Beat The VED Deadline: Why Leasing An Electric Car Now Is A Smart Financial Move

Beat The VED Deadline: Why Leasing An Electric Car Now Is A Smart Financial Move

Motorists who are considering making the switch to leasing electric vehicles (EVs) are being urged to undertake the transition now, and beat the looming vehicle excise duty (VED) deadline which will remove a popular financial benefit of driving an EV on UK roads.

From 1st April 2025, EV motorists will no longer be exempt from paying road tax (vehicle excise duty), but even though the loophole which has benefitted EV drivers up to now will be disappearing, the tax demands on EV drivers will still be much less than those facing petrol and diesel engine drivers. As of 1st April, all new EVs registered in the UK will be subject to a £10 charge for the first year on the road, and in subsequent years this will rise to £190 per year. Drivers of EVs with a value of £40,000 or above will also have to pay a supplement of £410 per year.

Previously, EV drivers enjoyed a Band A status in terms of their road tax obligations, which was zero. But now that has changed. However, even after this change, road tax for EV drivers is still cheaper than it is for petrol and diesel engine drivers, who are also experiencing a further increase as part of the revised rates. The new VED rates were first announced in the Government’s Autumn Statement in 2023, and EV drivers are generally accepting of the increase, having enjoyed exemption up to this point, and now considering it fair that they contribute to the upkeep of UK roads. The Government is essentially saying that an ongoing exemption for EV drivers is unsustainable when you consider the increase in EVs on the UK roads, and the impending ban on producing new petrol and diesel vehicles in 2030.

How the new VED rules will affect EV drivers

The move is not expected to dampen enthusiasm for drivers switching to EVs in the UK either, with the 2030 ban in mind and also the various benefits of driving an EV – reduced carbon impact, cheaper fuel per mile, cheaper service and maintenance costs etc – making the switch a hugely advantageous move to make. And leasing a new EV now will help to defer this road tax cost, at least for the first year.

Leasing a brand new EV before 1st April means you won’t need to pay road tax for the first year at £10. However, if you lease an EV registered between 1st April 2017 and 31st March 2025, and prior to 1st April 2025, you will avoid the standard charge of £190.

In detail, the new EV VED rules from 1st April 2025 will be:

• New EVs registered on or after 1st April 2025 will be liable for the lowest first-year rate of VED, currently £10 a year

• In year two, they move to the standard rate, currently £190 a year

• EVs registered between 1st April 2017 and 31st March 2025 will also pay the standard rate

• The Expensive Car Supplement (£40,000+) exemption for EVs ends in 2025. New zero-emission cars registered on or after 1st April 2025 will become liable for the Expensive Car Supplement. This is currently £410 a year.

• Zero and low-emission cars registered between 1st March 2001 and 30th March 2017, currently in Band A, will move to the Band B rate, currently £20 a year.

The benefits of leasing an EV with Pink Car Leasing

Leasing an EV is much cheaper than buying an EV, as you are not liable for the cost of depreciation. As you don’t own the car, the depreciation cost is taken on by the leasing company and forms part of the monthly payment you make to lease the vehicle, and varies according to how much annual mileage you commit to driving and how long the lease term is. This cost can also include your service and maintenance cost and your road tax. This saving means that, through leasing, you can enjoy a higher spec of vehicle for the money you are outlaying on a monthly basis, compared to what you would get for the same monthly cost if you were looking to buy an EV.

At Pink Car Leasing we have an unrivalled range of brand new EVs with some of the best leasing deals available on the market. Check out our range online and choose the vehicle that suits you. And if you agree an EV leasing deal with Pink Car Leasing before 1st April 2025, you will still be exempt from road tax for another 12 months, so get in touch with our team today.