If you’re thinking of leasing an electric or hybrid car, chances are you’ll have some questions as whether it’s right for you. From charging options and range concerns to running costs and model choice, there are many benefits – and drawbacks – to leasing a ‘green’ vehicle.
To help you make an informed decision, Nationwide Vehicle Contracts has put together a comprehensive guide explaining the advantages and disadvantages of leasing an electric or hybrid car versus a conventional petrol or diesel fuelled vehicle.
|Low Fuel Costs||Yes||Yes||No|
|Greater Model Choice||No||No||Yes|
|Low Purchase Price||No||No||Yes|
|Reduced BIK Rates||Yes||Yes||No|
|Low Running Costs||Yes||No||No|
An electric vehicle, also known as a Full Electric, Battery Electric Vehicle (BEV) or EV, is a vehicle powered solely by an electric motor. Unlike a traditional petrol or diesel vehicle which is fuelled by gasoline or diesel, electric cars function by plugging into a charge point and taking electricity from the grid. They store the electricity in rechargeable batteries which then power an electric motor, which turns the wheels.
Compared to the cost of petrol or diesel, electricity is significantly cheaper. According to the Energy Savings Trust, an electric vehicle can run for 100 miles at a cost of £2 to £4 based on a full charge at home, while a petrol or diesel can cost £13 to £16 per 100 miles. While there are ways to reduce your expenditure on fuel, electric charging costs are likely to be over a tenth of what you could pay for petrol or diesel.
As pure electric vehicles (EVs) don’t have an exhaust system, they produce no tailpipe emissions. This means they do not emit toxic gases or smoke in the environment like a traditional petrol or diesel car. This not only helps improve air quality, particularly in urban areas but also means you can take advantage of government grants and tax incentives to help reduce the total cost of ownership.
Imagine never going to visit a petrol station ever again! Thanks to dedicated home charging units – of which you can benefit from a Government grant of up to £500 towards the installation – it’s never been easier to charge your electric car at home. Simply plug in, charge overnight and your fully charged electric car will be ready for you in the morning.
There are significant tax incentives for making the switch to electric. The UK Government is offering a plug-in car grant with a discount of up to £3,500 for eligible electric cars as well as grants to help towards the cost of installation home, workplace and on-street charge-points. Company car drivers can also benefit from lower Benefit In Kind (BIK) rates, representing huge savings for the driver.
An electric vehicle has a lot less moving parts than conventional petrol or diesel cars, with no expensive exhaust systems, starter motors, fuel injection systems and radiators to maintain. As such, servicing and maintenance costs can be significantly lower, making overall running costs cheaper than those of a petrol or diesel car.
Electric cars are limited by range so therefore can’t travel as far on a full-charge as petrol or diesel vehicles can on a full tank. While EV range is constantly improving, most electric vehicles have range of 60 to 100 miles before they need recharging again. As such, many customers still have range anxiety, fearing they won't be able to get to their destination, particularly on long journeys, without having to charge their car up.
While EV public charging points are certainly growing in numbers, they’re still dramatically outnumbered by petrol stations. Many outer city and remote areas don’t have the EV charging facilities readily available, meaning that if you don’t plan your journey appropriately, you could end up searching endlessly for a charge point, or even worse, run out of charge completely.
Unlike a gasoline powered car which takes a couple of minutes to fuel, charge times for an electric car take hours. While most electric cars take about four to six hours to be fully charged, some can take a whopping 15 to 20 hours. As such, recharging your EV is a significant time investment and if you’re out and about, you’ll need to be prepared to stick around until a charge has completed.
While electric vehicles can be cheaper to run than fuel-powered counterparts, they are still relatively expensive to buy or finance. Electric cars carry a premium of around £10k over an equivalently sized petrol or diesel powered car, although lower running costs will help offset the initial higher price tag. This is because electric vehicles typically have higher cash prices, restricted supply and typically lower resale values.
While there’s a greater variety of electric cars than ever before, there is just not as much choice when compared to conventional vehicles. Most car manufactures just have one or two electric vehicles in their range and most are small in size and not really designed to carry the entire family. On the upside, this is expected to change as EV prevalence continues to grow.
Often seen as a stepping stone between a traditionally fuelled car and a fully electric vehicle, a hybrid vehicle combines an internal combustion engine (petrol or diesel) and an electric motor to power the vehicle. Typically, in a hybrid, the electric engine powers the car at lower speeds and the gas engine powers it at higher speeds. There are three different types of hybrids available in the UK: mild hybrid (MHEV), full hybrid and plug-in hybrid (PHEV).
While a hybrid vehicle may not be as environmentally friendly as a pure electric vehicle (EV), they are significantly cleaner than a traditional gasoline powered vehicle thanks to their twin powered engine. In a hybrid, the electric motor and the gasoline engine work together to reduce fuel consumption and conserve energy, making them cleaner than a petrol or diesel fuelled car.
Driving a hybrid is similar to driving a conventional automatic car, so there’s little compromise on performance. Most modern hybrids also offer a choice of driving modes too, ranging from eco to power, enabling the driver to choose maximum efficiency or performance depending on the driving conditions.
Whether you opt for a Full Hybrid (also known as a self-charging hybrid) or a plug-in hybrid (PHEV), you never need to worry about range anxiety when driving a hybrid vehicle. Unlike an electric car which needs electricity to run, if you run out of electric power in a hybrid vehicle, the internal combustion engine kicks in, meaning you’ll never be stranded whilst looking for a charge point.
Whilst tax incentives for hybrid vehicles, particularly PHEVs, aren’t as good as they used to be, hybrid vehicles still offer significant tax benefits, especially for company car drivers. Company car drivers still pay less Benefit-In-Kind (BIK) tax than drivers of petrol or diesel cars and vehicles emitting less than 75g/km also qualify for London congestion charge exemption.
When driving in electric mode, hybrid vehicles offer a quieter, often smoother drive than their conventional petrol or diesel counterparts. At lower speeds, particularly when driving around towns or in busy cities, engine noise is almost entirely eliminated, making for an all-round more peaceful environment, for both driver and passengers.
Although the gap is narrowing, hybrids cars can be more expensive to buy or lease than a regular diesel or petrol vehicle thanks to their technology. Purchase prices for hybrid cars can be around 20% higher than for their non-hybrid petrol and diesel equivalents, although some of this cost can be offset with lower running costs and tax exemptions.
The location of the battery pack in a hybrid car can often result in less-than-ideal weight distribution in the vehicle, which in turn, can affect handling. As such, a hybrid car can sometimes feel less agile on the road than a non-hybrid version with drivers often feeling the additional weight through the steering wheel. This is why many hybrids are suited for city driving more than speed and acceleration.
With both an internal combustion engine and an electric motor to maintain, hybrid vehicles generally cost more to repair than that of a petrol or diesel fuelled vehicle. In addition to higher maintenance costs, not all garages are also equipped to service or repair a hybrid car due to the technology found in the vehicle so drivers may have to visit their local dealership to have the vehicle serviced.
For a hybrid vehicle to truly be cost efficient, the vehicle needs to run in electric mode whenever possible to reduce fuel consumption. While most hybrids can achieve this when driving at low speeds around town, the electric range on many hybrids is still limited, with most PHEVs achieving an electric range of 30-35 miles before needing to be recharged and many Full Hybrids running on electric power for only just a few miles at relatively low speeds.
While almost every manufacturer now offers a hybrid version in their model line-up, lead times for hybrid vehicles can be significantly longer than their petrol or diesel counterparts. Delivery times for PHEV models can range from 10 weeks to six months, with lead times set to increase further as demand for hybrid increases.
View our latest electric and hybrid car leasing offers or give one of our specialists a call on 0345 811 9595.