Let’s cut to the chase: on average, electric vehicles cost more than gas-powered vehicles. We’re advocates for electric vehicles, but we understand that many people can’t afford a higher car payment (it’s why we designed a program to help electric vehicle owners pay down their loans faster).
As advancements are made, and the auto industry as a whole shifts to an electric model, we will likely see prices begin to come down. But there are inherent benefits of purchasing an electric vehicle instead of leasing one, particularly if you want to become a rideshare driver. Let’s consider three of those reasons together:
The Tax Incentives
When considering buying an electric vehicle, the tax incentives and other deductions available are often one of the primary selling points. The tax credit afforded to EV owners, otherwise known as the Qualified Plug-In Electric Drive Motor Vehicle Credit, is substantial enough that it offsets the sticker shock of purchasing an electric car. While the specifics vary by manufacturer, you can expect up to $7500 in federal income tax credit when you buy a new electric vehicle (including taking out a loan for one) and $4000 if you purchase a used one. Other tax benefits apply at the state and local levels.
Unfortunately, those savings are not as cut and dry if you choose to lease an EV. The federal tax credit does not apply to EV leases directly, though some manufacturers do pass the credit they receive on to the customer.
The Overall Cost
In addition to the savings earned through the tax credit program, your electric vehicle will ultimately cost less if you purchase it rather than lease it. Let’s consider the financial breakdown of a Tesla as an example:
Tesla leases the Model 3 for $389 per month (with $4500 down) and the Model Y Long Range for $569 per month (also with $4500 down). In comparison, using Tesla’s financing plan, purchasing the Model 3 or Model Y Long Range will run you $549 or $749 per month, respectively (again, with $4500 down). Though you’ll save around $180 per month by leasing the car, you don’t own anything at the end of the lease term despite paying nearly half the value of the car. Because Teslas hold their value for so long, one expert argues that you could end up paying around $17,000 more when you lease a Tesla rather than buying one.
Fewer Concerns about Mileage
As with a gas-powered vehicle, mileage restrictions apply to electric vehicle leases, too. If you want to pay for your electric vehicle by picking up extra work as a rideshare driver, you don’t want to rack up charges at the other end by going over your annual mileage limits. Buying an EV instead of leasing an EV is the obvious choice in that case.
Beyond that, mileage doesn’t matter quite as much with an electric vehicle as it does with a gas vehicle, though it’s still a relevant metric. EVs require less maintenance overall, and their batteries usually have a warranty of up to 100,000 miles or more. Tesla asserts that battery capacity remains at 90% beyond the 200,000-mile mark, and data backs up that claim.
The Bottom Line
With cost in mind, we have to mention the payment assistance offered by You.Car. If a lower monthly payment is the deciding factor between leasing or purchasing an electric vehicle, remember that you can substantially reduce your car payment every month by having a portion of your You.Car wages automatically transferred to your loan provider. The result? Reduced interest charges because you’re making micropayments and a lower amount due at the end of the month. You can take advantage of this payment program regardless of whether you lease or buy an electric vehicle, but many drivers use this option to help offset the higher monthly costs of purchasing an EV. After just a few years of driving with You.Car, they have an electric vehicle to call their own.
Ready to make the switch to an electric vehicle? Sign up to be a driver with You.Car.