When Anthony Santos was looking for a car to replace his Audi Q3, a diesel SUV, he felt reluctant about making the switch to an electric car.

“I was considering it, but I probably wouldn’t have,” says Santos, a sales manager at RWinvest, a property investment company in Liverpool. But when he started looking at his options the ability to lease a used electric vehicle (EV) caught his eye.

A couple of years ago someone looking for their next car would have been hard pushed to find a used EV – let alone lease one – but that is changing fast.

There are now 1m EVs on British roads, and the cars bought by early adopters are hitting the secondhand market.

Generally speaking EVs have lost value more quickly than petrol or diesel cars, which is a big problem for the owners of leasing companies, rental businesses or corporate fleets. But the flipside for consumers is that it is possible to find a cheap leasing deal.

In the second quarter of 2025, the number of used car leases in the UK rose by 166%, compared with the same period a year ago, with electric cars driving the growth, according to the latest data available from the British Vehicle Rental and Leasing Association (BVRLA), a lobby group.

“Three years ago used EV leasing was very small because there were very few used EVs on the market,” says Thom Groot, the chief executive of the Electric Car Scheme, a broker. From about 15% of sales in 2024, used EVs now make up nearly half its business.

At Octopus EV, which is part of the UK’s largest energy supplier, the number of used EV leases has doubled in the last year.

The picture is helped by fact that big players in the leasing market, including Lloyds Banking Group’s Lex Autolease, BNP Paribas’s Arval, and the independent group Zenith, have started now offer leases on used EVs.

With the average price tag of a new electric vehicle sitting at £50,000, putting them out of reach of many Britons, in the summer the government launched a subsidy scheme. But buying secondhand makes going electric even more affordable.

Santos discovered that he could lease a lightly used Mercedes-Benz EQA without paying anything upfront. His company offered a salary sacrifice option (more on that later) via the Electric Car Scheme, which meant he could pay £360 a month for a car that would usually cost £570.

“There was no deposit – the tax benefits really made sense,” Santos says. “That’s what made me move forward with it.”

How leasing works

People who lease their cars pay a monthly fee, typically for two or three years, avoiding the need to stump up tens of thousands of pounds upfront. As well as the car, costs such as road tax, breakdown assistance, service and maintenance are often included – but typically not things such as insurance.

Leasing a used EV is a lot cheaper than buying a new one, even for vehicles in good condition that are only two or three years old. That means more expensive models can be more affordable, making it easier for people on lower incomes to cut their carbon emissions.

The Electric Car Scheme gives the example of the Škoda Enyaq, an SUV. On a standard lease a new model costs about £567 a month, but that falls to £292 for a used model on salary sacrifice. Volkswagen’s ID.4 SUV similarly falls from £506 to £296 a month, a decrease of 42%.

However, not every cost will be picked up by the owner. Lessees will still have to pay damage outside fair wear and tear, and some also add an excess mileage charge. While 10p a mile may not sound like much, high-mileage drivers will have to consider whether they will face a big extra bill when they hand the car back.

Salary sacrifice

The best deals will almost certainly be limited to those whose employers have signed up for a salary sacrifice scheme. The key thing about salary sacrifice is that the cost is deducted from your pay before tax – lowering your tax bill. How much you save depends on your tax bracket: so lower-rate taxpayers save 20%, higher-rate taxpayers (salaries of £50,271 to £125,140) save 40%, and 45% above that.

Ian Hughes, the chief executive of the corporate and consumer business of Zenith Group, says salary sacrifice has been “a major foundation stone of the transition” to electric cars due to the tax advantages.

Many employers offer salary sacrifice – ranging from very small companies to household names such as HSBC, BT and Jet2, as well as a number of NHS trusts. There are usually no fees for the employee, but employers pay the scheme provider the equivalent of the tax saved from lower national insurance contributions.

Often the companies offering salary sacrifice impose conditions, such as a minimum contract length, or a gross basic salary above a certain threshold. People leasing will also have to go through a mandatory credit check, as well as affordability checks to make sure they can handle the monthly payments.

There are still options for someone whose employer does not offer a salary sacrifice scheme. Carwow’s “Leasey” leasing service, for example, offers used EVs. An electric 2022 Mini Cooper S with 17,400 miles on the clock would cost £256 a month. That is still significantly more than the £209 offer for those able to use an employer’s scheme, but well below the £310 a month (on top of a £3,000 upfront payment) for the equivalent new model bought from Mini directly.

Gary Comerford, a consultant who runs the EV Musings podcast for electric car drivers, says his experience of leasing a used EV is “very smooth” but adds that he would not say it is flawless. He could not do a test drive before committing via Car360, although he had the option to return with no questions asked within the week. He paid a deposit of £1,200 and pays £310 a month for a 2021 Polestar 2.

“As long as you can work within your budget it’s quite easy to get a lease,” Comerford says – although he adds that limiting tax benefits to salary sacrifice is unfair to self-employed people like him.

Some optional extras can be included with the car (and can benefit from salary sacrifice tax savings), such as car insurance, home chargers, and even electricity.

At the end of the term the choice is generally to either extend your lease or hand the car back, although some companies also offer the ability to buy the car outright. Note though: early returners will probably end up paying an early termination fee (although fees for salary sacrificers are usually waived if they leave they employer through resignation, redundancy or dismissal).

If it works for you, and you meet the conditions, used leases make it much easier to drive an EV, says Zenith’s Hughes. “The very, very exciting opportunity is it lowers the price of entry from an affordability perspective,” he says. Zenith’s newly launched used EV salary sacrifice scheme has had “a nice balance of 20% and 40% taxpayers”, he says.

Beating depreciation

Leasing companies are not offering deals out of the goodness of their hearts. Offering used EVs helps them cope with their least favourite word: depreciation. They bought a load of electric cars a couple of years ago, only for secondhand, or “residual” prices, to drop more than expected amid slower overall demand for EVs.

Leasing companies have a large supply of rapidly depreciating vehicles, says Toby Poston, the BVRLA chief executive. They do not want to sell at a steep loss, so leasing helps solve a problem.

Holding on to electric cars means leasing companies can continue to make money from them. The industry’s experience with thousands of electric cars is that there are far fewer breakdowns, compared with equivalent petrol or diesel cars, meaning they are less likely to face huge repair bills as the vehicles age.

Hughes expects Zenith’s cars to go through two or even three drivers over eight years before they sell it on – potentially meaning no residual loss whatsoever. (Contrary to one persistent anti-EV claim, meaningful battery degradation is “just not a thing” for the average car, he says. And most EVs come with eight-year manufacturer warranties on batteries, which means leased cars would be covered.)

Without costly breakdowns to worry about there is “less potential risk” so it easier to offer leases, Poston says. At the same time, there is “overproduction of cars across the world”, he adds. “The deals you can get now are stupendous.”