Can You Lease an Electric Car in Canada? Yes, but Should You?

Posted on October 24, 2022

Electric cars are getting more and more popular every day, and you may be thinking about hopping on the train, however one of the biggest barriers to getting into EV’s is their increased cost. If that's your situation then there may still be a compromise you can reach, in this article we’re going to talk about leasing electric cars and how it could be the key to getting you one faster. 

What Is Leasing?

Before we get into how EV’s may benefit from being leased instead of bought, let’s go over what leasing actually is. It’s most helpful to view a leaser closer to a rental than it is a purchase as it’s sort of a merger of the two. You make monthly payments that allow you to drive the car, however at the end of the lease agreement, unlike with a usual purchase you don’t own the car, instead you have the options of trading in for a new lease or purchasing the car for its full remaining value. 

With a lease what you’re technically paying is the depreciating value of the car, so as it’s value goes down you’re paying the difference back to the dealership. 

Benefits of Leasing an EV

There are a few reasons you may want to lease an electric car but by far the biggest is that lease payments are much cheaper than loan payments for the equivalent car, which means that leasing may enable you to start driving an electric car when otherwise you may not be able to afford one. 

Combine that with the much cheaper running costs of electric cars, since you don’t have to pay for fuel, and you could see significant savings by leasing a regular car vs purchasing a regular car with a loan. 

A common negative of leases is that they have strict mileage limits that when you go over incur harsh fees, however that can actually be mitigated by an EV since with battery life to consider, your mileage limitations are part of what you’ll be dealing with anyway. 

Negatives of Leasing an EV

The biggest negative is of course the negative that comes with any lease agreement, that being that at the end of it you don’t own the car. You can buy it at the end but of course it will still be as costly as electric cars usually are. Lease agreements also generally don’t qualify for Federal tax incentives that are usually offered on purchases of electric cars. 

Leasing isn’t for everyone, but in the right situation and if you’re really eager to switch to electric then it may just be the right path for you.

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