A new study claims that an electric vehicle lease is more affordable than purchasing or leasing a gas-powered car.
Car prices have risen steadily since the COVID pandemic, as the automotive industry has grappled with supply shortages and production disruptions. The average cost of a new vehicle in July was $48,334, $200 higher than in 2022. However, while EVs are still more expensive than the average cost of a new car, prices in the segment have trended the opposite direction in the same timeframe, hitting $53,469 from $65,108 last July. Coupled with federal and state sponsored incentives, drivers can now save substantial amounts by opting for an electric vehicle lease when making their next car purchase.
Researchers from Energy Innovations compared monthly costs for an electric vehicle lease to both lease and loan payments for comparable gas-powered cars. Out of the 14 models studied, an EV lease was cheaper than either option, with drivers seeing up to $500 in savings from some brands. Government tax incentives, namely the Inflation Reduction Act’s $7,500 EV credit, drive costs down even further, decreasing monthly payments by up to 12%.
Leases are an often overlooked alternative to traditional car purchases and have dropped even further off consumer radars since the COVID pandemic. Speaking to CBT News in June, Kevin Tynan, automotive analyst for Bloomberg Intelligence, noted that the 2022 car market saw a lease penetration rate of only 18% compared to 28% in 2018. However, given the potential savings of an electric vehicle lease, not only do dealers have the opportunity to expand their leasing business, but they can also help accelerate the EV transition. Retailers may want to leverage this option in the coming months while prices continue to fall.