With new car prices so expensive, and people trying to save money on their monthly bills, more and more people are choosing to lease a new car rather than buy one. But what if you want an electric vehicle? Is leasing a better deal? Consumer Reports says right now, yes.
The number of electric cars on the road is growing – maybe because there are thousands of dollars in incentives to help reduce the cost. But Consumer Reports says cashing in on a $7,500 tax incentive can be tricky if you’re a car buyer. Here’s why:
- The vehicle has to be assembled in North America
- Its battery components and minerals must meet specific sourcing requirements
- The car has to cost under a certain amount
- Your income can’t be over another amount
- You’ll only get that money back after your taxes
“If you’re set on buying a car and you know you qualify and you’ve talked to a tax professional, you know the car’s going to qualify, you can go ahead and do that. It’s going to get a little easier next year as dealerships are going to be able to process and give the credit at the point of sale, which makes it simpler, but it is really complex right now,” said Consumer Reports Autos Editor Keith Barry.
But if you’re eager to drive an EV now, Barry says a lease may get you on the road faster!
“The long and short of it is, all those rules go out the window if you lease a vehicle, no matter where the car was made, no matter how much it cost, you can get that full $7,500 off the total price of the vehicle. And then the leasing company processes that credit up front which lowers your monthly payments,” he explained.
Of course, the usual leasing rules apply. Along with a down payment, you’ll make monthly payments for a set number of months – and for a set number of miles. And at the end of the lease, you return the car to the leasing company.
Those rules can deter some traditional car buyers, but in the case of an EV, they might work to your advantage.
“Electric vehicle technology is changing really, really rapidly,” said Barry. “There are new cars coming on the market. Range is getting longer for battery powered vehicles, so the car that you buy today might end up being outdated in a few years, and leasing can help you avoid getting stuck with yesterday’s technology.”
And as automakers continue to lower the price of electric vehicles to try and attract more buyers, you won’t take the hit if your leased vehicle is suddenly worth less.
No one has a crystal ball to see the future, but if demand for used EVs is still high at the end of the lease, Barry says it may make sense to purchase the car for the buyout value that’s written into the lease contract.
Consumer Reports says don’t forget one important thing: you can negotiate the cost of a lease. There’s a competition for your business so it never hurts to ask them to waive dealer fees and other markups.
Solutionaries series
We know a lot of you have questions about EVs, so we got answers as part of our Solutionaries series. We looked at range anxiety – AKA will my electric car make it to my destination? Also, we found out how to make sure you find the best charge.
Here are the ways to watch:
- On your streaming device, go to News4JAX+ and look under the Solutionaries category.
- On YouTube – And while you’re there, be sure to check out our Solutionaries channel and click subscribe so you don’t miss future stories that offer solutions to issues that may be affecting you and your family.