The electric car revolution is well and truly underway. It feels like a month doesn’t go by without a manufacturer announcing a new model, with electric line-ups expanding all the time. It’s all in anticipation of the Government’s ban on the sale of pure-petrol and diesel vehicles in 2030, with even new hybrids banned from being sold from 2035.
With all this going on is no surprise that demand for new and used electric vehicles is one the rise, and therefore questions about buying them are arising.
Is electric vehicle finance the same as regular finance?
In its most simple terms, yes, financing an electric vehicle will be no different to financing any other car. In the vast majority of cases you’ll still be able to choose between hire purchase (HP) and personal contract purchase (PCP), which generally involve an upfront payment followed by a set number of monthly payments.
There are a few things to consider, though. The first is that electric vehicles tend to be more expensive at the point of purchase, so your payments might be noticeably higher. However, studies have shown that they tend to cost less over the life of a loan. This is because electricity costs less than petrol and diesel, road tax is lower and repairs/servicing should cost much less.
I’ve heard about battery leasing – what does this mean?
Battery leasing could be the biggest difference when it comes to car ownership. In some cases, the cost of the battery is included in the purchase price, and other times you have to lease the battery separately. You might also be given the choice, but it’s important to know what the cost you’re paying includes as you don’t want a nasty surprise later.
The reason some companies let you lease the battery separately is because all batteries in all appliances lose capacity the more they’re used. If you pay for the battery upfront you could be liable for the cost of replacing it if it fails or drops below a certain capacity, whereas paying monthly to lease it means you should be able to get a replacement when it drops to a certain level.
How do I pick the right electric vehicle?
Much like when buying a regular car, you need to make sure you pick the right electric vehicle for your needs. Much like you wouldn’t buy a sports car for the school run, you don’t want a low range EV if you often travel long distances.
Battery range is often key, because if you regularly travel long distances on motorway you need to aim for vehicles with larger batteries that can go further between charges. In this case, you could also aim for vehicles that can charge quicker so top ups take less time when needed.
However, if you stick to the city and don’t need much range a smaller car could save you big money. And if you can charge at home, you don’t need to worry too much about fast charging vehicles, which could save cash further.
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