Electric Car: Should You Lease It Or Buy It

electric car

If you choose to lease an electric car, at least you would be keeping up on the latest technology. You also avoid in risks of owning what will, in turn, become an obsolete model. However, which is genuinely better, leasing the electric car of buying the car straight out.

What It Means To Lease a Car

Leasing is basically like renting a car for a period of time, typically two to three years. The amount you pay monthly depends on the negotiated transaction price for the car and how much it will be worth after the contract for the vehicle expires. When it comes to electric vehicles, leasing companies usually claim a $7,5000 federal tax credit. They then apply the credit to the transaction price as a means to reduce the lessee’s monthly payments.

Leasing An Electric Car

Lessee’s upfront costs tend to consist of the first month’s payment as well as the down payment. Both can quickly add up to several thousands of dollars. However, if one makes a higher down payment, there their monthly fees will be lower.

Whoever is leasing the car will have to pay sales tax, annual vehicle registration fees, and taxes, as well as maintenance and insurance.

After the lease is up, you have the option of returning the vehicle back to the dealer or purchasing the car.

However, leasing isn’t for any and everybody.

For example, those with excellent credit are offered the best lease deals. Creditworthiness from applicants is based on their FICO score. Those who have a score ranging between 700-850 will gain the most favorable lease. Those who fall under the 620 mark will have to pay higher interest rates.

Also, after returning the leased vehicle, they will require you to pay a few hundred dollars to cover the resale of the car. You will also have to pay for excessive wear and tear if the vehicle is not in excellent condition. That means that there should not have any dents, window cracks, and all accessories are in good condition.

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