FOR MOST AMERICAN car shoppers interested in a pure electric vehicle (EV), the technology
can present a host of unfamiliar considerations. For that reason, CR believes leasing,
rather than buying, makes the most sense. Here are a few reasons:
Leases have limited ownership periods, usually between two and four years, giving
shoppers access to the latest technology because they can turn in the EV at the end
of the lease for an upgrade. EV owners are more likely to be technology enthusiasts than
the typical new-car buyer is, says Ed Kim, vice president of industry analysis at automotive
consulting firm AutoPacific, so they’ll want the freshest tech. As with almost any lease, payments
are lower than a regular monthly payment for a vehicle purchase.
Another appeal is the availability of tax credits, whether federal or state. Still, shoppers who
choose to lease an EV need to pay particular attention to those because it’s the leasing company,
not the consumer, that’s entitled to the credit, says Mel Yu, a CR auto analyst.
“They often pass the credit on to the consumer, and that’s reflected in a reduced cost for the lease,”
he says. “But they aren’t required to do this, so shoppers should confirm before signing any
That’s the value a car loses over time. It’s a factor for any car buyer, but it hits EVs harder. Yu says
EVs depreciate faster than regular cars because tax credits effectively lower the original price of
the car, but leases typically factor that into the payment equation. “A vehicle usually loses around
50 percent of its value in three years,” says Yu. “Buyers can owe more on their loan than the vehicle
is worth.” As with any lease, there are restrictions, such as how many miles can be driven and how
much wear and tear can be inflicted.