When Anthony Santos was searching for a automotive to change his Audi Q3, a diesel SUV, he felt reluctant about making the swap to an electrical automotive.
“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 capacity to lease a used electrical car (EV) caught his eye.
A few years in the past somebody searching for their subsequent automotive would have been arduous pushed to discover a used EV – not to mention lease one – however that is altering quick.
There are now 1m EVs on British roads, and the vehicles purchased by early adopters are hitting the secondhand market.
Typically talking EVs have misplaced worth extra rapidly than petrol or diesel vehicles, which is a giant downside for the homeowners of leasing corporations, rental companies or company fleets. However the flipside for shoppers is that it is potential to discover a low-cost leasing deal.
In the second quarter of 2025, the variety of used automotive leases in the UK rose by 166%, in contrast with the identical interval a 12 months in the past, with electrical vehicles driving the development, in accordance to the newest knowledge obtainable from the British Car 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 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 part of the UK’s largest energy supplier, the variety of used EV leases has doubled in the final 12 months.
The image is helped by proven fact that massive gamers in 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 common price ticket of a brand new electrical car sitting at £50,000, placing them out of attain of many Britons, in the summer time the authorities launched a subsidy scheme. However shopping for secondhand makes going electrical much more inexpensive.
Santos found that he might lease a frivolously used Mercedes-Benz EQA with out paying something upfront. His firm supplied a wage sacrifice possibility (extra on that later) by way of the Electrical Automobile Scheme, which meant he might pay £360 a month for a automotive that will normally value £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, sometimes for 2 or three years, avoiding the want to stump up tens of hundreds of kilos upfront. In addition to the automotive, prices equivalent to highway tax, breakdown help, service and upkeep are usually included – however sometimes not issues equivalent to insurance coverage.
Leasing a used EV is loads cheaper than shopping for a brand new one, even for autos in good situation that are solely two or three years outdated. Which means dearer fashions will be extra inexpensive, making it simpler for folks on decrease incomes to cut their carbon emissions.
The Electrical Automobile Scheme offers the instance of the Škoda Enyaq, an SUV. On an ordinary 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 value might be picked up by the proprietor. Lessees will nonetheless have to pay injury outdoors truthful put on and tear, and a few additionally add an extra mileage cost. Whereas 10p a mile might not sound like a lot, high-mileage drivers can have to think about whether or not they may face a giant additional invoice after they hand the automotive again.
Wage sacrifice
The very best offers will nearly definitely be restricted to these whose employers have signed up for a salary sacrifice scheme. The important thing factor about wage sacrifice is that the value is deducted from your pay before tax – decreasing your tax invoice. How a lot you save relies upon on 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 shopper enterprise of Zenith Group, says wage sacrifice has been “a serious basis stone of the transition” to electrical vehicles due to the tax benefits.
Many employers supply wage sacrifice – ranging from very small corporations to family names equivalent to HSBC, BT and Jet2, in addition to various NHS trusts. There are normally no charges for the worker, however employers pay the scheme supplier the equal of the tax saved from decrease nationwide insurance coverage contributions.
Typically the corporations providing wage sacrifice impose circumstances, such at the least contract size, or a gross primary wage above a sure threshold. Individuals leasing may even have to undergo a compulsory credit score examine, in addition to affordability checks to ensure they will deal with the month-to-month funds.
There are nonetheless choices for somebody whose employer does not 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 value £256 a month. That is nonetheless considerably greater than the £209 supply for these in a position to use an employer’s scheme, however properly beneath the £310 a month (on high of a £3,000 upfront fee) for the equal new mannequin purchased from Mini instantly.
Gary Comerford, a advisor who runs the EV Musings podcast for electrical automotive drivers, says his expertise of leasing a used EV is “very clean” however provides that he would not say it is flawless. He might not do a take a look at drive before committing by way of Car360, though he had the possibility to return with no questions requested inside 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 finances it’s fairly straightforward to get a lease,” Comerford says – though he provides that limiting tax advantages to wage sacrifice is unfair to self-employed folks like him.
Some optionally available extras will be included with the automotive (and might profit from wage sacrifice tax financial savings), equivalent to automotive insurance coverage, house chargers, and even electrical energy.
At the finish of the time period the selection is usually to both lengthen your lease or hand the automotive again, though some corporations additionally supply the capacity to purchase the automotive outright. Notice although: early returners will most likely find yourself paying an early termination price (though charges for wage sacrificers are normally waived in the event that they go away they employer by way of resignation, redundancy or dismissal).
If it really works for you, and also you meet the circumstances, 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 stability of 20% and 40% taxpayers”, he says.
Beating depreciation
Leasing corporations are not 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 overall demand for EVs.
Leasing corporations have a big provide of quickly depreciating autos, says Toby Poston, the BVRLA chief government. They do not need to promote at a steep loss, so leasing helps clear up an issue.
Holding on to electrical vehicles means leasing corporations can proceed to earn a living from them. The trade’s expertise with hundreds of electrical vehicles is that there are far fewer breakdowns, in contrast with equal petrol or diesel vehicles, which means they are much less probably to face large restore payments as the autos age.
Hughes expects Zenith’s vehicles to undergo two and even three drivers over eight years before they promote it on – doubtlessly which means no residual loss by any means. (Opposite to one persistent anti-EV declare, significant battery degradation is “simply not a factor” for the common automotive, he says. And most EVs include eight-year producer warranties on batteries, which implies leased vehicles could be coated.)
With out pricey breakdowns to fear about there is “much less potential danger” so it simpler to supply leases, Poston says. At the identical time, there is “overproduction of vehicles throughout the world”, he provides. “The offers you may get now are stupendous.”
Disclaimer: This article is sourced from external platforms. OverBeta has not independently verified the information. Readers are advised to verify details before relying on them.
