Should I buy or lease an EV?

This is a choice all car buyers must face. Leasing an EV is more common and may be a good option for a first-time EV owner, as it is a lower risk and lower cost option. Some owners are choosing to purchase their EV outright, citing growing confidence in the technology as it continues to mature.

One factor to consider when choosing between a lease and a purchase is whether you can take full advantage of the federal $7500 tax credit should you choose to purchase. If you are leasing the vehicle, the tax credit goes to the manufacturer that's offering the lease, not you. The carmaker will likely factor the credit into the cost of the lease to lower your monthly payment, but it isn't mandatory.

If you are purchasing the vehicle, you need to be able to take the full $7500 credit in the same tax year in which you purchase the vehicle. In other words, if you are going to be paying $7500 or more in federal income taxes, a purchase is a good option. If your income is insufficient to allow you to take full advantage of the $7,500 credit, a lease becomes more attractive.

Remaining battery life is often a concern when purchasing a used EV.  Most EVs feature a battery warranty (often 8 years/100k miles) when purchased new, and that coverage may be transferrable, depending on the manufacturer.  Some automakers only cover an EV’s battery pack against total failure, while others will replace it if it reaches a specified reduced capacity percentage, usually 60-70%, while under warranty.