, and it’s a big unknown for potential electric car converts. Unlike PCP and HP, where you’re effectively working to pay off the car over a period of time, leasing gives you the chance to enjoy a brand-new car while it’s still brand-new – out of reach of depreciation and obsolescence.
As electric cars have fewer moving parts than a conventionally powered car and fewer pieces to replace, there’s a lot less to go wrong, and little to no maintenance. That means that servicing costs – which are usually included in your monthly leasing payment – will be substantially lower.
Leasing companies also include many of the additional running costs that come with car ownership in your monthly rental fee, saving you hassle. With Vanarama, for example, your monthly payment includes your road tax and MOT costs, as well as a year’s roadside assistance and nothing to pay in processing fees. Select ‘Hot Offer Cars’* will even come with a year’s free insurance.
A home charger for good measure
When it comes to going electric, Vanarama offers another benefit that makes a leasing contract with them particularly appealing: a free home charging unit.
With the average UK car spending 96% of its time parked up and more than 80% of electric car charging done at home, it makes more sense than ever to consider your home charging options. The issue is, home charger purchase and installation is an additional upfront cost.
That’s why Vanarama includes a free home charging unit (where off-street parking is available) with every new contract. The Smart+ Home EV Charger is supplied and fitted by the UK's leading independent EV charge point provider, ChargedEV and features an ultra-reliable 7kW output, a fully-programmable charging schedule and compact dimensions for an easy install.
However you choose to move, OVO Energy and its leasing partner Vanarama can provide you with all of the information you need to find the perfect car for your purposes and will even help you find the best deals on the latest models.