This sharp increase is being fueled by a combination of elevated fuel prices and the expanding availability of pre-owned electric vehicles entering the leasing market. As more early adopters of EVs trade in their cars, the used inventory is growing faster, meeting increasing consumer demand.
Access to electric vehicles is broadening as used EV leasing options, especially salary sacrifice schemes, become more widespread. These schemes operate by allowing drivers to cover the cost of their car before tax is deducted, which makes leasing more financially feasible. The BVRLA reported that the number of secondhand electric cars leased through these arrangements has risen by five times compared to the previous year.
Personal Contract Hires Surge
Another major trend is the rapid growth in personal contract hires for used EVs, with the number of these lease agreements increasing nearly sixfold over the past 12 months. Personal contract hire agreements operate like a rental with a monthly payment, offering users a way to drive a car without the full cost burden. However, this arrangement means that individuals do not become the car’s owner at the end of the lease term.
The sharp rise in fuel prices, particularly following the US and Israel’s military actions against Iran in February, has significantly influenced consumer behavior. Owning an electric car is now a more economically attractive option for many people compared to driving on petrol. Toby Poston, chief executive of the BVRLA, highlighted that used EV leasing is offering consumers a range of options and choices, with access to vehicles equipped with the latest technology.
Poston emphasized that used leasing is opening up the opportunity for more people to drive electric, especially through salary sacrifice schemes. These arrangements are particularly beneficial for households that previously thought EVs were too costly. He noted that these options are reducing the financial risk typically associated with EV ownership.
Affordability Drives Interest
Thom Groot, CEO of The Electric Car Scheme, stressed affordability as a core factor behind the growing interest in secondhand EVs. He stated that used vehicles are making electric driving attainable for those who could not justify the upfront cost of a new car. As supply continues to match demand, Groot predicts continued growth of 80% to 120% in the next year.
Octopus Electric Vehicles, a division of the UK’s largest retail energy provider, reported a 122% increase in used EV leasing up to June this year. Gurjeet Grewal, the company’s chief executive, said that used EVs are among the best ways to make the switch to electric driving. He highlighted that drivers are quickly realizing the benefits, with savings on running costs being a major factor.
Grewal added that used electric vehicles are selling faster than other used cars, largely due to their strong cost-saving appeal. He noted that drivers get access to the same advanced technology and low-cost electricity, but for an average monthly fee of around £60-70 less than leasing a new EV. Some models even offer savings of up to £200 per month, which is making demand grow rapidly.
Business Sector Growth
In the business sector, the growth in used EV leasing is equally strong. Business contract hires for used electric vehicles saw a 50% rise in the last year. The Electric Car Scheme also reported that its used EV leasing services have more than tripled since being introduced in 2024. Thom Groot explained that this reflects the broader shift among companies to embrace electric vehicles through cost-effective, flexible contracts.
One challenge remains in the used EV leasing market: the benefit in kind tax breaks are still calculated based on the original value of a new car rather than its current secondhand value. Groot pointed out that this could limit the affordability benefits that salary sacrifice schemes offer for used EVs. Addressing this issue could further accelerate the adoption of used leasing as an alternative to new car purchases.