EV Microleases Don't Look Like They're A Very Good Deal
Automakers and some startups are hoping to win over buyers who might want to consider an EV but don’t want to be locked into a long term purchase by introducing microleases. These terms, often for a year or less, are being billed as a way to get people to try EVs or as a stopgap measure — and while they may seem like a great idea on the surface, the numbers tell a different story.
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Polestar is one of the first automakers to offer a microlease. Called the Polestar Flexible Lease, it’s described as giving customers flexibility with their vehicle options, as head of Polestar North American Gregor Hembrough explained:
These new terms allow U.S. customers to lease a Polestar vehicle with the flexibility not normally permitted by a traditional lease, making it a great option for customers who are new to EVs or those looking to bridge the gap as they await a Polestar 2, Polestar 3 or Polestar 4 on order.
The lease has been described as something a buyer can get for as little as five months. Except that’s not quite the case. Heading to Polestar’s site and choosing the flexible lease option on a preconfigured Polestar 2 gives you the numbers. In order to choose the flexible lease option, you have to choose a 24-month term. This is the distinction: this flexible lease is just a standard lease that gives you the option to get out of it after five months and five payments.
Screenshot: Polestar
And it might be a bit pricey depending on which Polestar 2 you choose. Using the example of a Polestar 2 with a purchase price of $60,150, you’d have to part with $7,383 at signing to get a monthly payment of $498. And this is if you hardly drive the thing with an annual mileage cap of just 7,500 miles.
Screenshot: Polestar
Things get a bit better if you choose a cheaper 2, say one with a price of $51,300. You’d still have to hardly drive it with 7,500 miles, but the monthly payment would be just $308 after you come up with $5,308 due at signing.
AutoNation, one of the largest dealer groups in the country, offers a mico-lease as well called AutoNation Mobility. The dealer group launched it in response to subscriptions with one of their executives saying that “The three-year lease doesn’t work for everybody.” The micro-leases are offered in six or 12 month terms with mileage limits of 800 to 1,200 miles a month. Their pricing might not work for everyone.
Screenshot: AutoNation Mobility
While the AutoNation microleases aren’t just offered on EVs, the pricing isn’t that great across the board. Take one of the cheapest EVs you can buy new on the market, the Chevy Bolt EUV. AutoNation Mobility has one listed for $29,045. If you went for a six month term with 800 miles/month, you’d have to put just $2,500 down but you’d have to part with $777 a month, or $837 if you went with 1,200 miles/month. The same comparably equipped Bolt EUV lease through Chevy would come out to $452.45 per month for 48 months with 10,000 annual miles and $4,337 due at signing. The only way to get the AutoNation lease to a similar payment would be to put down another $1,500 on a 12-month term for $459/month.
Screenshot: AutoNation Mobility
It gets more glaring with more expensive EVs. Take a Ford Mustang Mach-E GT the company has listed in Southern California. AutoNation Mobility has it priced at $62,535. At Ford, you could get the same comparably equipped Mach-E on a 36-month lease with 10,500 annual miles and $6,318 down for $541/month. With nearly the same down payment at AutoNation ($6,000), a 12-month term and 1,200 miles/month, your payment would be $1,069/month. You’d have to put $12,000 down to get the AutoNation payment close to what the Ford lease is.
Keep in mind, these high payments at AutoNation Mobility don’t include any insurance coverage, either. Outside of the short lease term, you just get maintenance covered, the manufacturer’s warranty, 24/7 roadside assistance, vehicle registration, and express service at the dealer. These things should be included anyway and aren’t appealing enough to justify a payment that much higher over the manufacturer.
And what of actual vehicle subscriptions — that are nearly microleases themselves — that offer EVs? They’re either only available in certain regions, just as pricey as AutoNation or a combo of both. There’s an EV subscription service called Motor that seems to have low monthly payments, but it’s only available in Indianapolis, and to get any info about what cars they actually offer, you have to give them your email and zip code.
The founder of TruCar started a subscription service called Autonomy in late 2022, but it’s pricey and only offers subscriptions on Tesla Model 3s. Another company called Finn offers subscriptions but they don’t seem to have any EVs, at least in my area. Care By Volvo was once a thing, but the company has stopped offering it in seven different states, including California where franchise dealers killed it because they saw it as a threat to their business model; buyers in New York and California can get something similar but only through Volvo dealers and insurance isn’t included.
Hyundai announced an Evolve+ subscription service for its EVs at the Chicago Auto Show in early 2023. However the company has mostly been silent about it, and it’s only available in certain areas; the nearest EVs available to me for instance are two Ioniq 5s in Bakersfield, one of which costs $1,000 for a 28 day term.
If any of these options appeal to you, especially for the short terms that these companies seem to be selling people on, good on you. Especially for being able to afford it. For everyone else who is curious, just know that you’ll definitely be paying more for the convenience and option of having a short lease term or ending a lease early.
