New registrations of cars powered purely by electricity, or battery electric vehicles (BEV), rose 243.1% in February 2020 compared to the same month last year, with their overall market share increasing from 0.9% to 3.2% in that period.

Their growth in popularity can be attributed to drivers’ concerns about lowering their environmental impact and the UK government’s current commitment to ensuring that all new cars are zero-emission by 2040 at the latest, and that the country has net zero greenhouse gas emissions by 2050.

Here at LeaseCar.uk we have lots of electric cars for drivers to choose from, but we often get questions about the costs from motorists who haven’t drove an electric car or leased a vehicle before, or both – from fuelling it, to insurance, maintenance and other fees.

Paying an initial rental followed by monthly rentals for the length of a contract, typically two to four years, is always cheaper upfront and usually works out better value for money for drivers than buying a vehicle outright – particularly once owners factor in deprecation of its resale value.

Here is our guide to the other costs of running an electric car you’ve leased:

Fuel

Charging an electric car can be much more convenient than a traditional vehicle that motorists must regularly take to a petrol station, as well as cheaper and cleaner.

But just like filling up a petrol or diesel car, the cost of fuelling an electric car depends on the cost of the fuel – the electricity – and the size of the tank – the battery.

The average price UK homeowners pay for domestic electricity is around 14p/kWh. This means a full charge of a smaller electric car – with a 60kWh battery capacity and about a 200 mile range – would cost around £8.40. 

Meanwhile a Tesla Model S, with a 98kWh battery and a 381 mile range, would cost around £13.72.

The price of a full charge for a Jaguar I-Pace Estate (84.7kWh battery and 298 mile range) is approximately £11.86, whilst it’s £13.30 for an Audi E-Tron Estate (95kWh battery and 310 mile range). 

But the cost can of course vary depending on other factors, including what electricity tariff you’re on and when you choose to charge it. 

Electricity can be cheaper at off-peak times, such as overnight, or if you switch to another energy company – some offer incentives for electric car drivers.

You’ll also need to consider the cost of installing an electric car charger at home if you don’t already have one. 

The Electric Vehicle Homecharge Scheme (EVHS) provides grant funding from the UK government of up to 75% towards the cost of installing smart electric vehicle charge points at domestic properties across the UK.

Other charging options include at supermarkets, car parks and other public locations that offer free juice for your electric vehicle to customers or visitors.

Many large employers also now offer charge points with free or subsidised access throughout the day for workers, with rapid charge points available at UK motorway service stations for drivers on long journeys too – a typical price is £6 to £7 for around 30 minutes or 100 miles of electricity.

The average cost of unleaded petrol across the UK, as of February 2020, is roughly £1.25 per litre, with supermarkets generally a few pence cheaper and motorway services more expensive. Diesel is currently priced at around £1.28.

As a general rule, the ‘fuel economy’ is usually much better for pure electric cars than traditional petrol or diesel cars, that typically cost three or four times more per mile. 

The obvious drawback for fuelling an electric car is the time it can take to charge – though this can of course be done at night while you sleep, during the day while you work, or topped up at rapid charge points.

The time all depends on the size of the battery, the range of the car, how much power the charger can deliver and your vehicle’s maximum charge rate – a full, regular charge at home could take up to around eight hours currently. 

Insurance

If you lease an electric car, insurance probably won’t be included in the advertised, quoted price or final contractual agreement as standard – but it can be.

Drivers who opt to pay a fixed amount on top of their monthly rental for the duration of their contract don’t have to worry about rising insurance premiums every year and trying to find a good deal.

It can also help with personal budgeting and speed up repairs if your car is damaged, as the mechanic won’t have to wait for third party insurer approval.

Motorists who wish to privately insure their leased electric vehicle should be aware that third party insurance – the cheapest, minimum option which only pays out for damage to other parties in incidents where you’re to blame – are not available for leased vehicles. Third party fire and theft policies may also be unavailable.

Comprehensive insurance covers you for driving vehicles that you don’t own, such as a leased car, and includes cover for damage to the car or cars you drive, so it’s usually required as part of leasing agreements.

Insurance is typically priced higher for electric cars than equivalent petrol or diesel powered vehicles because less mechanics are qualified to work on them and parts including lithium-ion batteries are more expensive to repair or replace. 

Premiums can be up to a third higher, but it’s worth checking insurance group ratings. Any extra outlay is generally offset by other savings though, such as on the cost of fuel, whilst some insurers also offer discounts for drivers who install dash-cams or black-boxes too.

Maintenance

A lease agreement for an electric car typically won’t include the cost of repairs or replacements for things like tyres and wheels, brake pads and clutches, scratches or dents to the bodywork and new headlights – unless drivers choose to add a comprehensive maintenance package on top of their monthly fee.

Maintenance deals generally include MOTs, an annual car service and regular wear and tear for tyres – but won’t cover accidental damage or driver error.

Otherwise, UK drivers should book MOTs and services according to the manufacturer’s schedule, and other work required on their electric cars as if they owned the vehicle themselves.

Most leased cars, as they are new, are covered by the vehicle’s initial manufacturer’s warranty for the length of the agreement with the driver too. 

This means that breakdowns as a result of mechanical faults, such as engine failure, shouldn’t require the driver to fund a repair. 

Batteries on electric cars should generally be covered too, though the range of a battery will decrease over time – just like the battery on your smartphone doesn’t have as long a life after a few years.

You should typically expect the battery of an electric car to maintain at least 80% of its capacity after five years though (based on roughly 10,000 miles driving per year), so it shouldn’t be anything to worry too much about.

Drivers should fund breakdown recovery plans with companies such as the AA, RAC and Green Flag themselves as normal, if it’s not included for their car.

If you’re involved in an accident on the roads, the process when driving a leased electric car is no different to any other rented or owned vehicle – the insurer should be contacted as normal. If the car is written off, you’ll need to contact your lease funder.

Just like with petrol, diesel or hybrid vehicles, drivers who lease an electric car will also be expected to return it at the end of their contract in a condition that’s commensurate with its age and mileage.

At the end of leasing agreements, rented cars must be in a clean, safe and roadworthy condition, and are inspected for excessive damage – so drivers do have to anticipate some additional maintenance costs.

A reasonable amount of wear and tear is permitted – the British Vehicle Rental and Leasing Association has guidelines for judging what is fair, which motorists can request a copy of.

 Other fees

When you lease a car, the funding company will usually deal with the Vehicle Excise Duty (Road Tax) registration for you and include the cost in the monthly price

But with an electric car there’s no charge, as zero-emission electric vehicles are exempt from vehicle tax rates – the exception is the extra tax for a new car with a list price over £40,000.

A leasing contract will also include an agreed annual mileage allowance, which should be tailored to the amount you expect to drive.

There are therefore excess mileage charges in agreements to cover the extra use of the rented vehicle, but the price of this is always clear and upfront – it can range from 2p to 30p per mile.

For example, if a driver goes 2000 miles over their agreed limit by the end of their lease and the excess mileage rate is 10p per mile, they would have to pay an extra £200(+vat).

Electric cars are, though, completely exempt from the London Congestion Charge and the £12.50 Ultra Low Emission Zone fee, with other perks and future benefits potentially including access to bus lanes and discounted or free parking in some locations.

For clarity, a driver who leases an electric car isn’t eligible for any lump sum government grants towards its purchase price, as they’re renting rather than buying the vehicle.