Leasing an Electric Vehicles is getting cheaper as high interest rates make buying a car more expensive. Dealers are offering incentives to clear lots amid cooling interest in battery-powered cars.
Owning a car is expensive. According to Kelly BlueBook data, the median price of a new car in July was $48,401. EV buyers spent even more: The median sale price for electric vehicles in July was $56,520.
Electric cars are best as a second vehicle for short trips to local establishments or driving in rural areas. They are not suitable for long distances, nor are they good in cities due to the lack of fast chargers.
Today, car leasing experts recommend leasing an electric car rather than buying it so that the OEM and lender take on the risk of what could be an aging battery instead of you. However, by the end of the decade we should have much of this figured out, and buying an electric car should make a lot more sense then, if you buy a car at all.
Why Lease an Electric Vehicle?
Leasing an electric vehicle (EV) can be a good option because it has lower upfront costs, lower monthly payments, and flexibility to upgrade to newer models.
Lower Costs
Lower monthly payments – Leasing can save money compared to financing a loan.
Lower upfront costs – Leasing companies often only require a deposit, a fee or two, and the first month’s payment.
Flexibility
Upgrade to newer models – Leasing allows you to replace your EV every few years as technology advances.
Avoid outdated technology – You won’t be stuck with a car that has outdated battery technology or charging standards.
Tax Credits
Federal tax credit – Leased EVs may qualify for the $7,500 federal tax credit for clean vehicles.
Loyalty and conquest offers – Automakers offer loyalty discounts for staying with the brand or “conquest” offers to get you to switch from one brand to another.
Warranty Protection
Warranty Protection: Most new EV leases are two or three years long, providing long-lasting warranty protection.
End-of-Lease Options
Purchase the Vehicle: You can purchase the EV at the end of the lease instead of trading it in.
Read Also: Can You Lease an EV With Bad Credit?
Best Time to Lease an Electric Vehicle
The best time to lease an electric vehicle (EV) may be at the end of the year, when dealerships compete to meet their sales goals. This can lead to better deals and incentives.
End of Quarter
Dealers typically strive to meet sales targets at the end of each quarter (March, June, September, December). This can lead to better negotiating opportunities and special lease deals.
End of Year Deals
One of the best times to lease is at the end of the year (October through December). Dealers want to clear inventory before new models arrive, leading to manufacturer discounts and incentives.
Best Month to Lease an EV
Historically, December typically offers the best lease deals due to holiday promotions and end-of-year sales targets. However, some manufacturers also offer strong summer incentives.
New Model Launches
When a new model is announced, dealers may reduce lease prices on the outgoing model to make room for new inventory. This typically occurs in late summer or early fall.
Tax Incentives and Government Rebates
Electric vehicle lease deals improve when new tax credits or government incentives go into effect. Many electric vehicles qualify for federal or state tax credits, which can reduce leasing costs.
Interest Rates and Market Conditions
Leasing costs depend on interest rates (called the “money factor” in leasing). If interest rates are low, leasing deals become more attractive. Staying informed about market trends can help you choose the right time for your lease.
Special Lease Offers from Manufacturers and Dealers
Automakers and dealers frequently offer limited-time special leasing deals. Checking out promotions from brands like Tesla, Ford, and Hyundai can help you find a better deal.
EV Inventory and Demand Trends
Electric vehicle (EV) demand is growing, and supply and demand are becoming more balanced, which is good for the industry, notes zerosum.ai. This balance is leading to more efficient operations and better profitability.
Best Leasing Terms for an EV
The best leasing terms for an electric vehicle (EV) depend on your needs, but a 36-month lease is usually a good option. Shorter contracts may have lower monthly payments, but longer contracts may allow you to amortize the cost of the lease.
How to Negotiate a Better EV Lease
To negotiate a better EV lease, focus on understanding key factors like the “money factor,” residual value, and manufacturer incentives, then leverage these aspects to negotiate a lower capitalized cost, potentially resulting in a lower monthly payment—be sure to ask how the federal EV tax credit applies to the lease price and compare dealer offers to find the best deal.
Do your research and know the numbers:
Money Factor (MF): This is the interest rate applied to the lease, a key factor in determining your monthly payment.
Residual Value (RV): The projected value of the car at the end of the lease, which significantly impacts your monthly payment.
Manufacturer Incentives: Check for available federal and state EV tax credits, as well as any manufacturer-specific lease offers.
Negotiate Capitalized Cost:
Base Price Discount: Try to negotiate a discount off the vehicle’s manufacturer’s suggested retail price.
Cap cost reduction: Ask for a contribution from the dealer to reduce the capitalized cost, which directly affects your monthly payment.
Understand the tax credit application:
How it applies: Make sure the dealer clearly explains how the federal tax credit will be factored into your lease payment.
Avoid overpricing: Be wary of dealers who try to inflate the price of the vehicle to offset the tax credit.
Shop around: Contact multiple dealers to compare lease terms and find the best deal.
Get written quotes: Ask for detailed lease proposals that outline all costs and terms.
Negotiation strategies:
Focus on the monthly payment: Clearly state your desired monthly payment and work backwards to achieve it.
Highlight market conditions: If inventory is high, use that leverage to negotiate a better deal.
Be prepared to walk away: If you can’t reach an acceptable price, don’t be afraid to walk away and consider other options.
Leasing vs. Buying an Electric Car
| Factor | Leasing an EV | Buying an EV |
|---|---|---|
| Upfront Cost | Lower (usually requires a down payment and fees) | Higher (full purchase price or loan down payment) |
| Monthly Payments | Lower (covers depreciation, not full cost) | Higher (loan payments or full cash payment) |
| Ownership | No (return car at lease end) | Yes (you own the car outright) |
| Mileage Limits | Yes (typically 10,000–15,000 miles per year) | No limits (drive as much as you want) |
| Maintenance Costs | Lower (covered under warranty) | Higher (out of warranty, long-term costs) |
| Depreciation Risk | No risk (dealership takes the hit) | High (resale value depends on market) |
| Technology Upgrades | Easy (get a new EV every few years) | Harder (stuck with old tech unless you sell) |
| Tax Incentives | Sometimes (some leases pass on tax credits) | Yes (buyer gets full tax credit, if eligible) |
| Customization | Limited (modifications not allowed) | Unlimited (can modify as you wish) |
| End of Term Options | Return or buy the car | Keep, sell, or trade in |
Hidden Costs in an EV Lease
Hidden costs in leasing an electric vehicle (EV) can include insurance, charging equipment, and repair costs.
Insurance
- EV insurance is typically more expensive than gasoline vehicle insurance
- Some leases may limit repair shops
Charging equipment
- Home charging equipment is typically not included with the car
- Installing a home charger can cost between $500 and $2,000
Repair costs
- Repairing or replacing a battery pack can be very expensive
- There aren’t as many qualified technicians to repair EVs as there are for gasoline vehicles
Other costs
- Documentation fees
- Dealer fees
- Warranty for leased batteries
- Disposal costs
- EV-specific fees, which can range from $50 to $200 per year
- Add-ons like autonomous driving or acceleration boost, which can cost thousands of dollars
- While EVs have some hidden costs, they also offer many benefits, such as tax credits, rebates, and lower maintenance costs.
Top EV Models to Lease in 2025
Leasing an electric vehicle (EV) in the United States in 2025 offers access to the latest technology with flexible terms. Below is a table of the main EV models available for lease, highlighting their key specifications:
| Model | Body Type | Range (miles) | Battery Capacity (kWh) | Power (hp) | Monthly Lease Payment | Lease Term | Due at Signing |
|---|---|---|---|---|---|---|---|
| 2025 Nissan Leaf | Hatchback | 149–212 | 40–62 | 147–214 | $259 | 36 months | $2,279 |
| 2025 Kia Niro EV | Crossover | 253 | 64.8 | 201 | $149 | 24 months | $3,999 |
| 2025 Hyundai IONIQ 5 | Crossover | 303–318 | 77.4 | 225–320 | $189 | 24 months | $3,999 |
| 2025 Chevrolet Equinox EV | SUV | 300+ | 70+ | 290 | $239 | 24 months | $3,999 |
| 2025 Ford Mustang Mach-E | SUV | 270–305 | 70–91 | 266–480 | $274 | 36 months | $2,000 |
| 2025 Tesla Model 3 | Sedan | 272–358 | 60–82 | 283–450 | $399 | 36 months | $4,500 |
| 2025 Polestar 3 | SUV | 300 | 111 | 489–517 | $299 | 36 months | $3,999 |
| 2025 Cadillac Lyriq | SUV | 303–319 | 102 | 340–500 | $499 | 36 months | $5,000 |
| 2025 Volkswagen ID.4 | SUV | 275–295 | 82 | 201–295 | $39 | 36 months | $1,780 |
| 2025 Audi Q4 e-tron | SUV | 241–265 | 77 | 201–295 | $382 | 36 months | $2,000 |
Note: Lease offers are subject to change and may vary based on location, credit approval, and dealership promotions. It’s advisable to contact local dealerships for the most current deals.
Final Thoughts
There are many advantages to buying an electric vehicle, such as cutting-edge technology, no worries about certain maintenance issues, and numerous manufacturer incentives. To do this, you need to know the range, evaluate the size of the vehicle, test drive the electric vehicle, and negotiate the lease agreement.
It is important to consider your budget and needs before choosing an electric vehicle leasing or purchasing option.
