Electrical vehicles: might leasing a used EV enable you afford one? | Motoring

[ad_1] When Anthony Santos was searching for a automobile to interchange his Audi Q3, a diesel SUV, he felt reluctant about making the change to an electrical automobile.

“I used to be contemplating it, however I most likely wouldn’t have,” says Santos, a gross sales supervisor at RWinvest, a property funding firm in Liverpool. However when he began taking a look at his choices the power to lease a used electrical automobile (EV) caught his eye.

A few years in the past somebody searching for their subsequent automobile would have been exhausting pushed to discover a used EV – not to mention lease one – however that's altering quick.

Anthony Santos together with his Mercedes EQA, which he leases for £360 a month as an alternative of the same old £570 through a wage sacrifice scheme. There are actually 1m EVs on British roads, and the vehicles purchased by early adopters are hitting the secondhand market.

Usually talking EVs have misplaced worth extra shortly than petrol or diesel vehicles, which is an enormous drawback for the house owners of leasing corporations, rental companies or company fleets. However the flipside for customers is that it's potential to discover a low-cost leasing deal.

Within the second quarter of 2025, the variety of used automobile leases within the UK rose by 166%, in contrast with the identical interval a 12 months in the past, with electrical vehicles driving the expansion, in response to the newest information obtainable from the British Automobile Rental and Leasing Affiliation (BVRLA), a foyer group.

“Three years in the past used EV leasing was very small as a result of there have been only a few used EVs available on the market,” says Thom Groot, the chief government of the Electrical Automobile Scheme, a dealer. From about 15% of gross sales in 2024, used EVs now make up almost half its enterprise.

At Octopus EV, which is a part of the UK’s largest power provider, the variety of used EV leases has doubled within the final 12 months.

The image is helped by indisputable fact that massive gamers within the leasing market, together with Lloyds Banking Group’s Lex Autolease, BNP Paribas’s Arval, and the impartial group Zenith, have began now supply leases on used EVs.

With the typical price ticket of a brand new electrical automobile sitting at £50,000, placing them out of attain of many Britons, in the summertime the federal government launched a subsidy scheme. However shopping for secondhand makes going electrical much more inexpensive.

Santos found that he might lease a calmly used Mercedes-Benz EQA with out paying something upfront. His firm supplied a wage sacrifice possibility (extra on that later) through the Electrical Automobile Scheme, which meant he might pay £360 a month for a automobile that will often price £570.

“There was no deposit – the tax advantages actually made sense,” Santos says. “That’s what made me transfer ahead with it.”

How leasing works Individuals who lease their vehicles pay a month-to-month price, usually for 2 or three years, avoiding the necessity to stump up tens of 1000's of kilos upfront. In addition to the automobile, prices akin to highway tax, breakdown help, service and upkeep are sometimes included – however usually not issues akin to insurance coverage.

Leasing a used EV is so much cheaper than shopping for a brand new one, even for automobiles in good situation which are solely two or three years previous. Which means costlier fashions may be extra inexpensive, making it simpler for folks on decrease incomes to chop their carbon emissions.

On a typical lease a brand new Škoda Enyaq prices about £567 a month, however that falls to £292 for a used mannequin on wage sacrifice. {Photograph}: Arnd Wiegmann/Reuters The Electrical Automobile Scheme provides the instance of the Škoda Enyaq, an SUV. On a typical lease a brand new mannequin prices about £567 a month, however that falls to £292 for a used mannequin on wage sacrifice. Volkswagen’s ID.4 SUV equally falls from £506 to £296 a month, a lower of 42%.

Nevertheless, not each price will likely be picked up by the proprietor. Lessees will nonetheless need to pay injury outdoors honest put on and tear, and a few additionally add an extra mileage cost. Whereas 10p a mile could not sound like a lot, high-mileage drivers should think about whether or not they may face an enormous further invoice after they hand the automobile again.

Wage sacrifice The most effective offers will nearly definitely be restricted to these whose employers have signed up for a wage sacrifice scheme. The important thing factor about wage sacrifice is that the associated fee is deducted out of your pay earlier than tax – reducing your tax invoice. How a lot you save is dependent upon your tax bracket: so lower-rate taxpayers save 20%, higher-rate taxpayers (salaries of £50,271 to £125,140) save 40%, and 45% above that.

Ian Hughes, the chief government of the company and client enterprise of Zenith Group, says wage sacrifice has been “a significant basis stone of the transition” to electrical vehicles because of the tax benefits.

Many employers supply wage sacrifice – starting from very small corporations to family names akin to HSBC, BT and Jet2, in addition to a variety of NHS trusts. There are often no charges for the worker, however employers pay the scheme supplier the equal of the tax saved from decrease nationwide insurance coverage contributions.

Usually the businesses providing wage sacrifice impose situations, such at the least contract size, or a gross fundamental wage above a sure threshold. Folks leasing may even need to undergo a compulsory credit score verify, in addition to affordability checks to verify they will deal with the month-to-month funds.

An electrical 2022 Mini Cooper S with 17,400 miles on the clock would price £256 a month through wage sacrifice. {Photograph}: Malcolm Haines/Alamy There are nonetheless choices for somebody whose employer doesn't supply a wage sacrifice scheme. Carwow’s “Leasey” leasing service, for instance, gives used EVs. An electrical 2022 Mini Cooper S with 17,400 miles on the clock would price £256 a month. That's nonetheless considerably greater than the £209 supply for these capable of use an employer’s scheme, however effectively beneath the £310 a month (on prime of a £3,000 upfront cost) for the equal new mannequin purchased from Mini straight.

Gary Comerford, a advisor who runs the EV Musings podcast for electrical automobile drivers, says his expertise of leasing a used EV is “very easy” however provides that he wouldn't say it's flawless. He couldn't do a take a look at drive earlier than committing through Car360, though he had the choice to return with no questions requested throughout the week. He paid a deposit of £1,200 and pays £310 a month for a 2021 Polestar 2.

“So long as you'll be able to work inside your price range it’s fairly simple to get a lease,” Comerford says – though he provides that limiting tax advantages to wage sacrifice is unfair to self-employed folks like him.

After paying a £1,200 deposit, a 2021 Polestar 2 prices £310 a month. {Photograph}: ZarkePix/Alamy Some elective extras may be included with the automobile (and may profit from wage sacrifice tax financial savings), akin to automobile insurance coverage, residence chargers, and even electrical energy.

On the finish of the time period the selection is mostly to both prolong your lease or hand the automobile again, though some corporations additionally supply the power to purchase the automobile outright. Word although: early returners will most likely find yourself paying an early termination price (though charges for wage sacrificers are often waived in the event that they depart they employer by means of resignation, redundancy or dismissal).

If it really works for you, and also you meet the situations, used leases make it a lot simpler to drive an EV, says Zenith’s Hughes. “The very, very thrilling alternative is it lowers the worth of entry from an affordability perspective,” he says. Zenith’s newly launched used EV wage sacrifice scheme has had “a pleasant steadiness of 20% and 40% taxpayers”, he says.

Beating depreciation Leasing corporations will not be providing offers out of the goodness of their hearts. Providing used EVs helps them address their least favorite phrase: depreciation. They purchased a load of electrical vehicles a few years in the past, just for secondhand, or “residual” costs, to drop greater than anticipated amid slower general demand for EVs.

Leasing corporations have a big provide of quickly depreciating automobiles, says Toby Poston, the BVRLA chief government. They don't need to promote at a steep loss, so leasing helps resolve an issue.

A 2020 MG ZS. The variety of EVs leased within the UK within the second quarter of 2025 is up by 166% on the identical interval final 12 months, taking the full to 40,600. {Photograph}: ZarkePix/Alamy Holding on to electrical vehicles means leasing corporations can proceed to earn cash from them. The trade’s expertise with 1000's of electrical vehicles is that there are far fewer breakdowns, in contrast with equal petrol or diesel vehicles, which means they're much less more likely to face enormous restore payments because the automobiles age.

Hughes expects Zenith’s vehicles to undergo two and even three drivers over eight years earlier than they promote it on – doubtlessly which means no residual loss in any respect. (Opposite to at least one persistent anti-EV declare, significant battery degradation is “simply not a factor” for the typical automobile, he says. And most EVs include eight-year producer warranties on batteries, which implies leased vehicles could be coated.)

With out expensive breakdowns to fret about there may be “much less potential danger” so it simpler to supply leases, Poston says. On the identical time, there may be “overproduction of vehicles internationally”, he provides. “The offers you will get now are stupendous.”