LIKE if leasing could be for you and SHARE to tell employers about EV company car benefits Whilst the cost of electric cars are definitely coming down, for many people, leasing is the most affordable way to go electric. In this episode Robert speaks to Matthew Walters from LeasePlan to find out why employers and employees might benefit if company cars were to become electric. If you're baffled by phrases like 'benefit in kind' and confused by the taxation costs of EVs, then hopefully we might be able to help answer some of your questions. With more leasing options available and competitive rates for both businesses and individuals, now could be the perfect time to make the switch to electric LeasePlan - www.leaseplan.com/en-gb/ Fully Charged is 100% independent thanks to RUclips Memberships and Patreons. Without you this channel wouldn’t be possible! If you’d like to help support the Fully Charged channel and its mission: Become a Patreon: www.patreon.com/fullychargedshow Become a RUclips member: use JOIN button above Subscribe to Fully Charged & the Fully Charged PLUS channels Buy the Fully Charged Guide to Electric Vehicles & Clean Energy : buff.ly/2GybGt0 Browse the Fully Charged store: shop.fullycharged.show/ Visit our LIVE exhibitions in the UK, USA & Europe: FullyCharged.Show/events Subscribe for episode alerts and the Fully Charged newsletter: fullycharged.show/zap-sign-up/ Visit: FullyCharged.Show Find us on Twitter: twitter.com/fullychargedshw Follow us on Instagram: instagram.com/fullychargedshow Timestamps: 0:00 Makes (EV leasing) sense 2:16 Can't afford an EV! 2:53 Benefit in kind explained 4:16 EV taxation 5:19 Salary sacrifice 6:33 Energy rates 7:13 Tires & screen wash 8:07 Individual leasing 9:25 Risk limitation 11:42 Don't buy new 12:56 Increase the lease 14:10 EV 2nd hand market 14:49 Battery re-use 15:59 Battery degradation 16:45 EV future 17:33 EV road tax 19:31 Road usage 20:25 Company charging 22:25 Learnt stuff? 22:56 Subscribe, support, join
@@davefroman4700 those numbers would be great for one person. But have you noticed that fully charged is a team of people? People aren't free and nor is travel, and gear.
This kind of leasing (renting) includes a monthly fee, defensive residual value, monthly rent VAT and maintenance margins (and in the end you don't own the car). New EV taxations all over Europe will be based on the acquisition costs and will in a given moment (as soon has new EV sales surpass ICE sales), artificially revalue EV cars sold before. So for now, it may be better to obtain EV's ownership (either through leasing, credit or direct buy).
My model for motoring has been, pay about £4K for a decent second hand car, make it last at least 10 years. All I (and many others I suspect) can afford. This sort of monthly outlay for a car I don't end up owning, is I'm afraid a non-starter for many...
@@alanrobinson2229 he makes his own with solar panels. That kind would be difficult to tax especially as he keeps it in a couple of batteries. However the point is that it is difficult to separate domestic use from motoring use with there being few ways of determining what you are using it for. As the hemp growers know.
@@rbdogwood Germany managed to sort of tax your own energy from solar panels. Under Germany’s renewable energy act, renewable energy sent to the grid is being paid at a fixed rate for 20 years after installation, and the difference between market price and fixed rate is being paid from a special fee, which is received from anyone consuming grid electricity (yet some types of high consumption companies are able to reduce their fees to very low or even zero so they’ll be still competitive on their international markets). The fixed rate is often very interesting, effectively paying off the solar panels in 10-15 years, while the extra 10-5 years are net profit for the solar panel operators. However, a few years ago, the German government decided to charge the same fee also from anyone consuming their own renewable electricity. As it’s very attractive to send your power off to the grid and your net power production is also available, it is fairly simple to calculate that extra fee/tax: the meters are already in place. Luckily, the German government just this year decided to stop doing so for smaller renewable energy systems (such as typical solar panels installed on many home roofs). About 52% of the average consumers electricity bill is various taxes and a fee covering said subsidies on renewables, another 23% are grid fees and just around 25% are production and margin of electricity. Oh, and in terms of taxes on electricity: Germany does also have a special electricity tax (“Stromsteuer”) , but also charges VAT on the electricity bill. So one is also being charged VAT on 75% of other fees and taxes… So, yes: taxes on electricity did exist until very recently, including taxes on power from your own solar panels.
Good start of that conversation. I could poke lots of holes in this but that wasn't the point of this video. It was making people aware that there are options and discussions going on to solve this issue. Again, a good start and thank you.
80% of the comment section is obessed with "you cant tax electricity" meanwhile im thinking "can Robert honestly not afford a Model 3?" Edit: Surprised at the debate this caused, and this is meant in no way as a dig in Robert. It was just me making a semi-cheeky comment, and i know its a lot of cash for anyone to have sloshing about. Ive half mind to delete it, but i also think its rude to cut people off mid conversation
@@stephenholland5930 wow, people really think he's mega rich... I mean he was on a moderately successful famously low-budget scifi show. the point i think he was trying to make is that who has £65k in cash just sitting around, not in your house or your pension or whereever.
Leasing pitfalls: Always read the the small print of the contract terms and conditions. Leasing a vehicle means that you will have to pay a non-returnable deposit at the beginning of the contract term. This can be the equivalent to one to six months of the monthly leasing fee. The contract period can be between 12 and usually 36 months, but monthly contract fees increase sharply for short 12 month leases. You DO NOT build any equity through your monthly leasing payments, and leasing is a service contract and therefore subject to 20% VAT on top of your monthly contract fee. Business users pay the VAT on the monthly leasing invoice and reclaim the VAT payment as per other business expenditure. Personal leasing users cannot reclaim the VAT portion of the monthly leasing fee. Leasing contract fees are also subject to user mileage restrictions. The more miles covered, the more expensive the monthly contract will be. For example at time of writing a Tesla Model S Performance, Ford Mustang Mach-e, and a Renault Zoe all without options, on a 36 month period contract with 10,000 miles per annum coverage and three month up front deposit are on average £970, £450 and £275 per month including VAT respectively. So not quite as cheap as you might expect. On top of this you will have to pay your insurance, charging costs and vehicle consumables such as tyres, windscreen wipers, service lubricants, and service labour costs if not included in the leasing contract. Check your insurance carefully. If the vehicle is a total loss or is stolen and I recovered, then the leasing company will expect full MSRP of the vehicle plus the cost of options, regardless if they actually purchased the vehicle at a trade discounted wholesale price. Your insurers on the other hand will only want to pay current market value, leaving you as the lessee responsible for the gap in between the the two values. This is why your insurer recommends GAP insurance on lease vehicles. When the vehicle is purchased from the manufacturer it will usually come with a 2 to 5 year free servicing plan, so make sure your make and model benefits from any manufacturers servicing deals. The contract will state that the vehicle must be serviced at the correct intervals by an authorised agent, otherwise you as the lessee invalidate the lease contract. Return the vehicle in pristine condition with less than the agreed mileage, and the leasing company will slap you on the back and will want to put you into your next more expensive contract.After all, you have just paid for the majority of the whiles initial depreciation, and the leasing company can trade the vehicle at a premium price, but not actually share the reward with you. Return the vehicle with even minor interior and exterior blemishes and the leasing company retain the right to fix all issues and send you the bill. Leasing companies will verbally say that their contracts include fair wear and tear, but in reality this is a fallacy. Be warned, leasing companies are just another finance broker and not vehicle manufacturers. They arrange low rate commercial banking finance to purchase vehicles in volume, and often purchase vehicles that manufacturers old stock, so your vehicle could be two yers old even though it has not been registered. This is why your chosen make and model is often not available, as leasing companies make very little money on one off orders, and want you to lease whatever they have in stock. I hope this has helped the audience, as the interview with Robert on leasing seemed like a patron advertisement.
God yes... The company I work for has a fleet, who are quite kind. For equipment, another leasing company supplies... Loxam. The foreman takes photo's of the machines so they can't double (or triple) charge repairs. Leasing companies are like banks, or Danish taxes ;)
Yeah 'dumbed down' didn't come close! Robert sat there open mouthed, saying yes and no at intervals as some dodgy salesman told him how great everything was........!!
I’m waiting delivery of my Vw id3 on a salary sacrifice lease. I’ve done the maths and it was far more beneficial then spending £6-10k on a second hand ice car
Good move Iain. I’ve been driving electric for 6years now, on salary sacrifice lease. Have saved around £500 per year against the cost of an £8k used car, and have been driving a brand new reliable, comfortable and clean car too!
@@jdnrotterdam2150, with no Benefit in Kind tax and road tax to pay, no servicing costs, very low maintenance costs, electricity at 1/4!(or less) the price of fossil fuels, no congestion fees, and doing 25,000 miles a year - I’m saving money..
I appreciated him acknowledging up front that this was about UK leasing. Too often EV channels use examples specific to one market, seemingly ignorant of the differences. For example, the huge differences between type-2 in Europe vs. level-2 in North America as but one of many examples.
I’ve always bought and held my cars for a long time, usually second hand from about £5k or so, I can’t imagine being better off spending hundreds per month every month for a lease
That video will come in ten, 20 years time. At the moment, there are no EVs with a sizeable range over 5 years old. This video is for now. I predict the number of people leasing EVs to increase over the next ten years. Then, when the current generation (Kia eniro/ kona / telsa 3/ new leaf) are 10, 15, 20 years old, and cost about 5k, the leasing portion will drop significantly.
Have you looked at any leasing company websites to see how much it costs to lease an EV? It might be worth checking some out. Remember that the cost of your fuel is much cheaper if it’s an EV. Also if you drive into London then the congestion charge and ULEZ charge are not applicable saving loads of money each week/month etc.
Ive seen some leafs for 6k and some zoes. Which is a great option. Keep it for a year. The depreciation will be small. Sell it on. Get another. It would workout at something tiny like 40 quid a month. No road tax. Super cheap electricity. I cant wait for more rich people to buymore evs and sell them on.
Super helpful, lots of comparisons to where I live (Canada) and as the UK leads the way in Electric Vehicle adoption it's interesting to see what options for businesses might be on the horizon for Canadians. Also super grateful for our low electricity prices here...thanks to all the Hydro dams :)...sadly this coupled with low gas/petrol prices means people are slower to adopt to an electric car...but it's happening :) slowly but surely....fabulous video thank you from Victoria BC :)
This is a great channel Robert. Keep up the excellent work. I found this particularly useful as I’m thinking of buying my first EV and leasing it is a strong contender.
When he said “they can’t tax electricity” he means they can’t increase it now or in the near future by a large proportion. Because dear old lady up the street who doesn’t have a car and never will, can’t be taxed 80% more for putting the kettle on. People just won’t let it happen. Road pricing is the way to go, it just needs to be priced right
Oh my goodness, this is so appropriate a video. I am about to sign the documents on a VW ID.3 for 3 years until the Tesla Compact/M2 comes along. I can't justify a Model 3, but I want to make the change.
Fantastic decision, congrats and welcome to the EV revolution! I made a similar choice with buying an old 2nd hand low range EV a few years ago, then saved up until I could afford a Model 3.
As I understand it, in the UK the DVLA record mileage through the MOT, so we record EV mileage for vehicles with a green reg plate at MOT and tax through that system and bill through what is ICE road tax system, simples.
Bravo, I was thinking of leasing my first electric car, so your show was very helpful! I also feel that there is another huge advantage in leasing in that EV’s are evolving so quickly with Better batteries, self driving, self charging and overall comfort, if you don’t lease, you might get left Behind! I’d like to have the advantage of the latest and best technology!
This. When you hand back a leased car 100% of what you’ve spend is gone. When you own and sell the car it off, (so long as deprecation doesnt fall off a cliff) you’ll find you’ve actually spent less.
I'm glad you addressed the second-hand post-lease market. If we are to have a proper take-up of EV's we need the second hand market to be decent, which in turn means that Corporate fleets need to go electric as they are one of the main sources for the second hand market.
How to tax road usage - Fit a tamper proof odometer and extract its data at MOT time, you pay for your MOT and your annual travel fee @ £0.0x/mile travelled.. the garage act as tax collector.
Here in NZ diesel cars fuel is "tax free" and the owner then buys RUC (road user charges) per 1000km up front so say $1000NZD for 14000km (about a year). EVs are RUC free until Jan2022 then we pay RUC but we dont know at what rate yet.
Superb video. Clean, clear and calm. As a company director that just picked up a Twizy (with an eye on a Tesla later in the year! 🤞) this confirmed what research I’d done, and taught me about the fees for having a charging point at the office. Thank you!
People are going to jump on me for this, but hear me out: Tires! Tax the tires. If there ever was something we buy that’s a clear indication of our individual wear and tear it’s tires! Put the tax on a sliding scale based on load and speed rating and tire price, then set up a 4 year payment plan and BANG! Every time someone buys tires they are simply billed by the government for the damage that specific type of tire will do to the road over it’s expected lifetime. When you buy a new car make it a line item on the bill of sale. Used cars and used tires are exempt unless of course a used car dealership installs new tires on a car before selling. Or transfer the remaining tax payments to the new owner, whichever floats your boat. With that now you have a use tax that is implicitly based on vehicle worth / weight / sportiness and distance traveled without ever having to actually go and verify which type of car, it’s actual value, or actual distance traveled.
Well, the problem with this is, the Government already are taxing the selling of the tires and the rest of everything they can! So that mean they be taxing not only the sale of them but then the using of the tires too? And if they say tax the use at, 10% per every Km per EV. They would be making sheds loads of tax on the millions of cars possible in the UK. So that be say 10% on the using of the tires plus the 5 or even maybe 10% on the sales of those already pricey to buy tires. I sure the Tax man would be over the moon? Then add the tax on the Electric they already charge for now when we the non rich without solar panels have to buy electricity from the greedy power companies. And you be seeing tons of money made by the lovely caring tax man. Nice idea you did put forward but have too many faults. Remember this thought, You got to be very well off or rich to afford the solar panels needed and the power wall needed and the upgrading of your consumer electricity fuse board and also the south facing roof fancy house, to be able to benefit from the tech and the money saving on electricity used by your lovely house! If your poor you can't benefit from any of it as you can't afford to buy even one bit of it. you can't even afford to buy a e-bicycle ( £3000 upwards for it ) to make your life easier traveling locally, Never know a lovely top end EV done by leasing or buying it.
@@colincampbell3679 I don't see a whole lot of reasoning in your comment, just blustering about already being taxed too much, so let's throw some reasoning at the problem shall we? 1) The video makes clear that tax structures will need to be reworked in order to pay for the damage done to roads by EV's. Why? Because the current tax structure relies on a massive gasoline tax equivalent to $2.99/USGALLON (I live in USA, deal with it). I'm going to point out right now that you pay more in taxes for gasoline than I pay for gasoline. And to think I thought gas taxes were high in these parts! Let's put this into numbers. A 2021 Mazda3 S Hatchback gets "combined" 29 miles/USGal. At the current tax rate, you pay $0.10 per mile in that car. Now, I don't know what your electricity costs are. I live in coal country, so if I were paying 5% tax on electricity like apparently you do that would be about $0.0085/kW-hr. If your Tesla Model 3 gets 250 w-h/mile then the tax is $0.002ish /mile. That's right, electric car folk pay 2% the use tax of ICE folk. Totally fair, right? But let's keep going, because you said something about taxing the poor! The Tesla Model 3 base price is 70% higher (in USA) than Mazda3 AND it weighs up to 1000# more. That's a later point though, so just note if everyone went EV and tax structures weren't completely reworked UK would lose 98% of tax dollars related to the fuel powering the vehicle. If you want the roads to be like they were in the 1920's that's how you get roads like they were in the 1920's. 2) The gas tax, any flat rate/km tax, or energy consumed based tax will be woefully unfair. That is, it is a tax heavily weighted towards the poor. I will explain: consider damage to the road by your vehicle. You can't see it until it turns into a hole or crack but every time your vehicle passes over road it does damage. Now, the funny thing about damage and material properties is that the relationship between load and damage is NOT linear. If you double the load, you may increase damage an order of magnitude. This means heavier vehicles are WAY WORSE on the road than lighter vehicles. Compounding the vehicle mass to damage per mile ratio is the fact that as a vehicle gets heavier it actually becomes more fuel efficient from a ton-miles/gallon standpoint. This means TAX DOLLARS PER TON-MILE SPENT IS INVERSELY PROPORTIONAL TO FUEL MILEAGE. Drive a Mazda3? you're getting up to 44 ton-miles/gallon. That 40 ton class 8 truck next to you? It's getting above 4.5 miles/gallon, or 180 ton-miles/gallon! Taxing a vehicles fuel or energy use tilts the burden of funding roads to the poor. These are folks who not only are buying older, less fuel efficient vehicles, they are folks who will also be forced by their economic standing to purchase smaller vehicles than a more well to do family of the same size would, meaning they wind up paying the highest tax rate per ton-mile of their vehicle. TLDR; The second point illustrates how fuel use based taxes or pure mileage based taxes shift the burden towards the poor and allow the rich to get away with their excess damage. By re-structuring the taxes of something indicative of a vehicle's road load, like tires, to make up the difference and replace altogether fuel tax the burden is shifted to the appropriate people. Imagine a world where after buying tires a tax form were sent to you and the government and over the next 4 years you payed a marginal tax based on 1) Tire Price, 2) Combination of load / performance rating, and 3) Income of the buyer. You can assign the tax appropriately and shelter those who need to be sheltered while gouging those who need to be gouged. Worried about rich folks buying cheap incorrectly rated tires? Well, if someone rich were to get into a crash and it were found out they had an inappropriate tire for their vehicle there would be repercussions. I'm sure there already are. Also, using tires of lower weight and speed rating reduce peak loads over bumps thus resulting in less road damage for a given vehicle. TAX MAN STILL WINS!!!
done during WWII, rationing/extra tax - seems to force longer term thinking/planning - people less likely to waste trips as tires were difficult to replace - save tire wear
That makes a good deal of sense, in many ways. The purpose of the fuel tax is to simulate a use-tax, and tire-wear is related to road-wear more directly than anything else. It would incentivize smaller/lighter vehicles similarly to how the fuel tax did. And as the grid gets cleaner, tire residue is going to be an increasing proportion of the environmental cost of driving, and this is a way to incentivize making less of that.
An interesting concept about shifting the tax to tyre purchase... I would include a short weekend break by car to a country not running the same tax regime i.e. legitimately buy your tyres with less tax. The current ~70% total tax take via duty and VAT on petrol in the UK when equated to a tyre would be in the order of an eye watering 700% Tax on Tyres (back of a cigarette packet calculation on a car doing 10,000 miles a year, 40mpg, single drive axle car with 20K mile tyre life on drive axle, 30K mile on non drive wheels, current tyre price of £100 each).
Good idea, proportional to road use and vehicle weight and therefore tied to road damage. It would encourage the development of tyres that wore less and lasted longer, discourage bad driving and cut particles. (Would probably boost the security wheel nuts industry) I think badly maintained roads would get more attention too, as drivers with a pot-hole damaged tyre would soon remember what Road Fund Licensing was originally intended for.
I was just considering either buying or leasing an EV. In the end I went with buying. I found the leasing terms a bit too restrictive. My bank had a decent loan deal for EVs which made the monthly payments and total cost quite reasonable. And in the end I'll have the car
I get that businesses can claim back VAT, but they also recharge it on sales, ie leases. Also not a fan of leasing, they are middle men who require a profit to cover their admin and staff, which the end customer is paying for. And that's before excess mileage charges and disputes on wear and tear.
In Scotland the Energy Saving Trust has loans for new EVs at 0% over 5 years and recently introduced a similar scheme for 2nd hand EVs to. Yes, a few restrictions and conditions to the amount that can be borrowed and still subject to credit checks for suitability.... I'm leaning toward purchase of a 2nd hand vehicle as excess mileage on a lease is a concern to me along with normal wear and tear interpretation when the vehicle is handed back.
@@richardheasman Difference is that's a loan for ownership. I'd recommend anyone take a low interest loan to own a car over a lease anyday. If you've got excess disposable cash and don't want the maintenance hassel fine get a lease. Wish Wales had those loan offers, would definitely be getting the Model 3 I want
@@barriedear5990 what I took from the video is that the leasing company buys the car without VAT, then calculates lease cost for the customer based on VAT being included. Pocketing the difference. I'd rather buy a car and pay VAT, then lease and give the money to company shareholders.
Great video Robert, the firm I work for is currently going down the all electric fleet and it's all getting rather confusing, reall cleared a few things up , cheers
That's not strictly true more people who have home charging the gov will want a pice of it you need a smart meter the smart meter will know you're charging your car you pay. VAT or something on that .
It's already taxed in the UK. It doesn't have the insane levels of duty that fossil fuels do. It will be difficult to do that same kind of taxation because electricity is a basic utility.
Definitely keep this video tagged in your library or somewhere. Relevant information even for people like me who cannot afford to buy a car and want to lease electric
Now, now Robert. No tax on electricity? Your domestic electricity attracts 5% VAT. In addition an element of your Bill is something called CCL (climate change levy). This actually funds some of the subsidies paid to renewable energy suppliers. There’s 2 forms of tax already there, that you probably didn’t know about. On the subject of leasing, most EV contracts appear comparatively unattractive. They’re all quoted as 9mths up front & 5000 miles pa. Once you adjust those figures to something resembling the real world, the figures are sky high in most cases. Interestingly EV sales must have slowed. CarWow have lots of offers at present, particularly if you look at pre-Reg stuff. I was even offered £5k off the entry level ID3 last week.
This video is very interesting. There's a lot of great points of view in car leasing and ownership of one. Also for the companies involved. Thanks for the good videos as always.
@@jamesvandamme7786 Yes, it's around 4.6p per mile which is about $0.06/mile in USD. In the US it's around $0.016/mile. So the UK is about 4x more expensive per mile for taxes. However the US drives a lot more miles so in the end the average US household only pays 50% of the gas taxes that the UK pays. So $250/year for the US and $500/year for the UK in USD. In my state I pay EV tax to account for the fact that I don't use gas and they just made up a number. The guy that did it admitted to making it up out of thin air claiming it "seemed about right" to a newspaper, no joke. The result is I pay 2x more road tax on my EV than my SUV.
@@gregb7353 What's going to happen when huge trucks (lorries, sorry) start hitting the road? And I do mean hit, those heavy tires are far worse on roads than cars.
@@fredbloggs72 He means you can't tax the EV electricity differently to all our other electricity. Raising the electricity tax overall isn't going to suit those without cars and makes your cup of tea prohibitively expensive!
In my company (in France) we get a card to pay for gas/diesel with our company car. That's a huge incentive to stay with an ICE car. And we are with LeasePlan.
@@garrettosullivan8830 I would need to upgrade and expand my solar panels, and I'm in the right shaped house, but I think I could just about manage if I had the right sized batteries and a car to house system. Pre EV I gained 180kWh over my first Spring to Autumn but the company made me change to a non reversing meter, but if I could use the grid as a storage device (as I did then) and maybe a 250 watt wind turbine then I think I could go carbon neutral.
I can see a separate electric meter for ev chargers for the home being a thing. Especially with all the existing smart meters that had be installed. The ev meter could just had the VED per KWH put in to the car, then this could be collected by your electricity provider and passed on.
Im taking delivery of a Polestar 2 next month through the NHS salary sacrifice, had an amazing deal, one monthly payment includes, servicing, tyres, tax, fully comp insurance for up to 5 named people. I could never afford one otherwise. And having a 7kw charger fitted at home for no extra charge.
In my country (Portugal) it's not normal to do leasings normally people do loans to a bank or some financial entity. From what saw in the leasing sites, for me, one of the cons is the limited mileage per year and the prices that are very similar to do a loan but I think for the same price is better to lease.
If you are going to hold your breath, make sure you breath in deeply. I went down this path in 2017. As soon as I mentioned the word electric, the person on the end of the phone said “No. Stop. We don’t do that”. I thanked him for his time. It was Nissan Leaf, Outlander PHEV or a Tesla model S only. I suppose I can lease a Hyundai now but I gave up trying. Can’t even get hold of a RAV4. I actually wanted to lease an electric motorcycle. The dealership stuffed that right up
@@theairstig9164 I have leased(Novated) a BEV Ioniq through my work who use Maxxia no issue at all as I am in Australia as well. I also know others do the same but there are other leasing companies that people have and do use for leasing EV's in Australia. Privately though that is probably another matter altogether.
At my company, we started a company car scheme specifically for EVs. The tax incentives are huge. We have bought 2 Tesla 3s and a Kia eNiro so far. Hoping to do a VW ID3 and a Renault Zoe this year :) Oh, plus we installed 2 x type 2 chargers at the office so staff can charge for free at work. So much cheaper, cleaner and better than old ICE car schemes.
yeah, people really seem to be missing the point that the point of duty is to discourage driving and pay for the road network, you cannot add a tax to electricity to do that, or replace diesel taxation with an equivalent result
This was an excellent video thank you fullycharged! And superb knowledge sharing from Matthew. Im looking into EVs through work as salary sacrifice but there's so many unknowns and the lease company aren't replying to my financial questions. So this has been great!
That's because the lease companies have been conservative,and EVs have not only been better value than thought, but actually better value than ICE cars off the same price. And this isnt finished...3 years sales are the result off the sales chain from birth to death, and EVs are still too new to have completed this chain..and as EVs get cheaper the savings from fuel get larger. At 40p per mile deprivation and 12/3p for fuel the saving is 15%. But at 5p per mile deprication that same saving is 47%. And on 5p overnight rate your looking at 64% or people who could only afford 3k ice, buying 9k EVs . Imagine how that extra demand will effect the sales chain and off course lease prices.
I don't know a single person in Canada who has leased an EV, everyone I know all bought them through dealership financing. The dealers didn't even talk about leasing as an option! But leasing was already very popular for ICE vehicles in the UK, more so than here. So tax differences from one country to the next probably plays a role. Canadian sales tax rates vary from as much as 15.5% to as little as 5%, vs. 25% or so in most of Europe, so that likely pays a huge role!
But a base Model 3 here (Australia) costs $70,000. If you choose almost any decent options you’ll be over $100,000. I’m thinking leasing may be the only way I get to drive the “cheap” Tesla. :( The Canadian dollar is slightly stronger than the Aussie dollar at the moment, but in my industry (IT) my Canadian colleagues earn better wages than we have here in Australia, so $100,000 or even $70,000 is a huge amount for a car.
Actually no, you should never buy something that loses value. Cars always lose value, unless you're talking collector editions or classic cars. Therefore it makes zero sense to spend your own money on something like that.
I'm loving driving my ID3 having graduated from a Golf GTE. Fully charged has been an important part of my journey. I look forward to the next episode every week. But ... of course you can tax electrcity use. You probably already pay VAT. Your supplier can be required to charge tax and to funnel it back to inland revenue. It will come once they don't feel its necessary to promote electric cars. It will be difficuylt to differentiate between domestic and automotive use. But even that's going to become possible.
Nice. I've been leasing an Ioniq EV via Salary Sacrifice which includes Insurance, Servicing/Tyres and it costs approx £68 per week. I usually use free charging at the local supermarket most days (due to lockdown) so it is an amazing deal IMO. Naturally costs will rise when the government sets plans to recoup losses in taxation but until then, I am a happy driver with a wonderful vehicle and cash in my pocket!
Hey LeasePlan! Why doesn't your website have a filter for Fuel Type? I went there after this episode to check out some EVs but you didn't make it easy. Fire your marketing team! They should have sorted this before you got exposure on Fully Charged!
Fun fact: 40% of Network Rail's (Britain's largest electricity consumer) electricity costs is tax. So yeah we're in the tragic situation where our electric trains are taxed on their energy source but fossil fuel burning planes are not.
@@iareid8255 ~50% of electricity generated in the UK is from renewable sources and growing at a steady pace. Not sure on David's claim about Network Rail. For starters, business rates are 19%, so that leaves an additional ~21% unaccounted for. And, is it on electricity anyway? 100% agree with him when it comes to planes, though.
@@TheKorusuk I think you will find that 50% is far higher than the truth. The one fairly consistent generator is the inaccurately categorised biomass. It counts as renewable but it is a very high CO2 emitter (The highest). We cannot run our grid without fossil fuels, we can without renewables and we would have a far more stable and reliable grid if thu8at were the case.
Mr Jizz, it's impossible to run the grid without fossil fuels generation for two reasons. One, is that nuclear, wind and solar cannot load follow so fossil fuels which can, will do that to keep the grid in balance. Two, it is necessary to have sufficient spare capacity to cover when renewable output is very low (> 10% demand and sometimes much lower) that occurs with regular frequency. Conceivably biomass will also do that but that is very CO2 intensive, as I said. (Worse than coal) Chopping forests for power station fuel is not a good idea at all. As of 8.30 am today, gas is providing six times that of bio fuel. So that would need at least five further Drax bio fuel stations. I forget how many tons of wood pellets Drax uses per day but it is a very large amount, brought over from the Americas. Google will give you an idea.
EVs are accessible and affordable by many and this video explains some of the popular options to get yourself into the (likely new) EV you're after. This is a really informative video and worth the time. With regards to fuelling, offsetting the costs against an ICE car isn't really as easy as all that. It's much like saying "if you stop buying your coffee you can afford this iPhone" and this is true for any purchase. Looking at the total cost of ownership is important and funding any additional cost, critical. The point is that for many people, your £1 goes further as it will be taxed at a reduced or 0 rate. If you are leasing an EV personally, then the incentives are less and you really only have the "how much does it cost to run" metric left to compare to your current vehicle. Much depends on your employer for sure. But the entry point remains high as with any new product with a 2nd hand market still in its infancy. To answer the taxing electricity; it's quite simple to do as many chargers talk to their manufacturers' central database. It would be trivial to find out how much of my home usage is going out of my charger vs. into my home/office. I agree that tax should be about road use - but how you use the road, not mileage based. They need a wear metric so those that do the most damage pay more, possibly with a vehicle type or weight multiplier. Centrally held, distributed fairly, to avoid density/rural issues.
Every time Australia is mentioned it’s because of how shit we are with EV legislation etc... I totally get it, but it’s a downer. Yesterday there was news that Canberra (ACT) are looking at having EVs be registration free. No fee. It’s the only positive news we’ve had regarding electric vehicles and I hope we get more soon.
As an Australian with a roof full of solar and looking to get an EV in the next 6 months it makes me despair thinking how backwards we look to the rest of the world when it comes to clean energy and EV motoring...
Never mind Simon, just keep pushing. I just wish I could import some of your sunlight...I'm in Scotland, I could sell you some rain though. How about some swapsies?
Califorina we pay a lot of tax on gasoline and there was a move to make what was called the Road Charge Program, they charge you how many miles you drive your vehicle. My e bike is looking better all the time, its paid for, it doesn't use much electricity its doesn't go far but to get out of the house or run around the corner for quick errands for essentials (quick stop at the market, pizza, tacos) its great. I think I drove four thousand miles last year. I work from home and have most of my stuff delivered.
You do not pay a lot of tax on gasoline, you just pay more than the rest of the USA... google suggests you pay about $3.50 per US gallon.. which is approximately half the cost of the UK, we pay more in duty than you pay in total... plus 20% sales tax
@@mralistair737 its more like 2.95 a gallon, its 50-60 cents tax, the state raised the gas tax to improve roads and infrastructure I still don't see any improvements, Neighboring states are typically a a dollar or more less per gallon. I know in Europe you pay a lot of tax on fuel I was an expat and lived in the UK for a few years and know about it myself. That google price is probably an average the big name providers like Shell, Mobil, etc all charge more I drove by them this morning and 87 octane which my car runs on was around 3.13 or so, 3.23 if use a credit or debit card. I go to an independent station no fees for using a card or using a mobile phone payment. its 2.95 per gallon
I agree with the comments on older LEAF's and would add a couple of points. Businesses are starting to higher capacity batteries from accident damaged vehicles, with small modifications even the latest 62KW pack will fit completely rejuvenating the car. There is demand for older batteries for use in household solar storage, especially now the feed-in tariff for new solar installations is approx. 5p per KWH. This, I estimate sets a floor on the value of older LEAF of at least £2-3K.
That was fantastically informative, thanks Robert and Fully Charged!!!! Now, would you be so kind as to do an episode on the best deals for individuals to lease a car from? Like rating companies?? Or at least tell us where we can go and find this info??
The whole discussion about “the party that introduces the road tax will be out next election” is the exact reason why Australia introducing it now makes sense. There aren’t enough EV owners to make any difference to the voting and once it’s in place people will just accept it as standard as EV numbers increase. As far as I’m concerned, being in Australia which as you mentioned has no EVs to talk about, the Gov would be smart (haha, I know, I know) if they introduced the road charge as they also introduce tax breaks. This would be a carrot and stick approach for those getting into the EV market. We’d finally get a bit of a break on the incredibly high (in Australia) purchase prices of EVs to offset the downside of not being able to drive on the roads for free. For myself, I have no issue with the km charge as I want to be able to drive my EV (if I can ever afford one) on decent roads and I realise that that has to be paid for somehow. When I register my car each year, just give me a box to fill in my current odometer and let me know what I owe in addition to the rego. Pay per km will be the fairest, pay for use option in my opinion.
There is Vat on our electricity Robert, but what’s more interesting is that the BIK is calculated on the full cost of the car, including VAT. So Fishi Rishi, is taxing us on tax. Luckily we’re at zero BIK and it won’t rise much but when we were all in dirty diesels we were paying 20% on the Vat. As for “how can we pay tax on our electric” why do you think government funded home chargers MUST be smart chargers. Big brother already knows how much electric goes in your car!
With the technology in new cars it would make sense to have embeded software for Micro Tolls via GPS. Each road maybe costs $0.01 and you pay for each street you use. Best part no physical tolling infrastructure needs to be installed to enable every road to be tolled, and current physical toll infrastructure can be phased out. Whole trip costs would be able to be calculated energy cost, tolling cost, estimated car maintenance contribution so you know the true cost of your journey.
I always bought second hand, likely alway will. The depreciation value of the car is alway way over estimated I feel by people who push you to least/rent/pcp yes I think buying brand new to the first year you loose a lot but after that cars don’t drop in value as much as they like you to think. I usually buy a car that just 1 year old so it still has garage warranty so I know It won’t have any big issue for the first 2 years and sell it in 5 years time the money i lost on depreciation I always found to be not much, say £3,000, most leasing, rent, pcp for 4 years you going be ending up paying around £5,000, and got nothing to show for it. I still got a car that I sell or part exchange.
so you get paid £2000, so £100~ for the effort of doing this yourself. a £3000 loan cost about £45 a year so £135 in interest saved. so about £49 insurance to guarantee the car is worth X at the end off off the lease period, no questions asked. Sound like you are happy to take the risk because sometime you make more. I commend but just realise its not no value to leasing.
@@simonhenry7867 Cash is king, BUT, if you have other debts to pay, cant save up the money, need a car right now, and want a better car than you can really afford, then leasing or pcp is the way to go! I just want the point out people forget that at the end of these deals you dont have a asset to sell or keep (plus things change in you life, you loose your job, cant keep paying you loose the car, that another big advantage, I know a friend who lost work due to this covid and had to return his car. if you own it you dont have to worry about this)
While it's true that there are different regulations throughout the world, the basic problems of taxation and road usage remain the same regardless. It's good to see a program that's discussing the issues in an open straightforward way regardless of where it is.
If you could get a lease that is flexible on the milage, when you find you can't drive anywhere that would make them more appealing. To compensate they could have a standing charge element.
I've been investigating leasing a Tesla for a while now. It really isnt worthwhile private leasing, the VAT doesn't impact cost at all seemingly, and the estimated residual is off imo. So not worth unless your company offers leasing. Also worth noting, a lot of these lease companies don't offer decent leases unless you're over 30.
I agree, in Norway a Tesla Model 3 if you finance it for 3 years you only pay 0.25% interest. With a decent downpayment you will pay less monthly than leasing, pluss you get to keep the car.
If the HMRC restrict business mile expenses to a flat rate of 4p a mile, owner drivers will be funding the difference between the 4p and what they have to pay out on the road where rates can reach closer to 50p
thats unlikly so its about 12p fuel and 45p total so 30-35p is slated maintinence, deprication wear and tear. so if they go to 34p the lowest you could expect.
Thank you for making this very informative video. It helped me to understand the picture much better. Leasing might not be for me at the moment but I look forward to picking up the cars coming out of the leasing fleets in a few years time :-)
I bought a Kona in Canada for $40k. The average price of a new car in Canada is 36,000 dollar. so i think it was an affordable car. I am going to keep mine for ever and just lik Robert it was my first new car I ever bought and I was 58 when I bought it. Cheers
I own the car I currently drive, but I have leased in the past. For me, the leasing experience had one major drawback that was not covered in this report, that is the arbitrary assessment made at the time the car was collected from me as to whether I would be charged some (unknown to me) amount for wear and tear. I had no real idea how this process would happen and what sort of amount I might be called upon to pay. As it happened, the car was collected without any charge to me, but the worry was still there. I accept that the valuation of a trade in car will take account of wear and tear, but at least I have the option to go to another dealer if I do not like the trade in price on offer. With leasing, as far as I understand, you have no option but to pay up on the assessment of the person sent to collect the car - in my case a couple of people from a local car auction company. Perhaps RL might like to comment on this aspect of leasing
Amazing video. In Portugal LeasePlan renting service on a Kona Electric 39kw for individual owners cost you...757€ + tax (23.5%) Absolutely ridiculous price.
Here in Germany, corporate cars supplied to employees are something very different: either the employee is keeping records for any trips to be taxed more accurate or (more common) pays 1% of the cars full list price plus a fixed rate per month reflecting the one way distance between home and office. For EVs, plug-in hybrids and fuel cell cars, the “1%” calculation is based on half of the cars list price, making those cars a much cheaper option for the employee. Leased corporate cars are being swapped after 1-3 years for a new car, which provides a substantial supply of “almost new” cars to the used cars market. About 11% of cars in Germany are corporate cars, so this should be an attractive idea for EVs, eh? Not this fast. Corporate cars are usually equipped with a petrol fleet card to have the company pay for any fuel, oil, car wash or maintenance (in regards to taxes, those costs are seen as operational expenses and can be deducted from any other taxes the company has to pay - and some companies are very eager to get those deductions). Yes, there’s little reason to save fuel with such an system and this “the company, ehem taxpayers pay your fuel bill” makes corporate cars very attractive to employees. While a charge card for public charging stations is still an option for EVs, most EV owners do prefer charging at home- where the employee has to pay for the electricity bill, unless they have an electrician install a separate meter and have the employer pay that bill (which is way more red tape than getting the monthly bill from the fleet petrol card). And those who don’t live in their own houses usually don’t have the option as well to either charge at home or install a separate meter. Another option were to charge at the office and have a charge card only for any non-commute trips - which would require the employer to install some expensive charging stations in their parking lot, upgrade the electric cabling across the parking lot and so isn’t that attractive to the employer. As plug-in hybrids are also being calculated from half of their list price, they’ve become quite popular over the past few years. However , there’s a serious problem with that: when the leased car is being swapped after a year or so, the dealer often discovers the still sealed charging cable in the trunk: the car has been running on petrol only, due to the convenience of the petrol fleet card and inconvenience of the small battery - in addition to paying just half the price than a conventional petrol car. So: it’s not just the cost for the car, there may be many more issues to decide on which kind of car…
Another great video - but bear in mind although you can claim back 4p per mile (just about covering home charging costs), recharge rates away from home are typically 30 p per kW... which means if your 77kW battery gives you ~200 miles of realistic range and your meeting is ~200 miles away, it will cost you 23 quid to recharge away from home... BUT you'll only get 200(miles) x 4 pence = £8 back from your employer. So you'll be out of pocket by ~15 quid if your business trip is ~ 200 miles away (because you'll have to recharge the 'expensive way' for your trip back home!). Still better than ~£500 / month BiK for a diesel Merc or Beemer, but remember that you'll be funding your long distance return trips out of your own pocket unless you are lucky enough to always find fast, free chargers !
I recomend EVM he's done multiple videos on UK network. Short story it's getting better but the Supercharger network trumps all (not the case in Wales)
Before I ended up with my gently used 2016 Kia Soul EV+ (only had 17,000 miles on it!) I saw an ad for brand new Hyundai Ionics for only $99 a month (to lease). But when I called the dealer they said they had already leased their entire allotment: One. Granted, I'm in a non "compliance" car market so I guess it should be expected. (Absolutely LOVE my Kia, by the way, which I bought without ever having driven or even sat in it. In fact, it was the first EV I had ever been in when I bought it. No regrets!) [edit: I'm in the USA, not the UK]
The subscription-based model is also very interesting too, Would be nice to have all the equipment from say tesla like the roof on your house and the powerwall and a car you need and use the passive income the roof is meant to generate to pay off the cost of the equipment there needs to be more helpful for the people to afford the cost scrappage deals would also help
To cover road taxes my state made the licensing fees for ev vehicles $1250 for fuel vehicles its $195, this is paid every 2 years, making leasing even a more valuable option.
I will never understand why private individuals think leasing is more affordable. It is not. Financing and owning is far less expensive. With leasing you will make that payment forever and never have any equity and will never have anything to show for it. You may as well be flushing that money down the toilet. Buying will immediately get you equity, and you have the option to keep the vehicle long after it's paid off and have no payment at all. That car will *always* have *some* value, even if it is wrecked or not driveable. The reason dealers, financers, etc. tell you to lease is because it makes far more money for THEM, not you. And any individual who says they have done better financially has not actually crunched the numbers and is accepting the word of people who do *not* have your best interest at heart, regardless of what they may have fooled you into believing. All that gibberish about depreciation and resale value is lies. If you subtract the resale price from the purchase price and divide by the number of months you've owned the car, the net payments, and by FAR the net cost to you, will be much less. The situation for businesses is far different because the tax situation is much different and they can write off the expenses. Private individuals cannot do that. Leasing was originally created for businesses. Wealthy people to whom cost is no object started leasing because it was just the easiest way for them to get the new model every year, and they didn't care about the expense. Then Dealers and finance companies started talking ordinary people into it because it is far more lucrative for them and more expensive for the customer. You don't believe anything else a car dealer says (or you shouldn't if you do), but you'll believe this? 🤔 It beggars the imagination! 🙄
Aren't you paying VAT on your lease - of a car that is cheaper because you're *not* paying VAT on the whole value of the car...? And the lease-price (pre-tax) is only the estimated depreciation of the vehicle over the lease period (plus a little extra as profit), so as EVs aren't depreciating much atm (less than ICE vehicles, anyway), your lease will be smaller, and thus so to your tax bill.
But the VAT saved is the difference between the costs of leasing compared to cost of purchasing over the same least period. Not the full 20% VAT on the full purchase cost of the car.
"can't distinguish between home electric use and EV use". For about 80 you can add a meter to your home Electric cupboard for the car circuit. You can then claim that back if its a company car.
I'd like to see a comparison of PCP vs lease, whenever ive looked up prices they ain't that different in price and at least I've got the option of buying at the end,when I've essentially paid for about half of it. I don't need a new car every 3 years, leases don't seem to suit me, this hasn't convinced me.
You also get the difference between planned value and actual value of the car back at the end of PCP if you give it back, not the case from my understanding of a lease
It's good to see this video acknowledge that the vast amount of tax currently levied on ICE vehicles is going to have to be borne by EVs in the near future. And none of this is to criticise the video, because I think it's the first one I've ever watched that mentions this elephant in the electric room, so well done. I agree that road pricing would seem the fairest way of achieving this but as you mentioned, this is super unpopular in the UK at least. The alternatives must either be to hike the flat-rate road tax, or to tax the electricity. And I'm not so sure that electricity couldn't be taxed somehow. When we're all running EVs probably the majority of household electricity consumption will be for car charging, so the government might just introduce a flat additional tax rate on it. Or adopt a system similar to the one used for taxing diesel used for pleasure boat. That assumes most of it is being used for propulsion, so it attracts the same tax as road fuel diesel, but allows a small proportion to be exempt from this tax on the basis it's assumed to have been used for domestic purposes on the boat (including to generate electricity, ironically enough). The same could be applied to household electricity bills. Probably that would be more unpopular than road pricing, but my point is to agree with the other comments who point out when it comes to imposing taxes, where there's a will there's a way!
Fascinating video, going to forward this to our fleet department as I'm fed up paying a small fortune in bik to have a company car. The salary sacrifice option sounds interesting though, need to read up more about it.
I’m leasing through my Salary Sacrifice scheme; a £50k Polestar 2 for £80 a month cheaper than my previous car - a BMW 5 Series Touring, which was priced at £44k 😊
I've done the math, and in the Netherlands it's actually about 30 percent cheaper to outright buy a new standard range model 3 without options, then to lease the same car, if you want a new one in 3 years. This is probably because deprectiation isn't as bad on EVs. Mind you, I'm talking monthly costs. Obviously it's a huge investment not everyone is able to do. But if you can, this particular case works out to be cheaper to own than to lease.
LIKE if leasing could be for you and SHARE to tell employers about EV company car benefits
Whilst the cost of electric cars are definitely coming down, for many people, leasing is the most affordable way to go electric.
In this episode Robert speaks to Matthew Walters from LeasePlan to find out why employers and employees might benefit if company cars were to become electric. If you're baffled by phrases like 'benefit in kind' and confused by the taxation costs of EVs, then hopefully we might be able to help answer some of your questions.
With more leasing options available and competitive rates for both businesses and individuals, now could be the perfect time to make the switch to electric
LeasePlan - www.leaseplan.com/en-gb/
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Timestamps:
0:00 Makes (EV leasing) sense
2:16 Can't afford an EV!
2:53 Benefit in kind explained
4:16 EV taxation
5:19 Salary sacrifice
6:33 Energy rates
7:13 Tires & screen wash
8:07 Individual leasing
9:25 Risk limitation
11:42 Don't buy new
12:56 Increase the lease
14:10 EV 2nd hand market
14:49 Battery re-use
15:59 Battery degradation
16:45 EV future
17:33 EV road tax
19:31 Road usage
20:25 Company charging
22:25 Learnt stuff?
22:56 Subscribe, support, join
700k subscribers, hundreds of patrion's and he is still crying poor? LOL.
@@davefroman4700 Thanks Dave, but as hard as it might be to believe, the channel is surviving by the skin of its teeth through this pandemic.
@@davefroman4700 those numbers would be great for one person. But have you noticed that fully charged is a team of people? People aren't free and nor is travel, and gear.
This kind of leasing (renting) includes a monthly fee, defensive residual value, monthly rent VAT and maintenance margins (and in the end you don't own the car). New EV taxations all over Europe will be based on the acquisition costs and will in a given moment (as soon has new EV sales surpass ICE sales), artificially revalue EV cars sold before. So for now, it may be better to obtain EV's ownership (either through leasing, credit or direct buy).
My model for motoring has been, pay about £4K for a decent second hand car, make it last at least 10 years. All I (and many others I suspect) can afford. This sort of monthly outlay for a car I don't end up owning, is I'm afraid a non-starter for many...
A fantastic episode. This needs to be mandatory viewing for all public service Chief Finance Officers. EVs now make good business sense
Greetings from Denmark. 90% of my electric bill is taxes.
@@alanrobinson2229 program says it's "very very specific for UK" in 22:28 , you know that one outside EU as well 💪👌
@@javim2589 try our crap government, careful what you wish for.
@@alanrobinson2229 he makes his own with solar panels. That kind would be difficult to tax especially as he keeps it in a couple of batteries. However the point is that it is difficult to separate domestic use from motoring use with there being few ways of determining what you are using it for. As the hemp growers know.
@@rbdogwood Germany managed to sort of tax your own energy from solar panels.
Under Germany’s renewable energy act, renewable energy sent to the grid is being paid at a fixed rate for 20 years after installation, and the difference between market price and fixed rate is being paid from a special fee, which is received from anyone consuming grid electricity (yet some types of high consumption companies are able to reduce their fees to very low or even zero so they’ll be still competitive on their international markets). The fixed rate is often very interesting, effectively paying off the solar panels in 10-15 years, while the extra 10-5 years are net profit for the solar panel operators.
However, a few years ago, the German government decided to charge the same fee also from anyone consuming their own renewable electricity. As it’s very attractive to send your power off to the grid and your net power production is also available, it is fairly simple to calculate that extra fee/tax: the meters are already in place.
Luckily, the German government just this year decided to stop doing so for smaller renewable energy systems (such as typical solar panels installed on many home roofs).
About 52% of the average consumers electricity bill is various taxes and a fee covering said subsidies on renewables, another 23% are grid fees and just around 25% are production and margin of electricity.
Oh, and in terms of taxes on electricity: Germany does also have a special electricity tax (“Stromsteuer”) , but also charges VAT on the electricity bill. So one is also being charged VAT on 75% of other fees and taxes…
So, yes: taxes on electricity did exist until very recently, including taxes on power from your own solar panels.
@@rbdogwood difficult != impossible
This guy has impressive knowledge - and knows about the trends!
Good start of that conversation. I could poke lots of holes in this but that wasn't the point of this video. It was making people aware that there are options and discussions going on to solve this issue. Again, a good start and thank you.
80% of the comment section is obessed with "you cant tax electricity" meanwhile im thinking "can Robert honestly not afford a Model 3?"
Edit: Surprised at the debate this caused, and this is meant in no way as a dig in Robert. It was just me making a semi-cheeky comment, and i know its a lot of cash for anyone to have sloshing about. Ive half mind to delete it, but i also think its rude to cut people off mid conversation
Exactly. Who is he trying to kid?
I think you’ll find that small RUclips channels and that’s what we are, make next to no profit and during a pandemic much less.
@@fullychargedshow Where did his Scrapheap Challenge money go? I loved that show!
@@stephenholland5930 wow, people really think he's mega rich... I mean he was on a moderately successful famously low-budget scifi show. the point i think he was trying to make is that who has £65k in cash just sitting around, not in your house or your pension or whereever.
@@mralistair737 Model 3s are not £65K.
Leasing pitfalls: Always read the the small print of the contract terms and conditions. Leasing a vehicle means that you will have to pay a non-returnable deposit at the beginning of the contract term. This can be the equivalent to one to six months of the monthly leasing fee. The contract period can be between 12 and usually 36 months, but monthly contract fees increase sharply for short 12 month leases. You DO NOT build any equity through your monthly leasing payments, and leasing is a service contract and therefore subject to 20% VAT on top of your monthly contract fee. Business users pay the VAT on the monthly leasing invoice and reclaim the VAT payment as per other business expenditure. Personal leasing users cannot reclaim the VAT portion of the monthly leasing fee. Leasing contract fees are also subject to user mileage restrictions. The more miles covered, the more expensive the monthly contract will be. For example at time of writing a Tesla Model S Performance, Ford Mustang Mach-e, and a Renault Zoe all without options, on a 36 month period contract with 10,000 miles per annum coverage and three month up front deposit are on average £970, £450 and £275 per month including VAT respectively. So not quite as cheap as you might expect. On top of this you will have to pay your insurance, charging costs and vehicle consumables such as tyres, windscreen wipers, service lubricants, and service labour costs if not included in the leasing contract. Check your insurance carefully. If the vehicle is a total loss or is stolen and I recovered, then the leasing company will expect full MSRP of the vehicle plus the cost of options, regardless if they actually purchased the vehicle at a trade discounted wholesale price. Your insurers on the other hand will only want to pay current market value, leaving you as the lessee responsible for the gap in between the the two values. This is why your insurer recommends GAP insurance on lease vehicles. When the vehicle is purchased from the manufacturer it will usually come with a 2 to 5 year free servicing plan, so make sure your make and model benefits from any manufacturers servicing deals. The contract will state that the vehicle must be serviced at the correct intervals by an authorised agent, otherwise you as the lessee invalidate the lease contract. Return the vehicle in pristine condition with less than the agreed mileage, and the leasing company will slap you on the back and will want to put you into your next more expensive contract.After all, you have just paid for the majority of the whiles initial depreciation, and the leasing company can trade the vehicle at a premium price, but not actually share the reward with you. Return the vehicle with even minor interior and exterior blemishes and the leasing company retain the right to fix all issues and send you the bill. Leasing companies will verbally say that their contracts include fair wear and tear, but in reality this is a fallacy. Be warned, leasing companies are just another finance broker and not vehicle manufacturers. They arrange low rate commercial banking finance to purchase vehicles in volume, and often purchase vehicles that manufacturers old stock, so your vehicle could be two yers old even though it has not been registered. This is why your chosen make and model is often not available, as leasing companies make very little money on one off orders, and want you to lease whatever they have in stock. I hope this has helped the audience, as the interview with Robert on leasing seemed like a patron advertisement.
God yes... The company I work for has a fleet, who are quite kind. For equipment, another leasing company supplies... Loxam. The foreman takes photo's of the machines so they can't double (or triple) charge repairs.
Leasing companies are like banks, or Danish taxes ;)
Yeah 'dumbed down' didn't come close! Robert sat there open mouthed, saying yes and no at intervals as some dodgy salesman told him how great everything was........!!
I’m waiting delivery of my Vw id3 on a salary sacrifice lease. I’ve done the maths and it was far more beneficial then spending £6-10k on a second hand ice car
Id3 private lease is 550 euro per month here in holland. That’s expensive
Good move Iain. I’ve been driving electric for 6years now, on salary sacrifice lease. Have saved around £500 per year against the cost of an £8k used car, and have been driving a brand new reliable, comfortable and clean car too!
Hiw can a 8k car be expensive than an than a id3 if you can’t charge at home plus public charging cost of €5,50 per 100 km?
@@jdnrotterdam2150, with no Benefit in Kind tax and road tax to pay, no servicing costs, very low maintenance costs, electricity at 1/4!(or less) the price of fossil fuels, no congestion fees, and doing 25,000 miles a year - I’m saving money..
@@chris220480 but if you can charge at home you have to py €5,50 per 100 km
I appreciated him acknowledging up front that this was about UK leasing. Too often EV channels use examples specific to one market, seemingly ignorant of the differences. For example, the huge differences between type-2 in Europe vs. level-2 in North America as but one of many examples.
I’ve always bought and held my cars for a long time, usually second hand from about £5k or so, I can’t imagine being better off spending hundreds per month every month for a lease
This is more for people who want to drive new cars, not old bangers
That video will come in ten, 20 years time. At the moment, there are no EVs with a sizeable range over 5 years old. This video is for now. I predict the number of people leasing EVs to increase over the next ten years. Then, when the current generation (Kia eniro/ kona / telsa 3/ new leaf) are 10, 15, 20 years old, and cost about 5k, the leasing portion will drop significantly.
Have you looked at any leasing company websites to see how much it costs to lease an EV? It might be worth checking some out.
Remember that the cost of your fuel is much cheaper if it’s an EV. Also if you drive into London then the congestion charge and ULEZ charge are not applicable saving loads of money each week/month etc.
Ive seen some leafs for 6k and some zoes. Which is a great option. Keep it for a year. The depreciation will be small. Sell it on. Get another. It would workout at something tiny like 40 quid a month. No road tax. Super cheap electricity. I cant wait for more rich people to buymore evs and sell them on.
By the time bangernomics EVs are knocking about the market, I’ll probably be too old to drive the damn things🙄
Super helpful, lots of comparisons to where I live (Canada) and as the UK leads the way in Electric Vehicle adoption it's interesting to see what options for businesses might be on the horizon for Canadians. Also super grateful for our low electricity prices here...thanks to all the Hydro dams :)...sadly this coupled with low gas/petrol prices means people are slower to adopt to an electric car...but it's happening :) slowly but surely....fabulous video thank you from Victoria BC :)
This is a great channel Robert. Keep up the excellent work. I found this particularly useful as I’m thinking of buying my first EV and leasing it is a strong contender.
When he said “they can’t tax electricity” he means they can’t increase it now or in the near future by a large proportion. Because dear old lady up the street who doesn’t have a car and never will, can’t be taxed 80% more for putting the kettle on. People just won’t let it happen.
Road pricing is the way to go, it just needs to be priced right
I was thinking perhaps a tire tax, but even that may be hit or miss with online shopping for tires.
Whatever money governments are getting now from fuel tax will have to come from somewhere else in the future. That is guaranteed. Period.
Australian state governments agree
Oh my goodness, this is so appropriate a video. I am about to sign the documents on a VW ID.3 for 3 years until the Tesla Compact/M2 comes along. I can't justify a Model 3, but I want to make the change.
Fantastic decision, congrats and welcome to the EV revolution! I made a similar choice with buying an old 2nd hand low range EV a few years ago, then saved up until I could afford a Model 3.
I got a Model 3 despite not really being able to afford it and haven’t regretted it (other than the downturn in income due to covid)
As I understand it, in the UK the DVLA record mileage through the MOT, so we record EV mileage for vehicles with a green reg plate at MOT and tax through that system and bill through what is ICE road tax system, simples.
i dont earn enough to lease even an old banger and yet i'm watching this. just damn good RUclips Channel this!. love it.
Bravo, I was thinking of leasing my first electric car, so your show was very helpful!
I also feel that there is another huge advantage in leasing in that EV’s are evolving so quickly with
Better batteries, self driving, self charging and overall comfort, if you don’t lease, you might get left
Behind! I’d like to have the advantage of the latest and best technology!
meanwhile...i just bought an e208
paid in full :D i regret nothing!! id rather OWN it and know its mine than rent it
This. When you hand back a leased car 100% of what you’ve spend is gone. When you own and sell the car it off, (so long as deprecation doesnt fall off a cliff) you’ll find you’ve actually spent less.
@@Bobbydyland more like... when you hand it back they sting you for every scratch and pimple... then you have less than nothing!
Agreed after the first lease you'll end up out of pocket, especially with the residual value of some EVs
I'm glad you addressed the second-hand post-lease market. If we are to have a proper take-up of EV's we need the second hand market to be decent, which in turn means that Corporate fleets need to go electric as they are one of the main sources for the second hand market.
How to tax road usage - Fit a tamper proof odometer and extract its data at MOT time, you pay for your MOT and your annual travel fee @ £0.0x/mile travelled.. the garage act as tax collector.
See New Zealand for details...
Here in NZ diesel cars fuel is "tax free" and the owner then buys RUC (road user charges) per 1000km up front so say $1000NZD for 14000km (about a year). EVs are RUC free until Jan2022 then we pay RUC but we dont know at what rate yet.
Great point raised, and great chat. Thank you Robert and Fullycharged for the info.
Superb video. Clean, clear and calm. As a company director that just picked up a Twizy (with an eye on a Tesla later in the year! 🤞) this confirmed what research I’d done, and taught me about the fees for having a charging point at the office. Thank you!
People are going to jump on me for this, but hear me out: Tires! Tax the tires. If there ever was something we buy that’s a clear indication of our individual wear and tear it’s tires! Put the tax on a sliding scale based on load and speed rating and tire price, then set up a 4 year payment plan and BANG! Every time someone buys tires they are simply billed by the government for the damage that specific type of tire will do to the road over it’s expected lifetime. When you buy a new car make it a line item on the bill of sale. Used cars and used tires are exempt unless of course a used car dealership installs new tires on a car before selling. Or transfer the remaining tax payments to the new owner, whichever floats your boat.
With that now you have a use tax that is implicitly based on vehicle worth / weight / sportiness and distance traveled without ever having to actually go and verify which type of car, it’s actual value, or actual distance traveled.
Well, the problem with this is, the Government already are taxing the selling of the tires and the rest of everything they can! So that mean they be taxing not only the sale of them but then the using of the tires too?
And if they say tax the use at, 10% per every Km per EV. They would be making sheds loads of tax on the millions of cars possible in the UK.
So that be say 10% on the using of the tires plus the 5 or even maybe 10% on the sales of those already pricey to buy tires. I sure the Tax man would be over the moon?
Then add the tax on the Electric they already charge for now when we the non rich without solar panels have to buy electricity from the greedy power companies.
And you be seeing tons of money made by the lovely caring tax man.
Nice idea you did put forward but have too many faults.
Remember this thought,
You got to be very well off or rich to afford the solar panels needed and the power wall needed and the upgrading of your consumer electricity fuse board and also the south facing roof fancy house, to be able to benefit from the tech and the money saving on electricity used by your lovely house!
If your poor you can't benefit from any of it as you can't afford to buy even one bit of it. you can't even afford to buy a e-bicycle ( £3000 upwards for it ) to make your life easier traveling locally, Never know a lovely top end EV done by leasing or buying it.
@@colincampbell3679 I don't see a whole lot of reasoning in your comment, just blustering about already being taxed too much, so let's throw some reasoning at the problem shall we?
1) The video makes clear that tax structures will need to be reworked in order to pay for the damage done to roads by EV's. Why? Because the current tax structure relies on a massive gasoline tax equivalent to $2.99/USGALLON (I live in USA, deal with it). I'm going to point out right now that you pay more in taxes for gasoline than I pay for gasoline. And to think I thought gas taxes were high in these parts! Let's put this into numbers. A 2021 Mazda3 S Hatchback gets "combined" 29 miles/USGal. At the current tax rate, you pay $0.10 per mile in that car. Now, I don't know what your electricity costs are. I live in coal country, so if I were paying 5% tax on electricity like apparently you do that would be about $0.0085/kW-hr. If your Tesla Model 3 gets 250 w-h/mile then the tax is $0.002ish /mile. That's right, electric car folk pay 2% the use tax of ICE folk. Totally fair, right? But let's keep going, because you said something about taxing the poor! The Tesla Model 3 base price is 70% higher (in USA) than Mazda3 AND it weighs up to 1000# more. That's a later point though, so just note if everyone went EV and tax structures weren't completely reworked UK would lose 98% of tax dollars related to the fuel powering the vehicle. If you want the roads to be like they were in the 1920's that's how you get roads like they were in the 1920's.
2) The gas tax, any flat rate/km tax, or energy consumed based tax will be woefully unfair. That is, it is a tax heavily weighted towards the poor. I will explain: consider damage to the road by your vehicle. You can't see it until it turns into a hole or crack but every time your vehicle passes over road it does damage. Now, the funny thing about damage and material properties is that the relationship between load and damage is NOT linear. If you double the load, you may increase damage an order of magnitude. This means heavier vehicles are WAY WORSE on the road than lighter vehicles. Compounding the vehicle mass to damage per mile ratio is the fact that as a vehicle gets heavier it actually becomes more fuel efficient from a ton-miles/gallon standpoint. This means TAX DOLLARS PER TON-MILE SPENT IS INVERSELY PROPORTIONAL TO FUEL MILEAGE. Drive a Mazda3? you're getting up to 44 ton-miles/gallon. That 40 ton class 8 truck next to you? It's getting above 4.5 miles/gallon, or 180 ton-miles/gallon! Taxing a vehicles fuel or energy use tilts the burden of funding roads to the poor. These are folks who not only are buying older, less fuel efficient vehicles, they are folks who will also be forced by their economic standing to purchase smaller vehicles than a more well to do family of the same size would, meaning they wind up paying the highest tax rate per ton-mile of their vehicle.
TLDR; The second point illustrates how fuel use based taxes or pure mileage based taxes shift the burden towards the poor and allow the rich to get away with their excess damage. By re-structuring the taxes of something indicative of a vehicle's road load, like tires, to make up the difference and replace altogether fuel tax the burden is shifted to the appropriate people. Imagine a world where after buying tires a tax form were sent to you and the government and over the next 4 years you payed a marginal tax based on 1) Tire Price, 2) Combination of load / performance rating, and 3) Income of the buyer. You can assign the tax appropriately and shelter those who need to be sheltered while gouging those who need to be gouged. Worried about rich folks buying cheap incorrectly rated tires? Well, if someone rich were to get into a crash and it were found out they had an inappropriate tire for their vehicle there would be repercussions. I'm sure there already are. Also, using tires of lower weight and speed rating reduce peak loads over bumps thus resulting in less road damage for a given vehicle. TAX MAN STILL WINS!!!
Instead of a tax on milage where people have to waste time filling out forms etc . Adding a tax to tires maybe a better alternative.
done during WWII, rationing/extra tax - seems to force longer term thinking/planning - people less likely to waste trips as tires were difficult to replace - save tire wear
That makes a good deal of sense, in many ways. The purpose of the fuel tax is to simulate a use-tax, and tire-wear is related to road-wear more directly than anything else. It would incentivize smaller/lighter vehicles similarly to how the fuel tax did. And as the grid gets cleaner, tire residue is going to be an increasing proportion of the environmental cost of driving, and this is a way to incentivize making less of that.
An interesting concept about shifting the tax to tyre purchase... I would include a short weekend break by car to a country not running the same tax regime i.e. legitimately buy your tyres with less tax. The current ~70% total tax take via duty and VAT on petrol in the UK when equated to a tyre would be in the order of an eye watering 700% Tax on Tyres (back of a cigarette packet calculation on a car doing 10,000 miles a year, 40mpg, single drive axle car with 20K mile tyre life on drive axle, 30K mile on non drive wheels, current tyre price of £100 each).
Excellent suggestion
Good idea, proportional to road use and vehicle weight and therefore tied to road damage. It would encourage the development of tyres that wore less and lasted longer, discourage bad driving and cut particles. (Would probably boost the security wheel nuts industry) I think badly maintained roads would get more attention too, as drivers with a pot-hole damaged tyre would soon remember what Road Fund Licensing was originally intended for.
I was just considering either buying or leasing an EV. In the end I went with buying. I found the leasing terms a bit too restrictive. My bank had a decent loan deal for EVs which made the monthly payments and total cost quite reasonable. And in the end I'll have the car
I get that businesses can claim back VAT, but they also recharge it on sales, ie leases. Also not a fan of leasing, they are middle men who require a profit to cover their admin and staff, which the end customer is paying for. And that's before excess mileage charges and disputes on wear and tear.
In Scotland the Energy Saving Trust has loans for new EVs at 0% over 5 years and recently introduced a similar scheme for 2nd hand EVs to. Yes, a few restrictions and conditions to the amount that can be borrowed and still subject to credit checks for suitability.... I'm leaning toward purchase of a 2nd hand vehicle as excess mileage on a lease is a concern to me along with normal wear and tear interpretation when the vehicle is handed back.
@@richardheasman Difference is that's a loan for ownership. I'd recommend anyone take a low interest loan to own a car over a lease anyday. If you've got excess disposable cash and don't want the maintenance hassel fine get a lease. Wish Wales had those loan offers, would definitely be getting the Model 3 I want
@@barriedear5990 what I took from the video is that the leasing company buys the car without VAT, then calculates lease cost for the customer based on VAT being included. Pocketing the difference. I'd rather buy a car and pay VAT, then lease and give the money to company shareholders.
Great video Robert, the firm I work for is currently going down the all electric fleet and it's all getting rather confusing, reall cleared a few things up , cheers
“You can’t tax electricity”
Government : “hold my beer”.
That's not strictly true more people who have home charging the gov will want a pice of it you need a smart meter the smart meter will know you're charging your car you pay. VAT or something on that .
"hold my Moet"
@@barrieforte2588 it could also be implemented by software car end
The government will increase the TAX on road usage. £x per mile per fuel type
It's already taxed in the UK. It doesn't have the insane levels of duty that fossil fuels do. It will be difficult to do that same kind of taxation because electricity is a basic utility.
Definitely keep this video tagged in your library or somewhere. Relevant information even for people like me who cannot afford to buy a car and want to lease electric
Now, now Robert. No tax on electricity? Your domestic electricity attracts 5% VAT. In addition an element of your Bill is something called CCL (climate change levy). This actually funds some of the subsidies paid to renewable energy suppliers. There’s 2 forms of tax already there, that you probably didn’t know about.
On the subject of leasing, most EV contracts appear comparatively unattractive. They’re all quoted as 9mths up front & 5000 miles pa. Once you adjust those figures to something resembling the real world, the figures are sky high in most cases.
Interestingly EV sales must have slowed. CarWow have lots of offers at present, particularly if you look at pre-Reg stuff. I was even offered £5k off the entry level ID3 last week.
This video is very interesting. There's a lot of great points of view in car leasing and ownership of one. Also for the companies involved. Thanks for the good videos as always.
UK electricity has 5% VAT added.
UK petrol is taxed much higher.
@@jamesvandamme7786 Well of cause it is, but the statement made that electricity can't be taxed is plainly wrong.
@@jamesvandamme7786 Yes, it's around 4.6p per mile which is about $0.06/mile in USD. In the US it's around $0.016/mile. So the UK is about 4x more expensive per mile for taxes. However the US drives a lot more miles so in the end the average US household only pays 50% of the gas taxes that the UK pays. So $250/year for the US and $500/year for the UK in USD. In my state I pay EV tax to account for the fact that I don't use gas and they just made up a number. The guy that did it admitted to making it up out of thin air claiming it "seemed about right" to a newspaper, no joke. The result is I pay 2x more road tax on my EV than my SUV.
@@gregb7353 What's going to happen when huge trucks (lorries, sorry) start hitting the road? And I do mean hit, those heavy tires are far worse on roads than cars.
@@fredbloggs72 He means you can't tax the EV electricity differently to all our other electricity. Raising the electricity tax overall isn't going to suit those without cars and makes your cup of tea prohibitively expensive!
This was a perfect explanation! Great video!
This took me a whole to get to, but I'm so glad I did. Excellent video, thank you.
That is one of the best, most informative videos on RUclips!
@@alanrobinson2229 Damn! Bad news - can it be used to re-arrange the deal? (OK, clutching at straws here)
In my company (in France) we get a card to pay for gas/diesel with our company car. That's a huge incentive to stay with an ICE car. And we are with LeasePlan.
The only channel I give the like before watching...
Great video. I'm out in Oz, so much of this doesn't really apply here. But jealous of all the EV incentives that the UK have.
... one day!
When Robert says no tax electricity, you can just buy solar panels and generate your own electricity!
The government will help fund that
But very few places can have enough PV to power the house and car 100% from their own PV
He’s actually wrong about that.
Nothing is stopping a govt from yearly taxing you having panels outside, whether you use them or not...
@@garrettosullivan8830 I would need to upgrade and expand my solar panels, and I'm in the right shaped house, but I think I could just about manage if I had the right sized batteries and a car to house system. Pre EV I gained 180kWh over my first Spring to Autumn but the company made me change to a non reversing meter, but if I could use the grid as a storage device (as I did then) and maybe a 250 watt wind turbine then I think I could go carbon neutral.
I can see a separate electric meter for ev chargers for the home being a thing. Especially with all the existing smart meters that had be installed. The ev meter could just had the VED per KWH put in to the car, then this could be collected by your electricity provider and passed on.
Im taking delivery of a Polestar 2 next month through the NHS salary sacrifice, had an amazing deal, one monthly payment includes, servicing, tyres, tax, fully comp insurance for up to 5 named people. I could never afford one otherwise. And having a 7kw charger fitted at home for no extra charge.
In my country (Portugal) it's not normal to do leasings normally people do loans to a bank or some financial entity. From what saw in the leasing sites, for me, one of the cons is the limited mileage per year and the prices that are very similar to do a loan but I think for the same price is better to lease.
Looking forward to leasing options being more widespread for EV's in Australia in the near future....hopefully!
If you are going to hold your breath, make sure you breath in deeply. I went down this path in 2017. As soon as I mentioned the word electric, the person on the end of the phone said “No. Stop. We don’t do that”. I thanked him for his time. It was Nissan Leaf, Outlander PHEV or a Tesla model S only. I suppose I can lease a Hyundai now but I gave up trying. Can’t even get hold of a RAV4. I actually wanted to lease an electric motorcycle. The dealership stuffed that right up
@@theairstig9164 I have leased(Novated) a BEV Ioniq through my work who use Maxxia no issue at all as I am in Australia as well. I also know others do the same but there are other leasing companies that people have and do use for leasing EV's in Australia. Privately though that is probably another matter altogether.
At my company, we started a company car scheme specifically for EVs. The tax incentives are huge. We have bought 2 Tesla 3s and a Kia eNiro so far. Hoping to do a VW ID3 and a Renault Zoe this year :)
Oh, plus we installed 2 x type 2 chargers at the office so staff can charge for free at work. So much cheaper, cleaner and better than old ICE car schemes.
Come on people.... i think Robert is talking about not paying a specific tax on top of what he is already paying for his home electric.
yeah, people really seem to be missing the point that the point of duty is to discourage driving and pay for the road network, you cannot add a tax to electricity to do that, or replace diesel taxation with an equivalent result
This was an excellent video thank you fullycharged! And superb knowledge sharing from Matthew. Im looking into EVs through work as salary sacrifice but there's so many unknowns and the lease company aren't replying to my financial questions. So this has been great!
Q: "Why would you buy something?"
A: Because it's cheaper, particularly given the value retention of an EV over the years
That's because the lease companies have been conservative,and EVs have not only been better value than thought, but actually better value than ICE cars off the same price.
And this isnt finished...3 years sales are the result off the sales chain from birth to death, and EVs are still too new to have completed this chain..and as EVs get cheaper the savings from fuel get larger. At 40p per mile deprivation and 12/3p for fuel the saving is 15%. But at 5p per mile deprication that same saving is 47%. And on 5p overnight rate your looking at 64% or people who could only afford 3k ice, buying 9k EVs .
Imagine how that extra demand will effect the sales chain and off course lease prices.
I don't know a single person in Canada who has leased an EV, everyone I know all bought them through dealership financing. The dealers didn't even talk about leasing as an option! But leasing was already very popular for ICE vehicles in the UK, more so than here. So tax differences from one country to the next probably plays a role. Canadian sales tax rates vary from as much as 15.5% to as little as 5%, vs. 25% or so in most of Europe, so that likely pays a huge role!
But a base Model 3 here (Australia) costs $70,000. If you choose almost any decent options you’ll be over $100,000. I’m thinking leasing may be the only way I get to drive the “cheap” Tesla. :( The Canadian dollar is slightly stronger than the Aussie dollar at the moment, but in my industry (IT) my Canadian colleagues earn better wages than we have here in Australia, so $100,000 or even $70,000 is a huge amount for a car.
Actually no, you should never buy something that loses value. Cars always lose value, unless you're talking collector editions or classic cars. Therefore it makes zero sense to spend your own money on something like that.
I'm loving driving my ID3 having graduated from a Golf GTE. Fully charged has been an important part of my journey. I look forward to the next episode every week. But ... of course you can tax electrcity use. You probably already pay VAT. Your supplier can be required to charge tax and to funnel it back to inland revenue. It will come once they don't feel its necessary to promote electric cars. It will be difficuylt to differentiate between domestic and automotive use. But even that's going to become possible.
Good luck to any government that suggests adding extra tax to electricity
Nice. I've been leasing an Ioniq EV via Salary Sacrifice which includes Insurance, Servicing/Tyres and it costs approx £68 per week. I usually use free charging at the local supermarket most days (due to lockdown) so it is an amazing deal IMO. Naturally costs will rise when the government sets plans to recoup losses in taxation but until then, I am a happy driver with a wonderful vehicle and cash in my pocket!
Hey LeasePlan! Why doesn't your website have a filter for Fuel Type? I went there after this episode to check out some EVs but you didn't make it easy. Fire your marketing team! They should have sorted this before you got exposure on Fully Charged!
Fun fact: 40% of Network Rail's (Britain's largest electricity consumer) electricity costs is tax. So yeah we're in the tragic situation where our electric trains are taxed on their energy source but fossil fuel burning planes are not.
David,
can you substanciate that because I don't believe it's true? Electricty is produced with a lot of fossil fuel generation any way.
@@iareid8255 ~50% of electricity generated in the UK is from renewable sources and growing at a steady pace. Not sure on David's claim about Network Rail. For starters, business rates are 19%, so that leaves an additional ~21% unaccounted for. And, is it on electricity anyway? 100% agree with him when it comes to planes, though.
@@TheKorusuk
I think you will find that 50% is far higher than the truth. The one fairly consistent generator is the inaccurately categorised biomass. It counts as renewable but it is a very high CO2 emitter (The highest).
We cannot run our grid without fossil fuels, we can without renewables and we would have a far more stable and reliable grid if thu8at were the case.
@@iareid8255 the UK will zero fossil fuel power from thermal sources by 2040. No coal in 2024 and no gas plants
Biomass is different
Mr Jizz,
it's impossible to run the grid without fossil fuels generation for two reasons. One, is that nuclear, wind and solar cannot load follow so fossil fuels which can, will do that to keep the grid in balance.
Two, it is necessary to have sufficient spare capacity to cover when renewable output is very low (> 10% demand and sometimes much lower) that occurs with regular frequency.
Conceivably biomass will also do that but that is very CO2 intensive, as I said. (Worse than coal) Chopping forests for power station fuel is not a good idea at all.
As of 8.30 am today, gas is providing six times that of bio fuel. So that would need at least five further Drax bio fuel stations. I forget how many tons of wood pellets Drax uses per day but it is a very large amount, brought over from the Americas.
Google will give you an idea.
EVs are accessible and affordable by many and this video explains some of the popular options to get yourself into the (likely new) EV you're after. This is a really informative video and worth the time. With regards to fuelling, offsetting the costs against an ICE car isn't really as easy as all that. It's much like saying "if you stop buying your coffee you can afford this iPhone" and this is true for any purchase. Looking at the total cost of ownership is important and funding any additional cost, critical. The point is that for many people, your £1 goes further as it will be taxed at a reduced or 0 rate. If you are leasing an EV personally, then the incentives are less and you really only have the "how much does it cost to run" metric left to compare to your current vehicle. Much depends on your employer for sure. But the entry point remains high as with any new product with a 2nd hand market still in its infancy. To answer the taxing electricity; it's quite simple to do as many chargers talk to their manufacturers' central database. It would be trivial to find out how much of my home usage is going out of my charger vs. into my home/office. I agree that tax should be about road use - but how you use the road, not mileage based. They need a wear metric so those that do the most damage pay more, possibly with a vehicle type or weight multiplier. Centrally held, distributed fairly, to avoid density/rural issues.
You could have had a part 2 to the discussion. Very interesting.
Every time Australia is mentioned it’s because of how shit we are with EV legislation etc... I totally get it, but it’s a downer. Yesterday there was news that Canberra (ACT) are looking at having EVs be registration free. No fee. It’s the only positive news we’ve had regarding electric vehicles and I hope we get more soon.
That dude is a great explainer of complex things.
As an Australian with a roof full of solar and looking to get an EV in the next 6 months it makes me despair thinking how backwards we look to the rest of the world when it comes to clean energy and EV motoring...
Never mind Simon, just keep pushing. I just wish I could import some of your sunlight...I'm in Scotland, I could sell you some rain though. How about some swapsies?
I'll gladly trade some of my sunlight for whisky lol!!
Califorina we pay a lot of tax on gasoline and there was a move to make what was called the Road Charge Program, they charge you how many miles you drive your vehicle.
My e bike is looking better all the time, its paid for, it doesn't use much electricity its doesn't go far but to get out of the house or run around the corner for quick errands for essentials (quick stop at the market, pizza, tacos) its great.
I think I drove four thousand miles last year. I work from home and have most of my stuff delivered.
You do not pay a lot of tax on gasoline, you just pay more than the rest of the USA... google suggests you pay about $3.50 per US gallon.. which is approximately half the cost of the UK, we pay more in duty than you pay in total... plus 20% sales tax
@@mralistair737
its more like 2.95 a gallon, its 50-60 cents tax, the state raised the gas tax to improve roads and infrastructure I still don't see any improvements,
Neighboring states are typically a a dollar or more less per gallon.
I know in Europe you pay a lot of tax on fuel I was an expat and lived in the UK for a few years and know about it myself.
That google price is probably an average the big name providers like Shell, Mobil, etc all charge more I drove by them this morning and 87 octane which my car runs on was around 3.13 or so, 3.23 if use a credit or debit card.
I go to an independent station no fees for using a card or using a mobile phone payment. its 2.95 per gallon
Realy interesting and simple to understand thank for this type of content😀
I agree with the comments on older LEAF's and would add a couple of points. Businesses are starting to higher capacity batteries from accident damaged vehicles, with small modifications even the latest 62KW pack will fit completely rejuvenating the car.
There is demand for older batteries for use in household solar storage, especially now the feed-in tariff for new solar installations is approx. 5p per KWH. This, I estimate sets a floor on the value of older LEAF of at least £2-3K.
That was fantastically informative, thanks Robert and Fully Charged!!!! Now, would you be so kind as to do an episode on the best deals for individuals to lease a car from? Like rating companies?? Or at least tell us where we can go and find this info??
‘You will own nothing, and be happy’ comes to mind :-))
The "great" reset
The whole discussion about “the party that introduces the road tax will be out next election” is the exact reason why Australia introducing it now makes sense. There aren’t enough EV owners to make any difference to the voting and once it’s in place people will just accept it as standard as EV numbers increase. As far as I’m concerned, being in Australia which as you mentioned has no EVs to talk about, the Gov would be smart (haha, I know, I know) if they introduced the road charge as they also introduce tax breaks. This would be a carrot and stick approach for those getting into the EV market. We’d finally get a bit of a break on the incredibly high (in Australia) purchase prices of EVs to offset the downside of not being able to drive on the roads for free. For myself, I have no issue with the km charge as I want to be able to drive my EV (if I can ever afford one) on decent roads and I realise that that has to be paid for somehow. When I register my car each year, just give me a box to fill in my current odometer and let me know what I owe in addition to the rego. Pay per km will be the fairest, pay for use option in my opinion.
Bob: "Y'can't tax electricity! It's not possible!"
Utilities: "Hold my beer. And pick up my tab while you're at it."
It can be done by software on the electric car side even if you off grid with solar
I think a basic car tax of say £100 then £50 every second quicker to 0_60 than 12 secs so robbert would pay £350 witch I genuinely think is fair
There is Vat on our electricity Robert, but what’s more interesting is that the BIK is calculated on the full cost of the car, including VAT. So Fishi Rishi, is taxing us on tax. Luckily we’re at zero BIK and it won’t rise much but when we were all in dirty diesels we were paying 20% on the Vat. As for “how can we pay tax on our electric” why do you think government funded home chargers MUST be smart chargers. Big brother already knows how much electric goes in your car!
A smat meter can't tell where the electric is going. Could be running the kettle, microwave and washer all day or charging a car it wouldn't know
With the technology in new cars it would make sense to have embeded software for Micro Tolls via GPS. Each road maybe costs $0.01 and you pay for each street you use. Best part no physical tolling infrastructure needs to be installed to enable every road to be tolled, and current physical toll infrastructure can be phased out. Whole trip costs would be able to be calculated energy cost, tolling cost, estimated car maintenance contribution so you know the true cost of your journey.
I always bought second hand, likely alway will. The depreciation value of the car is alway way over estimated I feel by people who push you to least/rent/pcp yes I think buying brand new to the first year you loose a lot but after that cars don’t drop in value as much as they like you to think. I usually buy a car that just 1 year old so it still has garage warranty so I know It won’t have any big issue for the first 2 years and sell it in 5 years time the money i lost on depreciation I always found to be not much, say £3,000, most leasing, rent, pcp for 4 years you going be ending up paying around £5,000, and got nothing to show for it. I still got a car that I sell or part exchange.
so you get paid £2000, so £100~ for the effort of doing this yourself. a £3000 loan cost about £45 a year so £135 in interest saved. so about £49 insurance to guarantee the car is worth X at the end off off the lease period, no questions asked.
Sound like you are happy to take the risk because sometime you make more.
I commend but just realise its not no value to leasing.
@@simonhenry7867 Cash is king, BUT, if you have other debts to pay, cant save up the money, need a car right now, and want a better car than you can really afford, then leasing or pcp is the way to go! I just want the point out people forget that at the end of these deals you dont have a asset to sell or keep (plus things change in you life, you loose your job, cant keep paying you loose the car, that another big advantage, I know a friend who lost work due to this covid and had to return his car. if you own it you dont have to worry about this)
Here from twitter to see the people complaining about electricity tax when I already know the video is well made and correct.
This was brilliant episode! Thank you for doing it!
That is why NIO Battery Swap is GENIUS...no fear of big losses on EV leases.
While it's true that there are different regulations throughout the world, the basic problems of taxation and road usage remain the same regardless. It's good to see a program that's discussing the issues in an open straightforward way regardless of where it is.
If you could get a lease that is flexible on the milage, when you find you can't drive anywhere that would make them more appealing. To compensate they could have a standing charge element.
I've been investigating leasing a Tesla for a while now. It really isnt worthwhile private leasing, the VAT doesn't impact cost at all seemingly, and the estimated residual is off imo. So not worth unless your company offers leasing. Also worth noting, a lot of these lease companies don't offer decent leases unless you're over 30.
I agree, in Norway a Tesla Model 3 if you finance it for 3 years you only pay 0.25% interest. With a decent downpayment you will pay less monthly than leasing, pluss you get to keep the car.
This was a great video and a great conversation thank you so much for sharing this I really learned a lot
Great Video Robert! Answered so many questions.
If the HMRC restrict business mile expenses to a flat rate of 4p a mile, owner drivers will be funding the difference between the 4p and what they have to pay out on the road where rates can reach closer to 50p
thats unlikly so its about 12p fuel and 45p total so 30-35p is slated maintinence, deprication wear and tear. so if they go to 34p the lowest you could expect.
Thank you for making this very informative video. It helped me to understand the picture much better. Leasing might not be for me at the moment but I look forward to picking up the cars coming out of the leasing fleets in a few years time :-)
you do pay VAT on energy from grid
I bought a Kona in Canada for $40k. The average price of a new car in Canada is 36,000 dollar. so i think it was an affordable car. I am going to keep mine for ever and just lik Robert it was my first new car I ever bought and I was 58 when I bought it. Cheers
I own the car I currently drive, but I have leased in the past. For me, the leasing experience had one major drawback that was not covered in this report, that is the arbitrary assessment made at the time the car was collected from me as to whether I would be charged some (unknown to me) amount for wear and tear. I had no real idea how this process would happen and what sort of amount I might be called upon to pay. As it happened, the car was collected without any charge to me, but the worry was still there. I accept that the valuation of a trade in car will take account of wear and tear, but at least I have the option to go to another dealer if I do not like the trade in price on offer. With leasing, as far as I understand, you have no option but to pay up on the assessment of the person sent to collect the car - in my case a couple of people from a local car auction company. Perhaps RL might like to comment on this aspect of leasing
Amazing video. In Portugal LeasePlan renting service on a Kona Electric 39kw for individual owners cost you...757€ + tax (23.5%) Absolutely ridiculous price.
Here in Germany, corporate cars supplied to employees are something very different: either the employee is keeping records for any trips to be taxed more accurate or (more common) pays 1% of the cars full list price plus a fixed rate per month reflecting the one way distance between home and office. For EVs, plug-in hybrids and fuel cell cars, the “1%” calculation is based on half of the cars list price, making those cars a much cheaper option for the employee.
Leased corporate cars are being swapped after 1-3 years for a new car, which provides a substantial supply of “almost new” cars to the used cars market. About 11% of cars in Germany are corporate cars, so this should be an attractive idea for EVs, eh? Not this fast.
Corporate cars are usually equipped with a petrol fleet card to have the company pay for any fuel, oil, car wash or maintenance (in regards to taxes, those costs are seen as operational expenses and can be deducted from any other taxes the company has to pay - and some companies are very eager to get those deductions). Yes, there’s little reason to save fuel with such an system and this “the company, ehem taxpayers pay your fuel bill” makes corporate cars very attractive to employees.
While a charge card for public charging stations is still an option for EVs, most EV owners do prefer charging at home- where the employee has to pay for the electricity bill, unless they have an electrician install a separate meter and have the employer pay that bill (which is way more red tape than getting the monthly bill from the fleet petrol card).
And those who don’t live in their own houses usually don’t have the option as well to either charge at home or install a separate meter.
Another option were to charge at the office and have a charge card only for any non-commute trips - which would require the employer to install some expensive charging stations in their parking lot, upgrade the electric cabling across the parking lot and so isn’t that attractive to the employer.
As plug-in hybrids are also being calculated from half of their list price, they’ve become quite popular over the past few years. However , there’s a serious problem with that: when the leased car is being swapped after a year or so, the dealer often discovers the still sealed charging cable in the trunk: the car has been running on petrol only, due to the convenience of the petrol fleet card and inconvenience of the small battery - in addition to paying just half the price than a conventional petrol car.
So: it’s not just the cost for the car, there may be many more issues to decide on which kind of car…
Another great video - but bear in mind although you can claim back 4p per mile (just about covering home charging costs), recharge rates away from home are typically 30 p per kW... which means if your 77kW battery gives you ~200 miles of realistic range and your meeting is ~200 miles away, it will cost you 23 quid to recharge away from home... BUT you'll only get 200(miles) x 4 pence = £8 back from your employer. So you'll be out of pocket by ~15 quid if your business trip is ~ 200 miles away (because you'll have to recharge the 'expensive way' for your trip back home!). Still better than ~£500 / month BiK for a diesel Merc or Beemer, but remember that you'll be funding your long distance return trips out of your own pocket unless you are lucky enough to always find fast, free chargers !
Thanks so much! Lived it. Very interesting content!
Really useful stuff. Thanks Robert & team.
Useful stuff Robert, thanks! How about a video on the UK charge network(s)
I recomend EVM he's done multiple videos on UK network. Short story it's getting better but the Supercharger network trumps all (not the case in Wales)
Before I ended up with my gently used 2016 Kia Soul EV+ (only had 17,000 miles on it!) I saw an ad for brand new Hyundai Ionics for only $99 a month (to lease). But when I called the dealer they said they had already leased their entire allotment: One. Granted, I'm in a non "compliance" car market so I guess it should be expected. (Absolutely LOVE my Kia, by the way, which I bought without ever having driven or even sat in it. In fact, it was the first EV I had ever been in when I bought it. No regrets!) [edit: I'm in the USA, not the UK]
The subscription-based model is also very interesting too, Would be nice to have all the equipment from say tesla like the roof on your house and the powerwall and a car you need and use the passive income the roof is meant to generate to pay off the cost of the equipment there needs to be more helpful for the people to afford the cost scrappage deals would also help
To cover road taxes my state made the licensing fees for ev vehicles $1250 for fuel vehicles its $195, this is paid every 2 years, making leasing even a more valuable option.
I will never understand why private individuals think leasing is more affordable. It is not. Financing and owning is far less expensive. With leasing you will make that payment forever and never have any equity and will never have anything to show for it. You may as well be flushing that money down the toilet. Buying will immediately get you equity, and you have the option to keep the vehicle long after it's paid off and have no payment at all. That car will *always* have *some* value, even if it is wrecked or not driveable.
The reason dealers, financers, etc. tell you to lease is because it makes far more money for THEM, not you. And any individual who says they have done better financially has not actually crunched the numbers and is accepting the word of people who do *not* have your best interest at heart, regardless of what they may have fooled you into believing.
All that gibberish about depreciation and resale value is lies. If you subtract the resale price from the purchase price and divide by the number of months you've owned the car, the net payments, and by FAR the net cost to you, will be much less.
The situation for businesses is far different because the tax situation is much different and they can write off the expenses. Private individuals cannot do that.
Leasing was originally created for businesses. Wealthy people to whom cost is no object started leasing because it was just the easiest way for them to get the new model every year, and they didn't care about the expense. Then Dealers and finance companies started talking ordinary people into it because it is far more lucrative for them and more expensive for the customer. You don't believe anything else a car dealer says (or you shouldn't if you do), but you'll believe this? 🤔
It beggars the imagination! 🙄
VAT is definitely charged on lease costs, so the comment about saving 20% VAT by leasing is wrong.
but the lease is cheaper than the car. so you pay 20% on that, not the value of the car.
Aren't you paying VAT on your lease - of a car that is cheaper because you're *not* paying VAT on the whole value of the car...? And the lease-price (pre-tax) is only the estimated depreciation of the vehicle over the lease period (plus a little extra as profit), so as EVs aren't depreciating much atm (less than ICE vehicles, anyway), your lease will be smaller, and thus so to your tax bill.
But the VAT saved is the difference between the costs of leasing compared to cost of purchasing over the same least period. Not the full 20% VAT on the full purchase cost of the car.
"can't distinguish between home electric use and EV use". For about 80 you can add a meter to your home Electric cupboard for the car circuit. You can then claim that back if its a company car.
I'd like to see a comparison of PCP vs lease, whenever ive looked up prices they ain't that different in price and at least I've got the option of buying at the end,when I've essentially paid for about half of it. I don't need a new car every 3 years, leases don't seem to suit me, this hasn't convinced me.
You also get the difference between planned value and actual value of the car back at the end of PCP if you give it back, not the case from my understanding of a lease
Enjoyed the video Robert.
Really informative 👍👍
Thanks Chris
Yes let's all use credit - what could possibly go wrong?
It's good to see this video acknowledge that the vast amount of tax currently levied on ICE vehicles is going to have to be borne by EVs in the near future. And none of this is to criticise the video, because I think it's the first one I've ever watched that mentions this elephant in the electric room, so well done. I agree that road pricing would seem the fairest way of achieving this but as you mentioned, this is super unpopular in the UK at least. The alternatives must either be to hike the flat-rate road tax, or to tax the electricity. And I'm not so sure that electricity couldn't be taxed somehow. When we're all running EVs probably the majority of household electricity consumption will be for car charging, so the government might just introduce a flat additional tax rate on it. Or adopt a system similar to the one used for taxing diesel used for pleasure boat. That assumes most of it is being used for propulsion, so it attracts the same tax as road fuel diesel, but allows a small proportion to be exempt from this tax on the basis it's assumed to have been used for domestic purposes on the boat (including to generate electricity, ironically enough). The same could be applied to household electricity bills. Probably that would be more unpopular than road pricing, but my point is to agree with the other comments who point out when it comes to imposing taxes, where there's a will there's a way!
Here in the states we do pay tax on electricity you see it in the electric bill
He mean additional tax for EV electricity. We pay tax on electricity too.
This is the most well explained video on this topic thank you. Can I share this vid on my LinkedIn page please?
Would be thrilled to see it on there
Fascinating video, going to forward this to our fleet department as I'm fed up paying a small fortune in bik to have a company car. The salary sacrifice option sounds interesting though, need to read up more about it.
Let us know how you get on
I’m leasing through my Salary Sacrifice scheme; a £50k Polestar 2 for £80 a month cheaper than my previous car - a BMW 5 Series Touring, which was priced at £44k 😊
I've done the math, and in the Netherlands it's actually about 30 percent cheaper to outright buy a new standard range model 3 without options, then to lease the same car, if you want a new one in 3 years. This is probably because deprectiation isn't as bad on EVs. Mind you, I'm talking monthly costs. Obviously it's a huge investment not everyone is able to do. But if you can, this particular case works out to be cheaper to own than to lease.