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Leasing an electric car, yes or no?

Today, anyone deciding to lease a vehicle should consider whether an electric car is the right alternative.
10 avril 2020

Elektroauto leasen

The leasing of a car in today’s time is an economical and widespread solution to buying a new one. This is not only true for companies and business people, but all drivers alike. Some providers offer additional customer services, which are conveniently covered by your monthly leasing payments- making your only concern, your next destination. This is one of the biggest advantages of leasing, apart from the tax advantages for company cars. At the same time, automobile manufacturers are in a state of major transition, moving away from the outdated combustion engine and towards a clean alternative, the electric car. Both the market and vehicle legislators also offer many attractive incentives for going electric. While there are many deciding factors for or against leasing an electric car, such as availability and of course the economic cost, our guide covers the most important points.

Advantages

  • Role model function (professional and private), at the moment, one is still noticeable with an electric vehicle, that will change soon in the near future
  • Proof of less or no CO2 emissions, limiting contributions to global warming
  • Low environmental impact due to lubricating oil
  • Less smog or noise pollution produced
  • Currently exempt from the tax on fuel (see link)
  • In various cantons, such as Thurgau, there are already subsidies of 4000 francs (see link)
  • Driving comfort, acceleration, slow traffic, use of braking energy
  • Presence of free public parking spaces for electric vehicles with charging stations

Drawbacks

  • Driving range limited from 150 to 400 km
  • Full charging duration may be lengthy
  • High load on power grid due to quick-charging stations
  • Unclear environmental impact of used car batteries

Remarks

  • If you lease an electric vehicle today, you won’t have to worry about the resale value and the aging of the battery.
  • Comparison for commuters: 4 years times 250 days at 100 km per day = 100'000 km. Petrol 6 litres/100 km = 6,000 litres. 6'000 liters times 1.67 CHF/Liter = 10'000 CHF VS. Electricity 20 kWh/100 km = 20'000 kWh. 20'000 kWh times 0.20 CHF/kWh = 4'000 CHF

The trend is moving towards electric cars

As more and more manufacturers are jumping on the trend of electric cars due to legal and market changes, there is now a considerable range of available models to choose from. Compared to the standard fuel engine, the advantage of leasing an electric car is that, possible renewed legislative adjustments will not have a negative effect on you and may even serve to your advantage. On the one hand, some cities, such as Basel, already offer specially designated parking spaces. This way, you can avoid the tedious search for a parking space with your e-car and recharge while shopping at the same time. You can also enjoy discounted parking fees. Depending on the canton, you may also pay less motor vehicle tax or even no tax at all. Even the automobile tax, which otherwise amounts to 4% of the vehicle price, is eliminated when driving an electric car. Leasing an electric car can therefore already be a very attractive alternative today and also offers some beneficial financial incentives.

Model selection

When deciding on a leasing car, the choice of model is of course a significant factor. Fortunately, car manufacturers have long recognized the trend and now offer different models for every need. Making it essential that you limit which models from which manufacturers are suitable for your own needs. The range is quite large and varieties such as fast city models, to luxurious limousines with ample space and performance, are widely available. Think in advance about your main purpose for the vehicle. If you live in the city, mainly drive short distances, use the vehicle for commuting to work, shopping and occasional excursions, a smaller, more compact car might make the most sense for you. Here, the very inexpensive models with driving ranges of around 100-150 km may be an option, since you will always be close to a charging station. The Mitsubishi i MiEV or the Smart fortwo EQ are good value vehicles at a low price. A family man who lives in the village, commutes and goes on holiday by car every year needs both a larger model and one with more driving range. Today, there are several models with a range of around 500 km and more powerful electric motors. The KIA Soul or the Hyundai IONIQ Electric, for example, are particularly powerful and offer enough space for families. In between, lies a wide range of electric cars with a medium driving range of 250-350 km at a middle price point.

A good overview of the available electric car models can be found here.

Support - also available for leased vehicles.

Another plus point for the electric car is the state subsidy, which also applies if the car is leased and not bought. Switzerland has set itself the target of 15% of newly registered vehicles being electric vehicles by 2022 and has therefore introduced some attractive incentives. This platform of measures is known as "Roadmap 2022". The aim is to boost the economic attractiveness of electric cars in order to achieve a higher market share. The exact amount of the subsidy depends on the place of residence, as the respective canton decides here whether and up to what amounts the subsidies are granted. There is no reduction in the purchase price, but depending on the canton, you can benefit from attractive tax breaks. Currently, the subsidy applies to the purchase or leasing of a new electric car. When purchasing an electric car, the import tax of currently 4% of the purchase price is waived throughout Switzerland.

Economic Efficiency

The demand for electric cars is increasing not only as a result of subsidies, but also in line with the general trend towards environmentally conscious driving. As a result of this higher demand, the purchase price of a new car has fallen significantly in recent years. If one considers not only the purchase price or the leasing rate, but also the entire cost package including tax and maintenance, electric cars are not necessarily more expensive, in many cases they are already cheaper. In the coming years, this ratio is expected to shift further in favor of electric cars, as prices for fossil fuels will rise. Customer service and repairs are also easier and more frequent for an electric car with significantly fewer parts to service. Depending on the leasing contract, this can also be a financial advantage. As far as operating costs, electric cars, by nature of running on electricity are already cheaper than vehicles with a fuel engine. Electric motors also require fewer resources such as oils and coolants compared to fuel engines. The component that has the most financial impact on the maintenance of an electric car is the battery. Replacing batteries is comparatively expensive. However, manufacturers are working to reduce these costs through new technologies, such as, improved charging cycles and lower manufacturing costs, so this item is expected to be slightly less costly in the future.

Development focuses on electric motors - conventional motors are hardly developed any further

This point is especially important for car enthusiasts, where all car owners benefit from the technical development. In fact, the course is now clearly set for the electric car. If you follow the industry's reports, it becomes clear that the good old internal combustion engine will be out of service sometime in the near future. Of course, this means that manufacturers prefer to concentrate their research and development budgets on more promising products and technologies, like the electric car. So anyone who attaches importance to using technical innovations and keeping up to date cannot avoid the electric car, because further development will take place in this sector. Driving behavior, performance and range are already drastically improved today if you compare this with the initial models. It can be assumed that this trend will continue, leading to a further improvement in range and possibly further technical innovations. Systems that convert braking energy into electrical energy are already under development. If you look at the development of gasoline and diesel engines over the last 100 years in the same way, electric cars certainly promise some exciting developments. So, on the whole, if you want to stay at the cutting edge of technology, you're going to drive an electric car. As far as the combustion engine is concerned, it can be assumed that further development in terms of performance, consumption and economy has now reached its peak. At the same time, this also means that those who are still rather skeptical about the electric car will soon run out of arguments, due to the feverish work being done on existing problem areas, such as the lack of charging facilities and short range, but it is to be expected that these hurdles will be overcome across the board. However, it is worthwhile to think carefully about this point in particular. Technical development can also mean that models available today are outdated quite quickly, which would result in a more rapid decline in value.

Environmental protection

There is a growing awareness among car drivers today that driving should be environmentally friendly as possible. However, the recent debate about diesel vehicles and the current production of batteries for electric vehicles shows that a closer look is needed. The production of batteries is very resource-intensive and some experts are doubtful whether the provision of electric cars in masses can really solve the energy problems and reduce high CO2 emissions. In addition, there is the occasional high demand for electricity for charging electric cars, which could overburden some local networks if the technology becomes more and more established. In return, some scientists condemn the debate about the harmfulness of diesel vehicles as excessive or even incorrect. The fact remains, however, that fossil fuels are an increasingly scarce and expensive resource. Therefore, it is worth considering whether investing in a more promising technology today will advantageous, especially in view of the current subsidies.

Suitability for everyday use - assessing one's own situation

However, the above-mentioned advantages may also prove to be a disadvantage in individual cases. The possibility for every individual to install a private charging station at home is unrealistic and if you travel a lot, you have to plan for longer standing times for recharging, which also not feasible. This makes an electric car a suboptimal choice for those who will use it as a primary vehicle. For occasional shorter journeys with long interruptions, which can be used to charge the batteries, it can be a good alternative instead. Therefore, consider whether an electric car is a viable solution at this time and in your situation. Ultimately, it is a case-by-case decision and we hope to have outlined the main points of pros and cons in this article to make such a decision easier.

Conclusion - Weighing up well and considering your own situation

In summary, it can be said that some can already benefit from leasing an electric vehicle today, while others may need to wait a little longer. The decision depends on several factors. Those who have no reservations about the technical requirements, such as the charging possibilities available, and who find a suitable car with sufficient range among the offered models, can save substantially through subsidies for their purchase. Remember that this also applies to leased vehicles, through tax reliefs and special electricity contracts. Drivers may also have access to many areas in inner cities that are closed to conventional car traffic. If, on the other hand, you drive longer distances several times a day and would constantly reach the limit of your range, you might want to wait a little longer, especially since the network of charging stations is still under construction. If the infrastructure for recharging and the technology and range of the vehicles improve over the next few years, this may be the better time to buy an electric car without having to make too many compromises in practical handling. Until then, some suppliers will also offer favorable conditions for the purchase of a new model with a combustion engine.