Electric vehicles and leasing | Commentary March 2023
Auto Trader response to report by campaign group Transport and Environment
In response to this report by campaign group Transport and Environment, we'd like to issue the following response.
This report shows little understanding of how residual values are calculated and how the automotive industry functions whilst ignoring the context of a maturing market where lenders can’t rely on abundant historical datasets to make decisions about new products.
“We believe this is a case of financial institutions simply having to base calculations on the limited data available to them in an emerging market, rather than any deliberate attempt to unfairly increase profits at the expense of the consumer.
“Currently, electric vehicles (EVs) are, on average, more expensive than ICE vehicles but that gap can be reduced through finance mechanisms such as leasing and, in time, economies of scale should naturally level out this initial difference. Until then, leasing remains a good option for many consumers which, along with initiatives from all parts of the industry, should help to gradually overcome the undisputed problem of mass market affordability.”
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