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A DEAL allows some drivers to lease electric vehicles for a shockingly low rate of $20 a month.
While the car market has been experiencing challenges, there is still hope for drivers looking for affordable options.
A lease deal for electric vehicles could save drivers hundreds of dollars per month[/caption]
Some drivers can spend as little as $20 a month on their new electric car[/caption]
Those interested in electric cars may qualify for a wallet-friendly deal within a struggling, inflation-riddled economy.
Lease payments for these vehicles are now coming at a “relative discount” due to decreased consumer demand, as well as added incentives from carmakers to help do away with battery-powered cars that they otherwise may have struggled to sell for months, per Bloomberg.
The reduced lease payments are also caused by shifts in the rules for the $7,500 electric vehicles federal tax credit which usually favors leasing over financing.
Very few models qualify for tax breaks following the Inflation Reduction Act of 2022, which immensely restricted this practice for purchases of electric cars.
Americans are leasing around 75,000 battery-powered vehicles, and many of these would not qualify for tax credits if they had purchased them instead, the outlet reported.
This is because they surpass price caps in the law, which stand at $80,000 for SUVs and trucks and $55,000 for cars.
They also are not made in the US and contain battery materials from China, and the law placed a cap on the net income of buyers applying for tax credits, per Bloomberg.
However, there was a “loophole” for electric cars marked to be leased, the publication said.
THE LEASE LOOPHOLE
The law counts leased electric vehicles as commercial vehicles, enabling them to qualify for the full credit, even if they don’t meet the requirements for federal battery and parts sourcing, according to Bloomberg.
This has allowed car companies or dealers to “bundle the $7,500 tax credit savings into the lease financing cost,” reducing customers’ monthly payments.
This money-saving loophole has proven to be highly significant for some drivers.
In July, some leases on 2025 electric Nissan Leaf models were available in Colorado for as low as $20 a month after electric vehicle tax credits and special state incentives, The Autopian reported.
That is less than the cost of a full tank of gas.
While manufacturers “technically receive the credit on leased EVs,” they’re disposed to pass it along to customers as a rebate or discount if it helps take cars off the lot, Bloomberg noted.
Electric vehicles vs gas
Pros and cons of EVs vs gasoline-powered vehicles
EV PROS:
- Convenient (when charging at home)
- Cheaper (depending on state or city)
- Cheaper maintenance, due to lack of mechanical parts
- Great for commuting
- Reduced CO2 emissions
- Federal and state tax incentives
- More performance (speed, handling – depending on the make and model)
EV CONS:
- Higher initial cost
- Higher insurance rates
- More frequent tire and brake replacement intervals
- Higher curb weight (thus causing more rapid wear on crucial parts)
- Low resale value
- High depreciation rates
- Lack of charging infrastructure
- Unreliable public charging (related: slow charging times)
- Poor winter and summer performance
- Lack of clean energy alternatives means more “dirty energy” from coal and nuclear sources
- Range anxiety
GAS PROS:
- Highly developed refueling infrastructure
- Fast refueling
- Cheaper insurance rates, depending on make, model, and configuration
- Established repair industry
- Lower initial cost
- Higher range before refueling, especially with hybrids
- Many manufacturers produce nearly emission-less engines
- Cheaper refueling, depending on the location
GAS CONS:
- Finite resource (related: heavy dependence on petroleum)
- Carbon emissions/greenhouse gases
- Higher repair costs
- Higher insurance rates, depending on make, model, and configuration
- Varying costs at the pump, depending on state, city, and county
Source: Car & Driver, Perch Energy, AutoWeek
The Koons Kia dealership in Woodbridge, Virginia, has seen this firsthand.
Finance Director Ramon Nawabi said approximately two customers a month inquire about electric vehicles, and the hefty cost sometimes diminishes their interest, per the outlet.
He has some EV6 electric SUVs that have been sitting on the lot for at least six months.
Nawabi said Kia has been offering discounted leases in addition to the $7,500 tax credit “just to move the car.”
“In a sense, we’re giving them away,” he continued, per Bloomberg.
THE ELECTRIC STRUGGLE
Electric cars have struggled to sell due to high purchasing costs.
“Between $50,000 and $60,000 now we get Kia and we get Cadillac,” said Tyson Jominy, an industry analyst with J.D. Power, referring to the Kia EV9 and Cadillac Lyriq electric cars, CNN reported.
“Those two don’t normally face each other,” he continued.
There is also a limited selection in body style for battery-powered vehicles, said Corey Cantor, an industry analyst with Bloomberg New Energy Finance, per the outlet.
Most of them are relatively pricey SUVs, and there are not many sedans or compact cars available for drivers who don’t want the SUVs.
The target consumer for electric cars is also shifting as selling more of these cars means “reaching outside a core of knowledgable EV enthusiasts,” CNN reported.
“As the COVID shock retreated, we learned that as you scale EVs to 5,000, to 7,000 units a month and you move into the early majority customer, they are not willing to pay a significant premium for EVs,” said Ford chief executive Jim Farley, per the publication.
“This is a huge moment for us.”
