Should you buy or lease? A lot of factors go into deciding whether to buy or lease your EV, and it can be overwhelming.
If you are considering transitioning to an electric vehicle, you may be asking yourself a very important question: Should I buy or lease?
This is a consideration that comes up with any car, and it may be especially relevant for drivers facing the higher price tag of an EV.
The average cost of purchasing an EV in 2019 was $55,600. That price might seem a little steep, but keep in mind that the number is the average. The cheapest EV on the market today is the 2020 Mini Cooper SE, coming in at $30,750, whereas the most expensive EV is the Aspark Owl with a shocking price tag of $3.2 million.
Obviously, these two vehicles target very different types of consumers, but the stark difference demonstrates the wide range of EV prices.
Regardless of which model you want to drive, you will need to decide whether to buy or lease, and you should make sure you have all of the information you need before you start weighing your options.
The difference between buying and leasing
Deciding whether to buy or lease a car is similar to deciding whether to purchase or rent your home.
When you buy a home, you typically make a down payment up front, and then subsequent monthly mortgage payments until the home is paid off.
Renting is an alternative that allows you to avoid the high cost of a down payment while keeping your monthly payments relatively low. However, the downside is that you will be paying rent forever if you never buy a home.
Now, shift this mindset toward the process of paying for a vehicle. If you buy an EV, ideally, you will eventually pay off the whole cost and you can keep the car forever. If you rent, however, you are only charged the amount that the car is expected to depreciate over the time that you have it, with the added cost of interest and other fees. However, if you need a car for your whole life, you will never escape monthly payments.
So what drives people to buy EVs, and why do others opt for a lease?
What to consider
You may know someone who leases their EV and raves about what a genius move that was, while another one of your friends may have bought theirs outright and contends it was the smartest financial decision they ever made.
The bottom line is they both could be right, and they each likely considered a variety of factors before making their decision. As should you.
The first thing that you should ask yourself is why you are buying a car.
If you’re buying a car for a short-term need, leasing could be the answer for you. Moving to a car-dependent neighborhood temporarily, starting a new job with a longer commute or making plans to do a lot of traveling in the coming years are all examples of potentially short-term car usage.
However, if you are starting a family or making a permanent move, you may know that you are going to need a car for decades if not the rest of your life. Buying an EV could be the right decision for you in this scenario because you can eventually pay it off.
Your financial situation
You should also assess your current financial situation to see what’s most reasonable. If you have enough savings to afford a relatively high down payment, you could save yourself from high monthly payments, and your future self will thank you for buying an EV.
However, if you have a long-term savings plan, but don’t want to pay a high upfront cost or expensive monthly payments, leasing could be the best option for you. You can maintain your current lifestyle and savings balance while still gaining access to a reliable car.
Innovation is constantly in motion. Vehicle manufacturers come up with new ideas every year. If you are the kind of person who loves new and exciting innovations, leasing an EV could be the perfect option for you. Every few years you’ll get a brand new car.
On the other hand, if you are the kind of person who names your car, whose fondest memories involve road trips and who avoids change when possible, you might be better off buying a car. Cars can be as sentimental as homes, and when you have a reliable car, you may not see a good reason to get a different one. If you buy your EV, it’s yours for as long as it lasts.
How to decide
A lot of factors go into deciding whether to buy or lease a car, and it can be overwhelming.
At Webasto, we keep up to date with EV market trends, and we can help you make the right decision.
Contact us today for more information.