What is the cheapest electric car lease in the UK? Can I, or the business, do a short-term electric car lease? Do you get free maintenance with electric cars?
All very good queries, some of which were raised at our recent Leigh Expo where we showcased a number of cars to the public and local Manchester businesses.
Most automotive customers are now working hard to understand not just the vehicles, financial products and whole-life costs but to also understand the significance of choosing the right fuel.
What is the best fuel to use for a car? This is very much a subjective and circumstantial question and is far from easy to answer. As leasing brokers, we work closely with a customer to help them understand the advantages and disadvantages of each fuel choice for both them and the business, with a view that a decision is made to take a vehicle (and engine) which suits their medium to long-term needs and requirements.
However, the rate of change with product, infrastructure and taxation means that our advice comes with some significant caveats!
The crucial point for customers to note is that they need to carefully consider the bigger picture; just because an electric car may be £200 per month (and offer an almost free company car tax position) it might not necessarily result in you receiving the correct vehicle for you or the business.
Are all electric vehicles expensive – are there any affordable ones? One of the biggest, and most obvious, issues with electrification has been cost. The early product to reach the market is never (and hasn’t) been the most cost effective. Some of the first personal and business customers have helped to pioneer the changing vehicle landscape.
We suppose one of the elements making customers turn away from purely electric vehicles is that much of the product seems to sit in the prestige and luxury section – Tesla Model S and X, Audi e-Tron, Jaguar I-Pace and the Mercedes EQC.
While these cars look, and operate, fabulously, what manufacturers need to be conscious of is alienating potential customers to the concept. There is belief all electric vehicles will be £50-60,000+ and will become the reserve of the wealthy and the company car users with a healthy budget.
The growth of electric cars is going to come from the middle-class and those company car users who do not have exquisite budgets.
Therefore more cost-effective and practical solutions are required. The good news is that the growth of the industry is seeing a reduction in the cost of batteries which are the crucial component of the vehicles. However, manufacturers are now putting together product which is more affordable. A list of cheaper electric cars includes:
These cars, together with Hyundai Ioniq, are becoming cheaper and affordable for the UK drivers. Monthly rentals in the leasing industry are no longer the main obstacle.
So can we offer weekly/monthly solutions? Understandably, customers who are new to electric vehicles do not want to commit to long-term finance products straight away.
The prospect of buying an electric vehicle, either cash or hire purchase, is an alarming one for customers who have little appetite for risk and changing residual values.
Couple this with a growing infrastructure/support network in the UK and you have an uneasy platform for some individuals and businesses. The move to towards contract hire is not surprising; our prediction is that this will be the foremost way for most customers to use these types of vehicles. First and foremost, this is not an ownership product and so the usership elements support the customer by ensuring any pricing or residual risk lies with the finance company.
Additionally, the rapid changes in technology and batteries will see vehicles change and develop regularly; it is unlikely customers will want to keep vehicles long-term. However, contract hire is still a long-term finance product. By which we mean you must enter into a fixed contract for 2, 3 or 4 years on the vehicle. Contract hire is not a flexible arrangement; if the car doesn’t meet your requirements or you want to swap/upgrade this can only be done with certain cost penalties. There is really a gap in our market for shorter-term flexi-lease style products on electric cars.
While come rental companies are exploring this, the issue is price. While it is possible to rent a car on a weekly/monthly commitment, this flexibility will cost you or the business far more per month than a contract hire solution.
Anything in advance of 3 months will make most customers truly consider how beneficial that flexibility actual is. Our advice to customers is to test-drive the product first and to research their personal/business infrastructure to ensure it supports charging requirements. For those with a little trepidation, consider a 2 year contract. While this could “cost” more per month, this will prevent any nasty early termination bills.
So do I have to maintain an electric car with a lease/contract hire or is it included? Electric vehicles do need a different approach on the servicing/maintenance side; there are clearly no engine components to replace, oil servicing or engine additives required. This is something manufacturers are bringing to customers attention; Tesla have been somewhat forthright in saying their vehicles will be usable without the need for any servicing whatsoever.
Not all manufacturers are taking this route and there are still normal servicing interval obligation on the vehicles.
The obvious point is that servicing should be ideally much cheaper for the customer, as there is actually not that much to service on the vehicle! This is clearly bad news for the dealerships and their absorption but great news for the end user. Many vehicles will be serviced or improved via downloadable content and updates. However, electric vehicles do still use tyres and any wear/tear and punctures must be replaced. But who is responsible for it? With contract hire you have two choices – 1) maintain yourself under a funder-maintained arrangement; or 2) have this included with the contract under a funder-maintained agreement. This is where customers need to again consider all the facts and circumstances.
It might be cheaper per month to go driver-maintained but have you considered the cost of tyre replacements any servicing obligations? Again, much of this is about appetite to risk – if you want to reduce risk and make the process easier, you need to go down the funder-maintained route.
In terms of the car shown here, the Hyundai IONIQ SALOON 88kW Electric Premium SE 28kWh 5dr Auto, this is based on the following configuration:
· Intense Blue metallic paint
· Leather – Grey with blue stitching
· 16″ alloy wheels
As standard the “luxury model” here includes automatic rain sensing wipers, heated rear windscreen, solar glass with windscreen band, EP, auto hold, hill start assist, Apple carplay/android auto, Bluetooth, adaptive cruise control, attention assist, front/rear parking sensors, blind spot monitoring, lane departure warning system, lane keep assist, parking guidance system, rear cross traffic alert, rear view camera, 8” touch screen with navigation, supervision cluster with 7” display, smartphone with wireless charging, auto dimming rear view mirror, body coloured externals, electrically adjustable/folding/heated door mirrors, DAB radio, Infinity sound system, automatic headlights, LED headlights/daytime running lights/fog lights, climate control, heated steering wheel, leather steering wheel, leather upholstery, autonomous emergency braking, driver’s seat with electric adjustable lumbar support, heated front and rear sets, ventilated front seats, 16” alloys, keyless smart entry with push button start and immobiliser. With the exception of a 7kW charger, there are no additional features you can add to the car except change the colour.
On the technical-side company car and business users can note the P11d at £32,476.00 and CO2 at 0g/km. The 28kWh lithium-ion battery will deliver a 174 mile range on a full charge, 120ps and 0-62 times of 10 seconds. The electric Ioniq has service intervals of every 12 months or 10,000 miles whichever lands sooner.
So would you select the Ioniq as your next electric car leasing deal? Or would one of the electric options below be more your cup of tea.