Buying an EV 

There’s no mystery when it comes to buying a car - whether new or used. It’s the simplest process of the three, especially If you’ve already got the cash on hand. If you don’t, then you’ll be taking out a loan and paying it back over time with interest. 

While buying an EV, like an ICE car, is the only way to truly “own” your vehicle to do with as you please - there’s a caveat: certain manufacturers retain ownership of the car’s software and can update it’s features and/or pricing as they please. If you want your car to include the full set of luxury features, you might be paying an additional subscription fee. It’s a nagging caveat that some DIY communities offer work-arounds for, but, usually, the most reliable EV ownership experience involves paying the extra software subscription fee for the features you want. 

Pros of Buying 

Buying an EV outright makes ownership very simple. You own the vehicle, period. There’s no need to fret over the mileage limits that come with leases or car subscription services - drive for as far as you want, as often as you want. Nor do you need to worry about eventually returning your car to a dealership or start-up in “ good as new” condition. How well-kept and maintained your EV is will be entirely at your discretion. Also, compared to lease term-agreements, early termination of an ownership agreement generally incurs much less in the way of fees and penalties. Whatever money you make selling the vehicle can be put towards paying back your loan. 

Speaking of loans, in general, loan approval to buy a car is less strict than for lease approval, so if your credit isn’t stellar it might be easier for you to get approved for a loan than a lease. Finally, if you’re a “gear”-head (or motor-head, or coder), then owning grants you full freedom to tinker and customize your EV (and its software) to your heart's content - a freedom not granted with leases or car subscription services that will require the car returned in the same condition it was initially lent. 

Downsides of Buying

First and foremost, buying is pricier, at least initially. Between down payments, registration, and monthly payments that go towards the entire purchase price of the car, you’re laying out more money at the offset. Generally, in order for buying an EV to be worth it, you need to hold on to the car for the long-term. If you only plan to keep the car for a few years, it might not be much more expensive to lease it.

However, a long-term commitment to a particular EV can be a tricky thing in a world where technology is rapidly progressing. With an ICE car, you’re owning an asset whose value is depreciating in a fairly predictable way. With an EV, that depreciation could prove to be quicker and more drastic depending on make and model - and how you care for it. If you own your car, you will want to be more cautious about battery health, since that is rapidly becoming a factor that influences resale values. 

Another thing that could affect longer-term resale values is that car ownership itself is changing to meet the needs of modern drivers. With more and more people moving to cities where public transit might be a more viable and cost effective option, full-time car ownership might not be as desirable as, say, car sharing or a subscription service that provides short-term access to a car when needed. 

New vs. Used and the EV Tax Credit

The new versus used decision has a few more wrinkles with EVs when compared to ICEs. While a five to ten year old ICE can work as well, comparatively, as a new ICE - think about the capabilities of a 2 to 3 year old EV compared to the models now being released. The decision to buy a new or used EV is about balancing the difference in EV technology with the difference in price - a price which, until recently, had skyrocketed and is only now returning to earth.  

Finally, there’s the EV tax credit. As of 2023, the EV tax credit is newly applicable to used EVs as well as new - a previously problematic detail that has been remedied as of January 2023. The tax credit for used EVs is capped at $4,000 (or 30% of the used car’s total selling cost) as opposed to $7,500 for a new EV. So while a used EV might cost less upfront, it’s worth taking into account the potential difference in applicable tax credit. 

Read more about the new and used tax credit requirements.

Leasing an EV

Technically, you don’t “own” a leased vehicle; rather, you’re “borrowing” it from a company that does. Your monthly lease payments pay for the cost of the vehicle’s depreciating value over the length of a lease agreement plus interest, other fees, taxes, etc. At the end of a lease term you’ll either purchase the vehicle outright, or return it to the owning company. 

Pros of Leasing

In general, leasing is ideal if you want sole access to one specific EV for a few years. Leasing an EV usually comes with lower monthly payments than owning as you'll only be covering the costs above, which are usually much less than the full purchase price. A short-term commitment to a specific EV could also prove beneficial given the rapidly growing selection of EVs and continual influx of new and improved EV technology. By the time new technology comes out, you can trade in your EV for a newer model. You also don't have to be overly concerned about how you treat your EV battery if you lease, since the minimum warranty of eight years should long outlast any lease term.

Also, some leasing companies will subtract some, or all, of the value of their EV tax credit from your monthly lease payments. 

Downsides of Leasing

While leasing usually makes more sense than buying for a few years, if you’re looking for more of a long-term commitment, no commitment, or to own your EV as an asset, then leasing probably isn’t for you. Compared to owning, leasing a car will become more expensive than owning after a certain length of time. And, just as some leasing companies will take the EV tax credit into account with your monthly payments, some may not. Since the car isn’t technically yours, you won’t be able to customize or modify it to your liking and you’ll be subject to things like mileage limits, return fees based on the condition of the car, and a more demanding approval process (aka your credit score) than simply taking out a loan. Not to mention trying to get out of a lease agreement prematurely can come with some nasty charges and fees. 

EV Car Subscription Services

Think of a car subscription service like your favorite streaming service: you pay a monthly fee for access to a car (or cars) when you need one. When you don’t need a car, you don’t pay for one. The subscription service is a new way of “owning” a car that’s beginning to gain some traction and offers some very intriguing and promising services. That said, being so new, the market - and service in general - is still just beginning to define itself. But that doesn’t mean there aren’t some great options out there for interested potential EV owners.

Pros of Subscription Services

The key when it comes to the idea of a car subscription service is “flexibility”. With more and more people moving to cities and metro-areas where public transportation is more readily accessible, the explosion of car-sharing services like Uber and Lyft, and fewer people needing to buy or lease a car, subscription services aim to fill the gap in the marketplace between car-sharing and long-term rentals or leasing. 

There’s also a good amount of options to choose from. With a market as new and promising as the car subscription service, it seems like everyone is throwing their hat in the ring. Popular car rental companies like Enterprise, Avis, and Hertz offer their own takes on a subscription service. There are also more niche rental companies like SIXT, which offers SIXT+, a take on a car subscription service which includes the Tesla 3 and is available in most major American cities. Kyte and Turo are other popular rental companies with EV options. Some startups are focused solely on the car subscription model, such as Steer EV - an exclusively EV car subscription service  available to residents of Austin, St. Petersburg, FL, and the Washington D.C. metro area. FINN is another car subscription service, servicing the eastern seaboard from Virginia up through Maine. Even some local dealerships and car manufacturers offer subscriptions: Volvo (Care by Volvo), Porsche (Porsche Drive), Hyundai (the EV-only Evolve+), Audi (Audi On-Demand), and Jaguar/Land Rover (Own. Subscribe. Rent) are a few. If flexibility and convenience without the burden of having a car full-time sounds like a fit, then a subscription service could be right for you. 

With the newness of this ownership model also comes variety - there are a lot of different types of subscription services out there. Some operate more like car rental services - paying when, and only when you’ve “subscribed” to a specific car, while some operate more like the before-mentioned streaming services - paying a monthly fee for access to a fleet of models to switch between. This means, odds are, there’s a service out there that can fit your specific needs. Also, being so new, there are a lot of EV options out there. Just about every service includes EV vehicles, while quite a few focus solely on EV. 

Downsides of Subscription Services

If “new” is a strength for subscription services, it’s also their biggest weakness. There have been growing pains for the subscription service market and the pandemic did its part in disrupting the industry’s initial momentum. It’s also not a coincidence that the subscription services that have stuck around are usually based in big cities. This model of car ownership is a hard sell for car-centric areas where full-time access to a car is almost a must. Subscribing also comes with many of the “cons” of leasing - you don’t actually own the car, you’re borrowing it. This includes mileage limits, limited areas of service, and the added pressure of returning the car in the state you received it. 

If luxury isn’t your priority, then the cost effective sweet spot seems to be paying for a subscribed car for things like weekend trips or moving, when the hassle of renting a car isn’t worth it, but you also don’t want to be constantly calling ride-sharing services.

If you imagine needing a car more often than that, then leasing or owning might be better. 

Conclusion

The good news is that, whichever option is right for you, the market for EVs is growing - that means more variety, improved technology, larger inventory, and more opportunity to have your very own EV.  If you live in a city and don’t imagine needing your EV on a daily basis then subscription services offer some very intriguing options. If you imagine needing your EV 24/7 then owning or leasing is probably for you. 

It’s a little more complicated to decide between owning and leasing an EV. Like with ICEs, if you’ve found a model you’re in love with and want to keep it for a good amount of time then owning might be the right option. But, unique to the EV marketplace, the possibility of tech soon becoming obsolete or disadvantaged is very real. The long-term commitment of an EV might be riskier than buying an ICE car, but the consequences aren’t deal-breakers if being cutting edge isn’t a priority. 

At the end of the day, variety is a good problem to have.

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Miles Orduña is a New York City-based writer, artist, and life-long technophile.