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Is car subscription cheaper than leasing?

electric vehicle / electric car subscription

What is a car subscription?

A car subscription involves monthly payments, typically anywhere in length from one month up to 2 years, and the insurance and tax are generally included. The subscription company is also responsible for booking MOT’s, services, and any repairs, but you will still be charged for these if the vehicle doesn’t return in its original condition. You don’t get to own the vehicle at the end of the contract, but you can choose to renew, or swap your current one for a different model.

Advantages of car subscription:

  • Technology is always changing, so you don’t have to commit to a car long term, especially when it comes to how fast electric cars are evolving.
  • Car subscriptions often give you access to the newest models, so you don’t have to join a waiting list to get a new car.
  • Car subscriptions usually offer the option of having a rolling contract, so you can renew as desired; this means that you have more control over the term (the shortest contract at EZOO is 1 month), as opposed to committing to a long-term lease from the beginning.
  • The longer the term you sign up for, the cheaper your monthly payments will be.
  • The company you get your car subscription with sorts out the insurance, tax (all EZOO cars are TFL taxed), MOT and service for your vehicle.
  • At EZOO, we only conduct a soft affordability check, not a credit check.
  • There is no balloon payment at the end of your term, you simply pay the monthly cost.

Disdvantages of car subscription:

  • A deposit has to be paid on top of your first monthly payment at the start of your term to cover any potential damage to the vehicle, but you do get it refunded if it returns in the same condition you received it in.
  • The vehicle you choose is the one you will have for the entire duration of your term; you can only change it once your contract ends.
  • You may be charged extra at the end of your term if the car needs to be repaired or cleaned.
buying car ezoo electric car subscription

What is car leasing?

Similar to a car subscription, leasing a car also involves monthly payments, but usually over a longer period of time of up to 5 years. However, once the vehicle is with the customer, they are responsible for MOT’s, services, and repairs.

Advantages of car leasing:

  • Road tax is sometimes included in car leasing, but you should check this with the leasing company.
  • Leasing a car gives you the option to pay a settlement figure to own the car at the end of your term.
  • You can end your contract once you have paid half of its value, although you have to return the vehicle to the finance company.

Disadvantages of car leasing:

  • With most leasing deals, you are only paying for the car; monthly costs typically don’t cover insurance, tax, servicing, or MOT’s.
  • You do not own the vehicle during the term.
  • It is paid in monthly instalments, so you need a stable income.
  • Leasing companies run credit checks to see if you are able to pay the monthly instalments; missing or late payments affect your credit score negatively.
  • There is a monthly mileage limit, although this can be increased at an extra cost.
  • Car leasing comes with a bigger commitment (usually 3-5 years) so you don’t have the option to try out a car for a shorter period of time
  • Ending your contract early may lead to extra costs.
money exchange ezoo electric car subscription

Comparison of car subscription and car leasing

We have compared the prices of a few cars on EZOO subscription vs a car lease over a 24-month period, with an allowance of 10,000 annual miles.

Volkswagen ID.3

EZOO: £625/month with a deposit of £1,120 that will be refunded at the end of the term.

What’s included: insurance, tax, breakdown cover, maintenance.

Leasing: £646.66/month with an initial payment of 1 month.

What’s included: tax, breakdown cover. Maintenance is available at £11.13/month.

In this case, getting a Volkswagen ID.3 with an EZOO subscription is already cheaper than leasing this vehicle, and any extras such as insurance and maintenance are included in the deal

Tesla Model 3

EZOO: £999/month with a deposit of £1,120 that will be refunded at the end of the term.

What’s included: insurance, tax, breakdown cover, maintenance.

Leasing: £969.46/month with an initial payment of 1 month.

What’s included: tax, breakdown cover. Maintenance is available at £21.56/month.

Although in this case the monthly payments are cheaper with a lease, once you add the maintenance price, the costs are very similar at £999/month and £991.02/month. Even at this price, leasing a Tesla Model 3 still doesn’t include insurance, so once that is added, it will be more expensive than the subscription- not to mention that this creates another problem for the customer to solve.

giving key ezoo electric car subscription

Overall, although getting a car on subscription may be seem more expensive at first glance, once you add up all extra costs that come with leasing a car (insurance, tax etc), a car subscription actually ends up being cheaper than leasing. It also gives you more flexibility with your contract and is hassle free as the company deals with all the servicing and repairs required, as well as getting you insured on your vehicle.

To find out more about deals and pricing, please visit our Browse Cars section, or contact us by sending an email to [email protected].