Can you Get an Electric Car on Finance?
The popularity of electric cars is on the rise. With the looming diesel ban in 2030, is now the right time to switch to electric and what’s the best way to fund your EV? Many people are still under the common misconception that electric vehicles are too costly to buy outright and for many that is the case. Even with the electric vehicle government grant, buying a new electric vehicle can be costly. Car finance companies are making it more accessible for people to own and finance an electric car with affordable deals. So, can you get an electric car on finance and how can you ensure that you get the best deal possible?
1. Benefits of owning an electric car
Electric cars started becoming mainstream in the UK in 2010. Now over a decade on, their technology and efficiency are continuing to grow but what are the main benefits of owning an electric car?
– Emission free
The main advantage of owning an electric vehicle is that they are emission free. Electric vehicles are powered by an electric motor rather than fuel such as diesel or petrol.
– Less pollution
No emissions mean less pollution. Owning an electric vehicle means you are reducing the number of harmful emissions released into the environment.
– Cheaper to run
No more frequent trips to the petrol station and filling up £40 every week! The cost of electricity used to run an EV is 40% cheaper than the cost of fuelling your petrol or diesel car. You can charge your electric vehicles at many charging points across the UK or opt to have a home charging point installed.
– An enjoyable driving experience
One of the first things that many people say when they switch to electric is how quiet the vehicle is. Less noise and emissions create a much more comfortable and eco friendly drive, making an electric car a great choice for your next family car.
2. Types of electric car finance
Buying an electric car outright may not be the most realistic way to own an EV for many people. However, there are actually a few ways in which you can finance or lease an electric vehicle.
Hire purchase car finance
Hire purchase car finance is a straightforward finance deal for any type of vehicle. The cost of your electric car is divided into affordable monthly payments with a fixed interest rate. You must make all payments on time and in full till the end of the agreed term. At the end of the agreement, you will automatically become the legal owner of the car. Hire Purchase car finance deals have no mileage limitations and no additional damage charges unlike some other finance deals.
Personal Contract Purchase
Personal Contract Purchase tends to be the cheaper options for lower monthly payments on used cars and new cars which can be a great incentive for people who want to own an electric car.
Personal Contract Purchase agreements are calculated based on length of finance term and annual mileage. At the end of the finance agreement, you have three options, you can return the car to the dealer, keep the car and pay the balloon payment or use the value of the car on a newer vehicle. If you are returning your electric vehicle or part exchanging it, you need to keep the car in good condition and within the mileage limit. If not, you could pay additional charges to the finance company.
Electric car leasing
Leasing your electric car is similar to a Hire Purchase deal. Leasing usually involves low monthly payments and a balloon payment at the end of the deal based on the age and mileage of your electric vehicle. Once the balloon payment has been made, you are the automatic owner of the car.
3. Electric car government grants
In the UK, the government offers a sum of money towards the cost of a new electric or low emissions vehicle. The plug in car grant incentive helps people in the UK afford an electric vehicle and helps the country to achieve its target for cutting down harmful emissions. You can also use the government grant with a finance deal. The dealer will include the grant in the vehicle price and then you can choose the best finance agreement for your circumstances.