Best way to fund a new EV
Discussion
Seems like lots of people have e-trons etc as normal person cars. But when I went to Audi for a PCP quote on one, it was like £1100 per month. Totally unreasonable money for a pretty dull family crossover.
I suspect PCP may not be the way to go. I’ve heard about supposed tax benefits of having an EV.
What is the best way to fund one? Doesn’t have to be an etron. Leasing? Loan? Does it make a difference to if you’re a public or private sector worker?
I suspect PCP may not be the way to go. I’ve heard about supposed tax benefits of having an EV.
What is the best way to fund one? Doesn’t have to be an etron. Leasing? Loan? Does it make a difference to if you’re a public or private sector worker?
I would imagine most EVs are tax breaks for those with company cars or salary sacrifice schemes. I’ve looked into our scheme at work and the costs are “ok”, not great, but notably better than you are seeing for PCP. Of course this is still essentially a lease, so you’ll never have anything to show for it.
My Model 3 Performance is owned outright, rightly or wrongly.
My Model 3 Performance is owned outright, rightly or wrongly.
A lot of the e-trons you see out there will originate from the first half of 2020 when there were some lease deals that made them very compelling.
e.g. my own car (a 55 with some options) P11d value £76k was £585 on a 6+36 15k/year contract, now that would be double
I seem to recall the lower output 50 model when it came out was commonly leasing at £350 a month on typical deals.
These were gross figures not the net of tax monthlies now commonly advertised, so they were seriously cheap after tax relief is factored in.
There is a huge tax saving to be realised if you can obtain one as a company car either as an employee of a relevant scheme or a business owner
e.g. my own car (a 55 with some options) P11d value £76k was £585 on a 6+36 15k/year contract, now that would be double
I seem to recall the lower output 50 model when it came out was commonly leasing at £350 a month on typical deals.
These were gross figures not the net of tax monthlies now commonly advertised, so they were seriously cheap after tax relief is factored in.
There is a huge tax saving to be realised if you can obtain one as a company car either as an employee of a relevant scheme or a business owner
Yeah, the market has completely changed.
At the same time the residuals are now holding up much more strongly, like everything else, so the lease deals are extortionate.
Here's a real-life example I just found in my email from early 2020, which may explain why you see so many "£1100/month" cars on the road
Car details:
Make: Audi
Model: e-tron
Derivative: 230kW 50 Quattro71kWh Technik 5dr Auto
Type: Personal Lease
Monthly Price: £391.26 inc VAT
Deposit: £3,521.30 inc VAT
Admin Fee: £234.00 inc VAT
Term: 24 months
Annual Mileage: 5,000
At the same time the residuals are now holding up much more strongly, like everything else, so the lease deals are extortionate.
Here's a real-life example I just found in my email from early 2020, which may explain why you see so many "£1100/month" cars on the road
Car details:
Make: Audi
Model: e-tron
Derivative: 230kW 50 Quattro71kWh Technik 5dr Auto
Type: Personal Lease
Monthly Price: £391.26 inc VAT
Deposit: £3,521.30 inc VAT
Admin Fee: £234.00 inc VAT
Term: 24 months
Annual Mileage: 5,000
theboss said:
Yeah, the market has completely changed.
At the same time the residuals are now holding up much more strongly, like everything else, so the lease deals are extortionate.
Here's a real-life example I just found in my email from early 2020, which may explain why you see so many "£1100/month" cars on the road
Car details:
Make: Audi
Model: e-tron
Derivative: 230kW 50 Quattro71kWh Technik 5dr Auto
Type: Personal Lease
Monthly Price: £391.26 inc VAT
Deposit: £3,521.30 inc VAT
Admin Fee: £234.00 inc VAT
Term: 24 months
Annual Mileage: 5,000
Jaguar did the same thing with the iPace, offering the very base spec model for cheap on a short term, low mileage contract. The deal above was OK if it suited you but excess mileage charges were high from memory and it was still costng £1.30 per mile before insurance, charging etc.At the same time the residuals are now holding up much more strongly, like everything else, so the lease deals are extortionate.
Here's a real-life example I just found in my email from early 2020, which may explain why you see so many "£1100/month" cars on the road
Car details:
Make: Audi
Model: e-tron
Derivative: 230kW 50 Quattro71kWh Technik 5dr Auto
Type: Personal Lease
Monthly Price: £391.26 inc VAT
Deposit: £3,521.30 inc VAT
Admin Fee: £234.00 inc VAT
Term: 24 months
Annual Mileage: 5,000
Completely agree on the market changing though. Back in 2019 we paid £799 a month for a Model 3 Performance, which included 12k miles, insurance, charging, maintenance and a 1 month contract commitment via on.to and kept it on those terms until late 2021. For the last 12 months they've been asking £1299 for a Model 3 LR with only 9600 miles per year.
Lease Co's now have to pay higher interest rates.
Plus the £ has fallen.
If a car is £60k ,then what do we expect it to cost? A grand a month to pay for it over 5 years?
I think we may need to re-visit the idea of expecting ordinary people to have a car on the drive with a price well above the median salary.
It's going to be a shock for a lot of people when their current deals run out, on top of everything else like energy and mortgages.
Plus the £ has fallen.
If a car is £60k ,then what do we expect it to cost? A grand a month to pay for it over 5 years?
I think we may need to re-visit the idea of expecting ordinary people to have a car on the drive with a price well above the median salary.
It's going to be a shock for a lot of people when their current deals run out, on top of everything else like energy and mortgages.
OutInTheShed said:
Lease Co's now have to pay higher interest rates.
Plus the £ has fallen.
If a car is £60k ,then what do we expect it to cost? A grand a month to pay for it over 5 years?
I think we may need to re-visit the idea of expecting ordinary people to have a car on the drive with a price well above the median salary.
It's going to be a shock for a lot of people when their current deals run out, on top of everything else like energy and mortgages.
Prices jumped massively 12-18 months ago. Nothing to do with the pound or interest rates as far as I can tell, gouging significantly more profit off company car users who don't notice due to tax savings has been the reason. Plus the £ has fallen.
If a car is £60k ,then what do we expect it to cost? A grand a month to pay for it over 5 years?
I think we may need to re-visit the idea of expecting ordinary people to have a car on the drive with a price well above the median salary.
It's going to be a shock for a lot of people when their current deals run out, on top of everything else like energy and mortgages.
You aren't buying the car for that grand a month, you're renting it. Even with a PCP the final payment has to be considered, all about ridicuously low GFV's that remove all risk from the finance companies at present and if you choose not to buy the car at the end of the term they're rubing their hands together.
SWoll said:
Prices jumped massively 12-18 months ago. Nothing to do with the pound or interest rates as far as I can tell, gouging significantly more profit off company car users who don't notice due to tax savings has been the reason.
You aren't buying the car for that grand a month, you're renting it. Even with a PCP the final payment has to be considered, all about ridicuously low GFV's that remove all risk from the finance companies at present and if you choose not to buy the car at the end of the term they're rubing their hands together.
The company car tax thing is a big part of it for sure, it boosts what the market will bear, at the level of number of cars they can supply and are keen to shift.You aren't buying the car for that grand a month, you're renting it. Even with a PCP the final payment has to be considered, all about ridicuously low GFV's that remove all risk from the finance companies at present and if you choose not to buy the car at the end of the term they're rubing their hands together.
But to what extent is that just a UK thing?
The pound has lost 20% against the USD over the last year.
How have car prices and lease monthlies changed in euroland?
What other countries have convoluted bribes for EVs and how are prices changing there?
For sure you are only renting the car, that doesn't change things much because the car is depreciating.
The consumer has to pay for the fact that cars in general lose value.
You can process that in various ways and you can vary who carries how much of the risk of it devaluing more or less over time, but none of that changes the concept that the car has to be paid for and its value written down to 'not much' over its useful life.
If there is an intermediary in the scheme, like a lease co, then they will be finding the capital and higher interest rates mean that costs more.
But I don'tthink the retail cash price is what matters on the whole.
The Audi is more a lump of white goods which the market values at £xxx per month in the UK and euro yyy over there and $zzz in the US&A.
It's not really about the factory gate price of cranking out another hatchback, it's about making the most cash in the long run by selling so many at high 'retail' prices and leasing/pcping/renting/HP-ing /hiring the optimum number across all markets in a way that locks in returning customers.
I feel that in recent years, the 'retail price' has been largely a made up number to make the monthly look good.
paradigital said:
I would imagine most EVs are tax breaks for those with company cars or salary sacrifice schemes. I’ve looked into our scheme at work and the costs are “ok”, not great, but notably better than you are seeing for PCP. Of course this is still essentially a lease, so you’ll never have anything to show for it.
My Model 3 Performance is owned outright, rightly or wrongly.
This.My Model 3 Performance is owned outright, rightly or wrongly.
That £700 a month EV you've had your eye on will cost the average business owner around half that after saving 50% vat saving, 19% Corp tax, and not having to have paid at least 20% in tax and 13.25% national insurance that you as an individual funding out of post tax income would have paid.
I decided against buying outright as its 19% Corp tax now, but in 3 years time it could well be 25% when I come to sell, as well as far more expensive BIK with a Change in govt.
In 3 years time the market will be flooded with EVs, esp if bik hits double figures for certain models.
I was wondering this too. I’m slightly over half way through a 3 year lease on a Renault Zoe ze50 r135 which I pay £202/month for on a 1+35 deal. It was a prereg deal which I jumped at as I’d been looking at Zoe’s anyway at around £250/month on 3+35 deals.
A Zoe now is around £400-430/month on an equivalent deal. The new E Megane or Kia ev6 ~£650.
No option to get an EV through work with my current employer so thinking we’ll either buy a second hand EV such as our Zoe or we’ll get a cheap runaround and focus on overpaying the mortgage instead of committing to an expensive car.
A Zoe now is around £400-430/month on an equivalent deal. The new E Megane or Kia ev6 ~£650.
No option to get an EV through work with my current employer so thinking we’ll either buy a second hand EV such as our Zoe or we’ll get a cheap runaround and focus on overpaying the mortgage instead of committing to an expensive car.
Europa Jon said:
Best way: save up until you can afford it.
If you’re a simpleton with a 1970’s approach to personal finances, then you’d be quite right! Fortunately there’s much better ways to do it these days. But it requires you to get over the idea that credit is bad, and stuffing money into your mattress is good.
OutInTheShed said:
SWoll said:
Prices jumped massively 12-18 months ago. Nothing to do with the pound or interest rates as far as I can tell, gouging significantly more profit off company car users who don't notice due to tax savings has been the reason.
You aren't buying the car for that grand a month, you're renting it. Even with a PCP the final payment has to be considered, all about ridicuously low GFV's that remove all risk from the finance companies at present and if you choose not to buy the car at the end of the term they're rubing their hands together.
The company car tax thing is a big part of it for sure, it boosts what the market will bear, at the level of number of cars they can supply and are keen to shift.You aren't buying the car for that grand a month, you're renting it. Even with a PCP the final payment has to be considered, all about ridicuously low GFV's that remove all risk from the finance companies at present and if you choose not to buy the car at the end of the term they're rubing their hands together.
But to what extent is that just a UK thing?
The pound has lost 20% against the USD over the last year.
How have car prices and lease monthlies changed in euroland?
What other countries have convoluted bribes for EVs and how are prices changing there?
For sure you are only renting the car, that doesn't change things much because the car is depreciating.
The consumer has to pay for the fact that cars in general lose value.
You can process that in various ways and you can vary who carries how much of the risk of it devaluing more or less over time, but none of that changes the concept that the car has to be paid for and its value written down to 'not much' over its useful life.
If there is an intermediary in the scheme, like a lease co, then they will be finding the capital and higher interest rates mean that costs more.
But I don'tthink the retail cash price is what matters on the whole.
The Audi is more a lump of white goods which the market values at £xxx per month in the UK and euro yyy over there and $zzz in the US&A.
It's not really about the factory gate price of cranking out another hatchback, it's about making the most cash in the long run by selling so many at high 'retail' prices and leasing/pcping/renting/HP-ing /hiring the optimum number across all markets in a way that locks in returning customers.
I feel that in recent years, the 'retail price' has been largely a made up number to make the monthly look good.
No bribe here, just attracted by the 554 bhp and pennies to run.
zj2016 said:
You’ve lost me at ‘convoluted bribes’.
No bribe here, just attracted by the 554 bhp and pennies to run.
My first law of cars is to buy something because you really want it!No bribe here, just attracted by the 554 bhp and pennies to run.
All this wage-slave stuff about saving tax is nice if you really wanted it in the first place.
Sadly I think a lot of EVs never use their generous HP.
Then again, a lot of nice IC cars suffer the same fate.
OutInTheShed said:
zj2016 said:
You’ve lost me at ‘convoluted bribes’.
No bribe here, just attracted by the 554 bhp and pennies to run.
My first law of cars is to buy something because you really want it!No bribe here, just attracted by the 554 bhp and pennies to run.
All this wage-slave stuff about saving tax is nice if you really wanted it in the first place.
Sadly I think a lot of EVs never use their generous HP.
Then again, a lot of nice IC cars suffer the same fate.
The sums make it a no brainer of an upgrade from a lifetime of 2.0 tdi’s.
OutInTheShed said:
zj2016 said:
You’ve lost me at ‘convoluted bribes’.
No bribe here, just attracted by the 554 bhp and pennies to run.
My first law of cars is to buy something because you really want it!No bribe here, just attracted by the 554 bhp and pennies to run.
All this wage-slave stuff about saving tax is nice if you really wanted it in the first place.
Sadly I think a lot of EVs never use their generous HP.
Then again, a lot of nice IC cars suffer the same fate.
It's just so easy and discrete, you can mash the throttle pretty much anywhere and these heavy dual motor EV's will typically not even give a chirp from their tyres, they just sod off down the road in silence.
You have to be more thoughtful in a powerful ICE because a few things happen when you stamp on it:
- They become massively inefficient, single digit mpg when pushing hard. A fast EV doesn't actually become much less efficient due to hard acceleration vs gentle.
- They make a lot of noise and anyone in earshot knows there's some bloke hammering his car, which isn't great.
- hard acceleration up through the gears stresses all parts of the powertrain significantly more than it does it a fixed gear EV, not really a concern for most owners as they won't keep the car into old age, but it has to have a knock on effect maintenance cost as some stage, new clutch/torque converter etc..
- Drive an ICE hard and fast and you're on the brakes a lot too. The high level of regen retardation on an EV is far gentler on pads and discs to acheive the same stopping power.
I've only had powerful and fun ICE cars and I've driven them all pretty hard, but it's cost me in various ways more than it does in the EV - hence, I find I mash the throttle more often in the EV and enjoy the surge of power more often too. Whenever I see the national speed limit sign I pass it at full throttle, it's fun and for the first time in any car doing so doesn't make people turn round and say 'what a dick', it also doesn't harm my wallet or the car itself, certainly not to the same extent as past ICE cars.
As ever, ICE and EV speed and power has to be enjoyed in different ways and it's tough to compare the two like for like.
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