In this article, Graham Conway, managing director at Select Car Leasing in the UK, outlines why he believes that making the switch to an electric vehicle can benefit drivers financially in the long run.
Increasingly more drivers are opting to drive electric vehicles, and the Office for National Statistics predicts that over half of young drivers will have made the switch to electric vehicles by 2030.
The automotive industry is pushing to reduce the number of vehicles reliant on fossil fuels on our roads. Electric vehicles play a big part in making that possible.
However, a lot of drivers are being put off electric vehicles because they are unable to afford the initial costs of making the switch.
It is no secret that electric vehicles are more expensive than vehicles that use diesel or petrol when it comes to the initial purchase.
Leasing
One way to avoid these expenses is to lease your vehicle instead of buying it.
Leasing a vehicle is not too different from renting a house. You pay an ‘initial fee’ – which works to bring down the cost of your monthly payments.
Also, you set the length of your contract, which is typically two/four years, and you have an annual mileage stipulation.
And for the majority of people, leasing a vehicle is much more cost-effective than purchasing a vehicle outright.
Furthermore, you will not have any cash tied up in the car, meaning you can change the vehicle you are driving every few years.
This makes leasing a very attractive option if you are looking to make the switch to an electric vehicle.
Drivers, who do make the switch to an electric vehicle, will find that it comes with several significant financial benefits in the long run.
Some of the key savings that can be made include lower fuel costs, big reductions in running costs and tax incentives.
It is estimated that annual fuel costs for an electric vehicle are 58% less than the costs of refuelling a diesel or petrol-reliant vehicle.
Average drivers could expect to save anywhere between £500-£1,000/year in fuel costs by switching to an EV.
What is more, is that electric vehicles are almost certain to come with much lower maintenance costs.
One study suggests that maintenance costs for electric vehicles are, on average, 23% lower over three years or 60,000 miles compared to diesel or petrol-reliant vehicles.
Claim costs
Leasing an electric vehicle is also suitable for business owners who use company cars.
Since April 2020, businesses have been able to claim back 100% of an electric vehicle’s costs against the profits of the year of purchase.
BiK (Benefits in Kind) taxation between 2020 and 2023 is relatively low. This means that employees who drive an EV company car can take home more of their pay.
It is hard to argue against the long-term savings that an electric vehicle can bring. Couple that with the long-term environmental benefits of electric vehicles.
It can only be a good thing to see the number of vehicles on our road increase.
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