Is car leasing right for you? The questions you need to ask

Summary

• Leasing allows drivers to have access to new cars without having to make a full purchase, but it still carries many of the hassles of car ownership.
• Most car leases require drivers to secure their own insurance, take care of maintenance, and stay within narrowly-prescribed mileage allowances.
• Leasing is sometimes considered less of a commitment than ownership, but most leases last around three to five years - often with penalties for ending early and no opportunity to switch to other vehicles.
• Electric car subscriptions with Onto are all-inclusive and offer drivers access to the latest electric cars - and the flexibility to switch to different models when you need to.

Should you buy or lease a car?

One of the first questions you might consider when you’re thinking about getting a new electric car is whether you should buy or lease. 

If your goal is to own a car, you’ll likely finance it through hire purchase or personal contract purchase. With hire purchase, you’ll pay a substantial initial deposit (usually around 10% or more of the car’s value), then make payments based on the balance for a set term. After the final payment, you’ll be the sole owner of your electric car.

If you finance your car through personal contract purchase, you’ll pay a similarly high initial deposit (also usually around 10% of the car’s value) and make monthly payments, but the agreement itself is really a long-term lease. You’ll only have the option of owning the electric car you’ve driven at the end of your lease term, and that’s after making a final ‘balloon payment’ - usually thousands of pounds.

If you’re not interested in ownership, you might consider leasing through personal contract hire. These agreements tend to begin with a deposit of around three to six months’ monthly payments, then monthly payments for the duration of your lease term - usually three to five years.

Leasing used to be the only way to enjoy access to the latest electric car models without the commitment of full ownership, but today, a subscription is proving a more popular - and more convenient - option. With a car subscription through Onto, you can drive the newest electric cars as soon as they’re available with no deposit and a flexible monthly contract.

Do you want to take care of your own maintenance and insurance cover?

Whether you own or lease your electric car, you’ll be responsible for securing your own insurance. This can involve getting quotes from aggregators, calling individual providers directly to see what they can offer, and then having to make a number of decisions about the things like the level of cover, your voluntary excess, and any other add-ons. The whole process can take hours - or even days.

You’ll also have to look after any maintenance needs. You may be comfortable taking on some of the smaller jobs, but when it comes to the bigger stuff, you’ll need to take it to a professional. For some lease agreements, you’ll be restricted to a short list of approved professionals - and these may be much pricier than other options around.

When you choose a subscription with Onto, you can enjoy all-inclusive access to your electric car. We take care of insurance, maintenance, and even free public charging options. So you can spend that time behind the wheel - not in front of a screen.

Does the distance you drive vary from month to month?

When you’re applying for a lease, you’ll be asked to estimate how many miles you drive on average over a month or year. This number will then be used to determine the mileage limit on your lease. 

If you exceed your mileage allowance, you’ll be charged some pretty hefty fees. Leases with higher limits tend to be more expensive, so some drivers will try to underestimate their averages to save some money - only to end up paying more in excess charges.

Wouldn’t it make more sense to assess your mileage needs every month - and shouldn’t you be able to choose to top it up when you need to? We think so, which is why every subscription with Onto includes a monthly allowance of 750 miles and the opportunity to purchase an additional 250, 500, 750, or 1,000 miles a month up to a total maximum of 1750 per month.

And if you don’t use all of your allowance in one month, don’t worry! The miles stay in your account for one year, so you can use them next month - or the month after.

How long do you want to drive the same car?

When you own your car, it’s yours until you decide to sell. That could mean a decade (or even more) of driving the same car. Over that time, you might find that it no longer suits your needs, and the hassle of selling may keep you from finding something that works better for you.

Compared to ownership, a lease seems flexible: you can drive a new car for a few years, then choose a new model. But a three- or five-year lease is still a pretty big commitment. With so many advancements being made in electric cars and new models coming to the market, do you really want to drive the same one for years?

Only subscriptions with Onto offer a truly flexible approach to driving an electric car. Subscriptions run on a monthly basis, so you can take advantage of access to the latest models with the longest ranges, like the Tesla Model S, or go for something practical for the school run then spend the summer in something more fun!

Related articles

• Car leasing: Personal contract hire vs subscription: Is leasing still the best way to drive the latest electric car models? We give an overview of PCH, and share how subscription is changing access to electric cars.
• What is guaranteed minimum future value?: What does GMFV mean, and how can it affect your personal contract purchase lease? Learn more about this figure and how it’s calculated.
• What’s the best car to lease in London?: Whether you commute into the city every day, head out of town at the weekends, or spend your free time going much further afield, we explore some of the top electric vehicles to consider.