Why is leasing so expensive?

Hodders

Hodders

Hodders

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Our existing car is now 8 years old and we are thinking of changing it.

We normally buy a car about 12-18 months old, but like the idea of going EV.

Looking at buying/leasing:

Kia EV6 air - 10k annual mileage, 4 year lease. £6220 down payment, £518pm = 31k over the 4 years and then you give it back.

Kia EV6 air - May 2022 with 15,000 miles on it - £35k (plus haggle room), you then own it.

Why would anybody lease? Am I missing something?
 
Hodders said:
Looking at buying/leasing:

Kia EV6 air - 10k annual mileage, 4 year lease. £6220 down payment, £518pm = 31k over the 4 years and then you give it back.

Kia EV6 air - May 2022 with 15,000 miles on it - £35k (plus haggle room), you then own it.
Click to expand...

You've just answered your own question.

This car is almost £50,000 new and a May 2022 is already just £35k to buy. So it's lost what, £15k at least in its first year.

When you are leasing, you are paying for the depreciation on a brand new car, the cost of finance, the operating costs of the lease firm and some profit as well.

Why would you expect leasing a highly depreciating car to be low cost?
 
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Now we are out of the car shortage, most EV's have rough depreciation which is priced into the lease.
Defo not a great deal to lease right now.

We had a deal though the work car scheme.... in stock ID4's with the 80 ish kWH battery for £420 / month net. 10k/yr 4 years (salary sacrifice) which was ~ £20k.
That's was actually a very good deal, probably as the ID4 isn't that popular.

I'd still rather buy a Mazda 3 petrol for £25k and drive it for 10 years.
10 years motoring in an EV would cost near double.

It's actually cheaper to buy the Mazda and all the fuel for 100,000k than to just lease the ID4 at the discounted rate.
 
Seems like absolutely crazy money to me.

Admittedly this is about 15 ish years ago but I bought a Mitsubishi lancer 1.6 petrol with 30k miles on at an auction for £2200.

I had that car 11-12 years it had over 100k on the clock, and sold it for £400 cash.

You do the monthly cost on that.

Even my current car, ok spent £8k on it, had it 4 years now and it doesn't even have 50k on it yet, hopefully will do another 10 years.
 
I think the increase in car values is also causing me to be shocked.

8 years ago we bought a 12 month old top spec Hyundai i40 with 12k on it for about £13,000.

Given the current falling car prices it seems waiting is the best option at the moment.
 
Pricing is all over the place. I sense a problem coming in the market as manufacturers have to up their quota of EV next year. Last year you could get a Mokka EV for c£30k. It's now £38k for the same car. I'm an advocate for cleaner motoring but the cost differential is too high. A future government is going to have to reinstate the fossil fuel price escalator if people are to be persuaded to switch to EV but obviusly that will be political suicide in the current economic climate.
Anyway back to the OP. £50k for a KIA? No thanks
If you can wait until next year you will find more competitive offers on EVs.
 
I wouldn't get an EV right now. Hasn't depreciation been absolutely savage the past 6 months for pretty much all EV models, from nearly new Teslas to like 6 years old Leaf/I3's? That's probably factored into the lease costs - they won't have a clue what the residual value will be.
 
it's about the cost of ownership - think the misconception is the price the lease companies were paying for evs, actually << rrp
if you believe this is a £50K car then £31K ownership over 4years, and a residual of £19K for lease company doesn't sound greedy,
but the manufacturer knowing most of these are sold into the lucrative fleet/bik subsidised market is selling them to the leasing company at somewhat less giving them a better return,
but with additional supply & stalling demand for ev's that's now beeing rationalised with rrp drops


Hodders said:
Kia EV6 air - 10k annual mileage, 4 year lease. £6220 down payment, £518pm = 31k over the 4 years and then you give it back.
Click to expand...
is that with maintenance ? also, seems that Kia like MG, warranty infotainment for 3 years so could have to make additional arrangements in a lease.
 
Tom_ed1987 said:
That's probably factored into the lease costs - they won't have a clue what the residual value will be.
Click to expand...

I dunno if you remember a while back Lombard (might have been familiar with Lombard Direct?) used to do private car leasing and apparently got this wrong on a big scale and made huge losses.

My in laws lease an electric car and I can understand why they do it, they didn't want to risk the potential depreciation on an EV, although I think we better understand them now they were worried about battery life etc, combined with improvements in tech making older EVs less desirable faster.

The other thing is the state of our economy right now will have a factor, if you have ex-lease cars you are trying to shift, well people can't afford to be spending £25k cash on a used EV.
 
Hodders said:
Why would anybody lease? Am I missing something?
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  • They want a brand new car
  • They lack the capital to buy a car of equivalent cage/spec outright
  • They aren't fussy about what car they get and shop around for a 'bargain' lease (these seem to have dried up in recent times however, probably because there is no longer a surplus of stock they want to feed into the used market like there was for some models pre-pandemic)
 
Tom_ed1987 said:
I wouldn't get an EV right now. Hasn't depreciation been absolutely savage the past 6 months for pretty much all EV models, from nearly new Teslas to like 6 years old Leaf/I3's? That's probably factored into the lease costs - they won't have a clue what the residual value will be.
Click to expand...

Savage is an understatement.

Take a look at this Ioniq 5. Top spec is about 60k new.

Less than a year old for 33k. That is crazy depreciation. How do they expect anyone to buy an EV brand new.

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EVs have kind of inflated list prices because there used to be government grants meaning that the end user wouldn't actually pay the list price. So a few grand of the deprecation was always going to be there simply because the first owner was getting a handout.
 
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