Here’s why it’s a good time to lease an electric vehicle

It’s getting cheaper to lease an electric vehicle, as high interest rates make buying a car more costly, and as dealers roll out incentives in an effort to clear lots amid cooling interest in battery-powered cars. 

Owning a car outright is expensive. The average price of a new car was $48,401 in July, according to data from Kelly BlueBook. Electric vehicle buyers spent even more: The average EV sales price in July was $56,520, the same data shows. 

But leases on EVs are emerging as a more affordable alternative to EV ownership, appealing as well to consumers who aren’t sure they want to commit to a battery-powered car.

“There are some absurdly cheap deals on EV leases right now,” Ivan Drury, director of insights at Edmunds, a car shopping resource, told CBS MoneyWatch. “Leasing is not just the preferred method because it lets you test the waters with a vehicle type you’ve never had before, but it’s also so affordable. It’s almost a no-brainer you see consumers go this route.”

Another reason more consumers are looking into signing leases for electric cars is that the federal government’s $7,500 tax credit for clean vehicles comes with fewer restrictions when applied to EV leases, versus purchases. For example, when purchasing an EV, the vehicle must be manufactured in the U.S. in order to for it to qualify for the credit. 

That requirement, however, doesn’t apply to leases. So, a lease on the Hyundai Ioniq 5, which is made in South Korea, would be eligible for the discount. 

“None of the restrictions apply if you are leasing,” said Sean Tucker, lead editor for auto resource Kelley Blue Book. “So there are a lot of attractive EVs you can get discounts on by leasing, but not purchasing.” 

Consumers can expect to sign lease agreements for around $300 a month, according to Tucker, though that figure can vary widely from one manufacturer to another. 

Drury said average monthly lease payments on EVs are $578 a month. At $319 a month, one the lowest available rates as of August was on the 2024 Kia EV6, according to KBB. 

The combined factors of vehicles sitting on lots for longer than usual, the federal tax credit, and dealer price cuts, are saving consumers hundreds of dollars a month, according to Drury. “Consumers are getting the trifecta, and it’s not going to last forever,” he said.

Drury advises consumers who are interested in owning an EV to seriously pursue offers that might suit them in the coming months. Folks who have never driven an EV before can even rent one for a week or two, before committing to a years-long lease, he added. 

“Look into it, because you really could score a smoking deal on a vehicle that won’t require a lot of maintenance,” he said.