Leasing is an attractive option for those who value flexibility, affordability, and access to the latest technology. It allows drivers to enjoy new vehicles without the long-term commitment of ownership or concerns about depreciation. Leasing is ideal for individuals who prefer lower monthly payments, regularly upgrade their vehicles, or drive predictable mileage. It also suits businesses seeking tax benefits through Business Contract Hire. Maintenance packages often included in leases reduce hassle, while the absence of resale worries appeals to many. For those transitioning to electric vehicles, leasing minimises risk, offering an affordable way to explore rapidly evolving EV technologies. Over 382,000 new electric vehicles hit the UK’s roads last year, but which EVs and in which regions?
Recent data from Leasing Options indicates that the North West of England leads the UK in electric vehicle (EV) leasing, accounting for 19% of all EV leases. London follows with 16%, and the South East ranks third at 12%. In contrast, regions such as Wales (4%) and the North East (3%) show room for growth, highlighting regional disparities in EV adoption.
The full breakdown of EV leasing by region is as follows:
- North West: 19%
- London: 16%
- South East: 12%
- Yorkshire and the Humber: 10%
- East: 9%
- South West: 8%
- East Midlands: 8%
- West Midlands: 7%
- Scotland: 5%
- Wales: 4%
- North East: 3%
In terms of vehicle popularity, the top ten most leased EV models in 2024 are:
This diverse range of models, from premium electric SUVs to sleek hatchbacks, reflects a growing consumer preference for vehicles that combine practicality, affordability and innovative design – EVs are all so clearly different from one another.
Mike Thompson, Chief Operating Officer at Leasing Options, commented on the findings:
“The UK’s EV market is growing rapidly, with more drivers exploring electric options. Whether it’s for family use or longer trips, there’s an electric vehicle for nearly every need. With charging infrastructure expanding by 37% year-on-year and grants available for home chargers, making the switch to electric has never been easier.
Leasing has become a key part of this growth, allowing more drivers to access EVs at a lower upfront cost. As the demand for EVs grows, we expect the leasing market to continue expanding, offering more choice and flexibility for consumers.
EV leasing figures are already on the rise, with significant growth seen across regions like the North West and London. More drivers are choosing to lease electric vehicles, a trend likely to continue as the range of available models increases and financial incentives make leasing more attractive.
Looking ahead, as charging networks improve and more incentives become available, we’ll see even more people turning to electric vehicles. This transition is crucial for reducing emissions and improving air quality across the UK; with continued investment, we can make sustainable driving a reality for everyone.”
Leasing in the UK: An Overview
Vehicle leasing in the UK offers consumers an alternative to purchasing, providing flexibility and access to the latest models without the commitment of ownership. The primary leasing options available include:
- Personal Contract Hire (PCH): This is a long-term rental agreement where individuals lease a vehicle for a set period and mileage. At the end of the contract, the vehicle is returned to the leasing company.
- Business Contract Hire (BCH): Similar to PCH but tailored for businesses, allowing companies to lease vehicles for employees, often with potential tax benefits.
- Personal Contract Purchase (PCP): This option involves lower monthly payments with the choice to purchase the vehicle at the end of the contract by paying a predetermined balloon payment.
Leasing can be particularly advantageous for those interested in EVs, as it mitigates concerns about depreciation and battery longevity. Additionally, leasing agreements often include maintenance packages, further reducing the hassle for consumers. The differences between each package might not be obvious to anyone who has not leased before. When comparing PCP, PCH, and BCH for a £40,000 electric car over three years, key payment structures differ significantly:
- Personal Contract Purchase (PCP): Typically, you’ll pay a deposit of 10% (£4,000) followed by monthly payments. Assuming a 5% interest rate, payments might be around £500 per month. After three years, you’d have paid £22,000 (£4,000 deposit + £18,000 in payments). To own the car, you’d need to pay the final balloon payment, often 40%-50% of the car’s value, equating to £16,000-£20,000. Without paying the balloon payment, you return the car.
- Personal Contract Hire (PCH): This leasing option requires an upfront payment of three months’ rent (£1,200 if monthly rent is £400) and fixed monthly payments. At a similar rate, you’d pay around £400 per month, totalling £15,600 (£1,200 upfront + £14,400 in payments). Ownership is not an option—you return the car at the end of the term.
- Business Contract Hire (BCH): Structurally similar to PCH but aimed at businesses, BCH offers VAT recovery benefits. For a £40,000 car with the same £400 monthly payments, a VAT-registered business can reclaim 50% of the VAT on lease payments and 100% of VAT on maintenance, reducing costs further. Over three years, assuming 20% VAT, this might lower total payments to around £13,000, depending on usage.
Money Differences After Three Years:
- PCP: Total paid £22,000; option to own requires an additional balloon payment (£16,000+).
- PCH: Total paid £15,600; no ownership option.
- BCH: Total paid ~£13,000 (with VAT reclaimed); no ownership option but lower business costs.
PCP offers ownership flexibility at a higher cost, while PCH and BCH provide lower fixed payments but no ownership rights, with BCH most cost-effective for businesses.
As the UK government continues to promote the adoption of electric vehicles through various incentives and the expansion of charging infrastructure, leasing is poised to play a significant role in facilitating this transition. Consumers are encouraged to assess their driving needs, financial situations, and the available leasing options to determine the most suitable arrangement.
