Shocking power of battery leasing
I’VEWRITTEN before of my belief that buying an electric vehicle (EV) currently remains a minefield of potential pitfalls and complications. We are constantly being encouraged to ditch fossil fuels and switch to battery-operated cars but you need to understand exactly what you may be getting into, as one of the callers to my LBC show found out recently. He sold his electric car but forgot he had an outstanding battery lease. As a result, he has been left with a monthly payment even though he no longer has the car – nor the battery!
WHAT IS A BATTERY LEASE?
When EVs were first put on sale, many potential customers were concerned about how long the battery would last and the expense of a replacement.To counter these fears, Nissan and Renault offered battery leases by which you would buy and own the actual electrical vehicle, but rent the battery – typically at a cost of £50 to £100 per month depending on your mileage. The advantage was twofold; it would reduce the vehicle’s purchase price; and, when the battery needed replacing, you could swap it as part of the agreement. The most common examples are via Renault (for the Twizy microcar, Zoe hatchback and Kangoo electric van) and Nissan (for its Leaf).
THE PROBLEM WITH LEASES
They are a long-term commitment where you have an obligation to continue to make monthly payments that remains unless you are able to sell the vehicle with the lease. As a consequence, when you come to sell a vehicle with a battery lease, buyers will expect a hefty discount or may not want the hassle. If the car’s going cheap, the lease could be more expensive monthly than the vehicle.
Plus, the leasing cost does not change over time so as the car ages, it becomes less beneficial. The other major issue is that it is up to you to ensure the liability for the finance is passed over to the buyer when you sell the car and, if you fail to do this, the liability remains with you.
HOW DO I GET OUT OF BATTERY LEASE?
When you sell your vehicle, liability will pass to the buyer if they agree to this. Alternatively, both Renault and Nissan will allow you to “buy out” the finance on the Leaf and Zoe, and most are now “converted” to “battery-owned” status when they change owners to help simplify the used market.