- Fisker customers are concerned about the impact a potential bankruptcy could have on service needs.
- Some Fisker owners probably would have preferred to lease rather than buy.
- There are several reasons to consider leasing an EV rather than buying.
Fisker said it could cease operations by the end of the year.
As it searches for a lifeline, owners of its vehicles are desperately wondering what will happen if they miss future technology updates and service needs.
Some Fisker owners who purchased their vehicle outright may now wish to lease it instead.
Certainly, the vast majority of electric vehicle owners do not have to worry about the imminent bankruptcy of their vehicle manufacturer. But Fisker’s problems highlight some of the advantages of leasing over buying, particularly in the electric vehicle market, which has limited data on used market prices and little information on long-term battery degradation.
Leasing is often avoided by financial advisors, but here’s why it might make more sense for EV buyers today:
Batteries are getting better
Battery technology will only improve in terms of overall range, as well as charging speed and longevity.
The average range of an electric vehicle was less than 200 miles in 2010, but it is now closer to 350, according to the International Energy Agency.
Charging ports are also evolving as the industry transitions to the North American charging standard, pioneered by Tesla. (That said, adapters can help you keep up with any charging port changes).
Used EV prices are a huge question mark
Data on resale prices for electric vehicles is limited.
Prices of used electric vehicles have fallen at the same rate as prices of new electric vehicles. The average used electric vehicle sold for about $23,787 in February 2024, up from more than $32,000 a year ago, according to Recurrent data. Some models, like the Tesla Model Y, fell even further. Compared to gasoline cars, electric vehicles tend to lose value much more quickly, according to an iSeeCars study looking at 5-year depreciation.
Many newer electric vehicle models do not have enough used options on the market to accurately estimate their value.
Electric vehicle rental is growing in popularity
Renting an electric vehicle is no longer a niche concept. About 27% of all electric vehicles were leased in the first months of 2024, more than double the previous year, according to data from Cox Automotive. Many leases can also benefit from the $7,500 tax credit.
Leases can often cost less than a loan, but you get no equity. The average monthly loan was around $744 in March, according to Cox, while leases can be found as low as $500, according to data compiled by Electrek.
Of course, there are mileage limits and other leasing limitations, but some electric vehicle makers are trying to rethink vehicle ownership. Polestar launched a “flexible lease” program last year with a five-month early opt-out with no cancellation fee, and Hyundai’s “evolve+” subscription program includes 1,000 miles per month and no long-term commitment.
“Ultimately, leasing is a great solution for customers who want to try it, who might be afraid of some residual value parts,” GM Chief Financial Officer Paul Jacobson told investors in 2022. Leasing is going to be a very valuable tool for electric vehicles.
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