A recent study reveals that a significant majority of customers with a new GM electric crossover – namely a new Cadillac Lyriq, Chevy Blazer EV, or Chevy Equinox EV – have opted to lease, rather than a traditional loan or cash purchase. This trend could indicate a more cautious approach among consumers when it comes to committing to long-term ownership of a new electric vehicle. It may also signal changes in the broader EV landscape as automakers navigate shifts in consumer demand and regulatory changes.
According to a report from Experian, EVs made up just over 10 percent of new vehicle financing during the third quarter of the 2024 calendar year, an increase of more than 30 percent compared to 2023. Nearly 45 percent of all new EV transactions for the quarter were leases, an increase of nearly 25 percent from Q3 of 2023.
The preference for leasing over buying may stem from several factors. Leasing offers a lower monthly payment compared to loans, as evidenced by stark contrasts in costs for GM’s EV models. For instance, the Cadillac Lyriq averages $1,030 per month on a loan, but drops to $654 with a lease. Similarly, the Chevy Blazer EV costs an average of $822 per month on a loan versus $429 on a lease.
This financial disparity likely appeals to buyers hesitant about the long-term resale value or reliability of electric vehicles, or those simply not ready for a long-term commitment to an EV. Leasing provides the flexibility to try an electric vehicle without being tied down to the full depreciation risks. Additionally, pricing continues to be a major barrier to EV adoption, a factor that will likely be exacerbated by deletion of the $7,500 federal tax credit once president-elect Trump takes office for a second term.
For now, the Cadillac Lyriq, Chevy Blazer EV, and Chevy Equinox EV all qualify for the full U.S. EV tax credit. Conversely, competitors like the Ford Mustang Mach-E, Hyundai Ioniq 5, and BMW i4 do not qualify from the full credit on purchases, but can still access some of the benefits through commercial leasing.
This financial incentive has made leasing an attractive option for buyers of non-GM models as well, with EVs representing 17.3 percent of all new vehicle leases in Q3 2024. Honda’s Prologue, for example, achieved an 88-percent lease ratio thanks to aggressive lease programs offering low monthly payments.
| Lease Percentage | Loan Percentage | Cash / Unknown Percentage | |
|---|---|---|---|
| Honda Prologue | 88 | 7 | 5 |
| BMW i4 | 86 | 10 | 4 |
| Hyundai Ioniq 5 | 79 | 8 | 13 |
| Cadillac Lyriq | 72 | 18 | 10 |
| Chevy Blazer EV | 70 | 21 | 9 |
| Chevy Equinox EV | 62 | 26 | 12 |
| Ford Mustang Mach-E | 56 | 40 | 4 |
| Tesla Model 3 | 43 | 40 | 17 |
| Tesla Model Y | 13 | 77 | 10 |
| Tesla Cybertruck | 0 | 64 | 36 |
The growing preference for EV leasing could lead to an influx of pre-owned GM EVs hitting dealer lots in the coming years as leases end. This may in turn drive more accessible pricing for used electric vehicles, potentially broadening adoption among budget-conscious buyers.
Comments
It’s hard for me to lease. Even with my Cadillac. I simply grow attached to my cars as I see them as members of my family and hold onto them for at least 10 years or until they become endless money pits (call me weird. I don’t care). So this is why I keep saying I am not ready to make the switch. I don’t “rent” my car and trade them in after 3 years. They literally are long term investments for me and they need to stand the test of time and so far, I don’t feel it with electric. Especially at what they cost currently.
That being said though, I am curious to know how many people in those leases are planning to buy out the car should they like it. It’s interesting to see Teslas have higher buy rates (Cybertruck notwithstanding) but it could be because many Teslas being purchased now are second Teslas bought buy returning customers that landed up liking them.
I would also guess GM EV buyers are more traditional (drawn to traditional automotive interiors and not a gimmicky screen only interior full of useless party tricks) would be more risk averse to owning an EV and prefer leasing before being comfortable with owning.
I’d never lease either. It’s the fashionistas that lease and have to have the latest fashion at all times.
Tesla didn’t offer lease-end buyouts until about a week ago.
If not buying the one they leased maybe they traded in the leased car and bought a new one.
For the last couple years they also were largely disallowing dealer buy-outs of leases as well, but that has also changed. It’s not clear yet if they’re allowing people who started their lease before the policy change to have the same flexibility.
Makes sense. Depreciation of these mostly unwanted abominations is atrocious. BUT, getting out of a lease, if the vehicle is not liked, if FAR harder than a loan. You’ll have massive fees. It’s a lose-lose for EVs.
With GMF, to get out of your lease, it’s literally just a loan balance, just like a traditional auto loan. There are no extra fees. I’ve traded in my last 5 leases at after only 6 months and broke even each time. This time, I’ll be keeping the vehicle till the end of the lease just because the values have gone down.
I have never leased. Some lease EVs cause they think the batteries are going to change drastically. I dont think they will for at least another 5 years and if they do they will cost more for the first adopters so I will gladly buy mine out right, drive for 5 years and deal with a new upgrade then.
For what they are charging to lease an EV, you’re paying 80 + % of the MSRP and have nothing to show for it at lease end. Makes absolutely no financial sense unless you can use it as a business expense.