Why Now is the Best Time to Shop for an Electric Vehicle
Electric vehicles (EVs) are stacking up on dealer lots, presenting a unique opportunity for shoppers to find great deals. The current market conditions have led to longer waiting times for EVs to be sold, with cars spending nearly three months on dealer lots before being purchased. This is a significant increase of 75% compared to the same period last year. In contrast, the industry average for all types of vehicles is 57 days. Furthermore, there is a surplus of EVs compared to gas-powered cars, with enough EVs in stock to last dealers about 100 days.
The abundance of EVs means that customers have a wide range of options to choose from and greater negotiating power. As dealers become more desperate to sell their inventory, they are willing to offer more discounts, incentives, and leasing deals to entice buyers. In fact, automakers are focusing on leasing deals to make EVs more affordable for consumers. Leases provide an excellent affordability hack for those who are interested in EVs but are concerned about the sticker price.
Leasing an EV presents a loophole for potential buyers. While new restrictions have made it harder to qualify for the $7,500 federal tax credit for EVs, these limitations do not apply to leased vehicles. Leased EVs are not subjected to the same pricing or parts-sourcing restrictions, and caps on buyer income are also not applicable since leasing does not involve a purchase. Car companies are capitalizing on this loophole by offering attractive leasing deals on EVs.
For example, Hyundai is offering the Ioniq 5 for $187 a month for 33 months, with about $4,000 due at signing. In comparison, purchasing the same vehicle with a similar down payment and a 7% average interest rate would cost about $800 a month for 60 months. This significant price difference makes leasing a much more affordable option for consumers.
Dealers and automakers are heavily relying on smaller down payments and more manageable monthly payments to encourage sales of their electric models. The strategy is proving successful, with leases accounting for almost 70% of all new EV sales. Affordability has become a crucial factor in the EV market as more cost-conscious consumers enter the segment. Although the average price paid for an EV still exceeds the average price paid for any new car by about $10,000, innovative solutions like leasing are helping bridge the gap and make EVs more accessible to a broader range of buyers.
In conclusion, the current surplus of EVs on dealer lots presents an excellent opportunity for consumers to find great deals on electric vehicles. Leasing has emerged as the best affordability hack for EVs, as it circumvents restrictions on federal tax credits and allows for lower monthly payments. With increased negotiating power and a range of leasing options to choose from, now is the perfect time for shoppers to explore the world of electric vehicles.
