Electric car leasing, purchasing, rental, or subscription: Which is best for you?
What a phenomenal time to be in the market for a new electric car! With so many new models and new ownership options, there have never been as many ways to get an electric vehicle. But with all this choice, it can be confusing to work out which route is the best for your particular situation.
How will you get your next electric car?
Perhaps you are more drawn to outright ownership. Or maybe you’re after a more flexible solution like electric car leasing, rental or subscription. Either way, we’ve created this guide to the different ways of getting an electric car just for you.
Covering both the traditional and the more innovative ways to get an electric car in 2023, we’ll take you through the essential information you need to make the right decision.
Purchasing an electric car outright
If you’re the type of driver who likes to own your vehicle outright, you’ll probably be considering buying your electric car via the traditional route and going through a dealer.
At the dealer, you’ll be able to see the cars you’re considering in person and take them out for test drives. This will give you a real feel for how each car might work for you.
Drivers can often feel pressured by dealership sales-people looking to earn their commissions, but it’s very important that you take the time to shop around to find the best offer to suit your needs. There are some great electric car deals out there, if you look in the right places.
Why do drivers buy electric cars outright?
Electric cars are almost always more expensive to buy outright than petrol cars, so why would anyone want to buy outright? Well, for many people, changing cars is a rare event, so they’re looking for a long-term partner.
If you’re the type of driver who’s looking to own the same car for the next 10 years, then purchasing outright is most likely to be the most cost-effective option for you.
The downsides to purchasing your car outright
Having a car that’s fully yours means that you’re also taking full ownership of all the additional costs associated with using a car over time. This is the main reason why drivers will look for alternatives to purchasing a car outright, such as leasing or a subscription.
Taking outright ownership means that you’re also taking on the responsibility for the inevitable depreciation in value, insurance, maintenance, repairs, charging, and every other cost that might arise.
For many drivers, the single biggest deterrent to purchasing a car is the fact that they have to deal with selling it themselves when they want to move to the next model. This can be a stressful, time-consuming experience.
Leasing an electric car
The traditional alternative to outright ownership is an electric car lease. These are effectively long-term finance agreements that are typically between 24 and 48 months and offered through car dealerships and lease brokers.
When you lease a car, you will pay an initial non-refundable deposit, then a subsequent monthly fee based on:
- The make and model of electric vehicle
- The agreed duration of your lease (usually two to five years)
- Your estimated monthly mileage
There are two main ways that you can lease a car depending on what you’d like to happen at the end of the lease term.
Personal contract hire: What is it?
If you’re not interested in purchasing the car at the end of your lease, because you know you’ll want a newer model, for example, you’ll likely finance the lease through an option called personal contract hire (PCH).
You’ll be subject to a compulsory credit check and will generally need to pay several thousand pounds as a non-refundable deposit at the outset.
Personal contract purchase: What is it?
For some drivers, it might make sense to have the option of owning the car at the end of an electric car lease. If this sounds like a good option for you, take a look at financing through personal contract purchase (PCP).
The most important point about PCP is that it costs more than a lease hire agreement due to the additional option to own a car.
With a PCP agreement, you will need to pass a credit check and put down a deposit of several thousands of pounds, then make monthly lease payments for the duration of your term based on the car’s guaranteed minimum future value (GMFV).
The GMFV is an estimate of how much your car will be worth at the end of your lease term - your monthly payments are made toward this amount.
When the lease ends, you have the following options to:
- Return the car to the dealer and make no future payments.
- Pay off your GMFV with a final ‘balloon’ payment and take full ownership of the car. Be aware though that balloon payments are normally significant sums, so can be tens of thousands and likely to be much more than the initial deposit.
However you choose to lease your car, it’s worth noting that when comparing with alternatives to leasing, you need to add the cost of your deposit, insurance, servicing and maintenance, to the advertised monthly payment amount.
Is leasing a good way to own an electric vehicle (EV)?
Leasing is the most well-known alternative to outright ownership. For some people, a 24-month or longer commitment to one car is what they are looking for.
However, with more convenient ownership models like car subscriptions becoming popular, many people are discovering they prefer only a 30-day commitment to one vehicle and a simple all-inclusive service managed through their smartphone.
An electric car subscription is also a great option for drivers who are looking for electric car leases with no deposit required.
Electric car rental
Hiring an electric car is all about convenience for drivers who need a car, quickly and hassle-free, for a very short period of time, such as a holiday abroad.
You turn up at the airport, pick up your keys and drive away for a few days or weeks. The rental company will take care of insurance and most other associated costs of running the vehicle during the term of your rental.
For those looking to have a car available at all times, car hire isn’t an option as there will be a maximum hire duration, generally a couple of weeks to 28 days. Also, this short-term option is typically quite expensive when compared with leasing and subscriptions.
Often described as the future of car ownership, an Onto electric car subscription offers drivers access to a wide range of EV makes and models on a flexible, all-inclusive 30-day contract.
It’s truly a new way to think about your relationship with your mode of transportation. Want a different car? Swap for another model and we'll deliver it to your door.
Imagine driving a chic Fiat 500 Icon convertible for the summer, then as the weather changes, you swap to a more solid Audi e-Tron for the winter months.
Maybe you’re worried about the electric car you commit to becoming obsolete before the end of a multi-year lease agreement. Well, then Onto is the perfect solution for you. If an exciting new EV model becomes available, all it takes is a few steps online for it to be heading to your driveway. A subscription with Onto unlocks a whole new world of flexibility to suit your lifestyle – you’re no longer tied to a single car, but can switch between cars as your requirements evolve.
What’s included with a car subscription?
When you choose an electric car subscription with Onto, we include all of the following:
- Fully comprehensive insurance
- Free public charging at over 14,000 UK chargers
- Service and maintenance
- Breakdown cover
- A 750-mile monthly allowance
There’s no paperwork, no deposit, and no hidden fees - we make it easy to enjoy your electric car.
Overview of your ownership options
- Purchasing an electric car gives you full ownership of both the car and all the costs associated with it.
- Long-term leasing can be a good option for driving a new electric vehicle with less hassle than buying outright. However, you are tied into one car for a multi-year contract, large deposits and the responsibility for insuring and servicing the car involves additional time and money plus charging costs.
- Rentals are a super convenient but expensive short-term option for driving an electric car.
An electric car subscription with Onto offers all the benefits of a lease with the flexibility to decide month-by-month whether you want to continue, stop or swap, plus a lot more! Register today and discover the future of car ownership.
- What is a car subscription?: Electric car subscriptions are a relatively new topic. Our guide below should help to answer some of the questions you have.
- Swapping your car: Swapping your car for something new is one of the most exciting parts of our subscription service.
- How mileage works with Onto: Our packages can give you 250, 500, 750 or 1000 extra miles to the 750 miles you already have included in your monthly subscription.
This is the future of driving
Find out more about electric car leasing vs. car subscription in our comprehensive comparison guide.
For an all-in monthly fee, enjoy all the benefits of car ownership, but none of the hassle.