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What is electric car leasing?
According to theFrench Association of Finance Companies (ASF)Three out of every four new passenger cars financed in France are leased with the option to purchase (LOA) ".
Apart from cash purchase, there are two other popular financing methods in France: leasing with an option to buy (LOA) and long-term rental (LLD).
But what is a lease with an option to buy (LOA) ? What is the difference with long-term leasing (LLD) ? What is included?
Read also : Car leasing: how does it work?
What is a lease with an option to buy (LOA)?
A lease with an option to purchase (LOA) allows you to rent a electric vehicle with the option of purchasing the vehicle at the end of the lease.
In simple terms, you pay monthly instalments for a period agreed with the lessor, and at the end of that period you can either buy the vehicle make.
La duration of the contract varies from 2 to 5 years. The rent paid each month to the owner of the vehicle (dealer or lessor) is set out in the terms of the leasing contract.
The advantages are :
- Possibility of redemption or early termination.
- Opportunity for a bargain if the electric vehicle is requested at the end of the contract.
Good to know lease with purchase option (LOA) is similar to consumer credit. You therefore have the right to withdraw up to 14 days after signing.
What is long-term leasing?
A electric car (long-term leasing) allows you to lease it for a period of up to three years. 1 to 5 years. During this period, the lessor pays a fixed rent and benefits in particular from maintenance and assistance services included in the price. At the end of the contract, the lessor returns the electric vehicle to its owner and chooses a new vehicle.
The advantages are :
- A better management of the budget with fixed rents.
- La possibility to change vehicle.
This purchasing method is particularly popular with companies.
Good to know: you can make a buy-back proposal to the leasing company before the end of the commitment period. Although it's more complicated to buy an electric car on a leasing contract, it's possible that the dealer will accepted. However, the buyer will not benefit from an advantageous price; the vehicle will be sold at the market price.
Read also : Everything you need to know about long-term leasing for electric cars
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Electric cars under long-term leasing vs. leasing: what's the difference?
To make things clearer, we've put together a table comparing the two purchasing methods.
| Location avec option d’achat (LOA) | Location longue durée (LLD) | |
|---|---|---|
|
Contribution
|
Yes
|
No
|
|
Kilometric ceiling
|
Yes
|
Yes
|
|
Option to buy back the vehicle at the end of the contract
|
Yes
|
No
|
|
Right of withdrawal
|
14 days
|
No
|
|
Insurance
|
At the tenant's expense
|
At the tenant's expense
|
|
Maintenance
|
At the tenant's expense
|
Included
|
|
Assistance
|
At the tenant's expense
|
Included
|
|
Restoration costs at the end of the contract
|
At the tenant's expense
|
At the tenant's expense
|
Electric vehicles under a leasing contract vs. electric cars under a long-term leasing contract: what should you choose?
It depends on your profile.
- You drive a lot: if you drive more than 10,000 km a year, it is more profitable for you to opt for a leased electric car because maintenance included. If you drive less, you won't use these advantages. What's more, if you drive a lot, there's no point in buying the car back at the end, as its residual value will be very low.
- You don't drive much: In this case, it is wiser to choose a lease with purchase option (LOA). Even if you are responsible for maintenance, the budget will be limited. What's more, you'll have to easier to resell a vehicle that has been driven less.
However, for sectors such as construction and public works, given the risk of damage to the vehicle, it is wiser to take out a leasing contract for your vehicle. professional leasing.
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How should I buy an electric car?
If we summarise the different purchasing methods explained above and the advantages of the electric car, we can draw the following conclusions.
Consumer credit for an electric car
With the current economic climate and low interest rates, taking out consumer credit with a financial institution can be a wise move, as you'll have to pay monthly instalments. The electric vehicle belongs to you, and you are free to do what you like with it. The second-hand market is developing little by little, and the limited production of new electric vehicles and the battery guarantee over the long term are reassuring about resale value, as the indicators are in the green.
| Modèle | Garantie batterie |
|---|---|
|
Nissan Leaf e+ 62 kWh
|
8 years or 160,000 km (whichever comes first)
|
|
Hyundai Kona Electric
|
8 years or 160,000 km
|
|
Kia Niro EV
|
7 years or 150,000 km, for its 64 kWh battery
|
|
Tesla Model S
|
8 years or 240,000 km, with 70% minimum battery capacity retention during the warranty period.
|
An electric car on a long-term leasing contract
From the point of view of maintenance, it is not necessarily advantageous to buy your electric car inLLD(long-term rental) because the vehicle requires little maintenance and stands the test of time. Even the battery, which was an unknown factor in the electric equation, has proved to be solid.
On the other hand, if you travel long distances on a regular basis and plan to use your vehicle for a long time, it's worth opting for an electric car on a full service lease.
Leasing an electric car with an option to buy (LOA)
This is the wisest option. You'll have to pay for maintenance, but given the cost of maintaining electric vehicles, it won't break the bank. At the end of your contract, you can buy the electric vehicle back. Given current forecasts, the electric vehicle will be worth a great deal on the second-hand market, and you'll make a good deal. If all the experts are wrong, you can return the vehicle to the dealer or leasing company.
Bonus: the case of vehicles with battery leasing
In this particular case, you should never buy the vehicle for cash. When you come to sell the vehicle, it will be difficult to find a buyer willing to lease a battery for life. You will then be forced to sell your vehicle in order to get rid of it and stop paying for the battery. It's also worth noting that the rental budget for your electric vehicle battery is not insignificant: it starts at €69/month for light users. Even when you're not using your car, you'll still have to pay an extra monthly instalment.
The advantage is that, as the battery is the most expensive component of the car, the initial purchase price is lower.
Is it possible to benefit from regional aid?
You may not be eligible for certain regional grants if you purchase an electric car on a long-term hire or hire-purchase (LOA). However, they will be available for cash purchase.
Le environmental bonus is deducted from the overall price of the car by the seller, you will benefit regardless of the method of financing and the leasing contract chosen.
| Aides Particuliers | Locations avec option d’achat (LOA) | Location longue durée (LLD) | Achat comptant |
|---|---|---|---|
|
South region: Bouches-du-Rhône (13)
|
✖️
|
✖️
|
✔️
|
|
Normandy Region (14) (27) (50) (61) (76)
|
✔️
|
✔️
|
✔️
|
|
The Arve Valley
|
✖️
|
✖️
|
✔️
|
| AIdes pour entreprises | Location avec option d'achat (LOA) | Location longue durée (LLD) | Achat comptant |
|---|---|---|---|
|
Île-de-France Region (75) (77) (78) (91) (92) (93) (94) (95)
|
✖️
|
✖️
|
✔️
|
Read also : Regional aid for electric cars.
For more information, we've put together a guide to this topic to explore the different aspects in depth:
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