According to a recent article from CNET, experts are recommending leasing over buying when it comes to electric vehicles (EVs). This advice comes amid fierce online debates about the merits of each option.

The $7,500 Federal Tax Credit Loophole

One of the main reasons experts favor leasing is a loophole in the federal EV tax credit. While strict requirements limit which EVs qualify for the $7,500 credit when purchased, more vehicles are eligible when leased. This is because leasing companies can claim the credit as a commercial sale and pass the savings on to lessees.

Sean Tucker, lead editor at Kelley Blue Book, explains: “You should lease an EV right now. At this current point in time with EVs, it’s very prudent.”

Advantages of Leasing an EV

Leasing an EV offers several benefits:

Easier access to the $7,500 tax credit
Opportunity to try out EV technology without long-term commitment
Ability to upgrade to newer models with improved range and features
Potentially lower monthly payments compared to financing

Joseph Yoon, an analyst at Edmunds, states: “Even if you intend to buy, the best way to go about it is to start with a lease.”

The Downsides of Buying an EV

While buying an EV has its advantages, there are some drawbacks:

High interest rates can make auto loans expensive
Fewer EVs qualify for the federal tax credit when purchasing
Rapid technological advancements may outpace the vehicle you buy
Potentially faster depreciation compared to traditional vehicles

Crunching the Numbers

CNET compared leasing versus buying a 2024 Tesla Model Y (MSRP $50,380) over 48 months:

Leasing: $496 monthly payment, $23,808 total cost
Buying: $1,055 monthly payment, $45,453 total cost (but you own the vehicle)

These calculations assume the $7,500 tax credit applies to both scenarios and include taxes and fees.

EVXL’s Take

The current landscape clearly favors leasing EVs for most consumers. This trend aligns with the rapidly evolving EV market, where newer models with improved range and features are constantly being introduced. As we’ve seen in our recent Tesla coverage, manufacturers are continuously pushing the boundaries of EV technology.

Leasing allows drivers to stay current with these advancements while potentially benefiting from lower monthly payments. However, it’s important for consumers to carefully consider their individual circumstances and long-term goals when deciding between leasing and buying an EV.

What are your thoughts on leasing vs. buying an EV? Share your experiences in the comments below.