Leasing companies overcharge EV drivers by hundreds of pounds

Drivers who lease electric vehicles (EVs) are being over charged by hundreds of pounds, a new Transport & Environment (T&E) report has found.  

In Europe, leasing offers are on average 57% more expensive for EVs compared to equivalent petrol models, according to the analysis.  

Analysts found that leasing an electric Peugeot 208 costs around €574 per month, while a petrol Peugeot 208 is offered at €371.  

Stef Cornelis, director of electric fleets at T&E said: ‘Today customers are being overcharged by leasing companies if they want to switch to a battery electric car. Leasing firms are too conservative when setting their monthly prices. Their rates reflect the state of play from 5 years ago. With this pricing strategy, their profits are obviously high and consumers are overpaying to go electric. At the same time, they are harming the BEV transition.’  

Leasing companies usually charge customers for the expected loss in value of a vehicle over three to four years lease, with higher lease prices reflecting an expectation for EVs to lose more value.  

However, this is no longer the case, as electric cars have been found to have a similar resale value as diesel and petrol vehicles. 

T&E analysis of 2.7 million used car prices show that EVs do not depreciate in value more than other cars, with depreciation rates in Europe’s biggest markets, Germany, France and the UK, being on par with petrol and diesel.  

EVs are also likely to keep more of their value over time, as consumers become more confident in newer models with improved technology. 

Consumer demand for EVs is currently at an all-time high, with new data from the International Energy Agency (IEA) showing that one in every seven cars sold globally is now electric.  

UK production has also reached record levels, with production of battery electric, plug-in hybrid and hybrid cars up by almost 50% last month compared to the year before.  

Leasing companies in Europe have an outsized role in the transition to electric cars, as they accounted for 22% of vehicle registrations in Europe in 2022. 

T&E has said none of these companies have targets to become fully electric by 2030 and current EV ambitions are too weak, as they include plug-in hybrids which emit as much as petrol and diesel cars.  

In France and Spain, the EV uptake in the leasing sector is behind other corporate fleets and even private households. The UK is an exception, as the leasing sector is leading the transition, with a 34% EV uptake.  

Cornelis added: ‘These giants of the auto world have gone unnoticed and are slipping through the cracks. Looking at their weak targets for battery electric vehicles, leasing companies are climate laggards and not green leaders. Unless they rapidly accelerate their electrification plans, we will struggle to supply a second-hand market that will make BEVs affordable to far more people and we further delay the decarbonisation of the transport sector.’  

Photo by Eren Goldman