Leasing company Ayvens, formerly LeasePlan/ALD Automotive, is one of the first major leasing companies to actively promote extending the typical EV leasing contract from four to six years.
“The combination of technical reliability and limited maintenance costs makes an extension of leasing contracts extra interesting today – both for the environment and the wallet,” Ayvens says in a press release.
Cost advantages
“You lease longer mainly because of the cost advantages. After all, the cost price per month decreases as we spread a contract over more months,” the company says on its website. But how much you will gain on average isn’t specified.
However, it’s not just about the customer’s wallet; leasing companies are seeking new ways to cope with a rapidly evolving electric car market and primarily the rapid depreciation of the residual value of their cars.
86% of EV registrations in Belgium
Especially in Belgium, where more than 60% of new cars sold annually are company cars, mostly leased. And they all have to be zero-emission by law by 2026 to be eligible for a 100% tax deduction.
Belgium registered 127,922 new electric cars in 2024, representing a 37.3% increase from 2023. Companies and leasing companies, in particular, are driving this growth, accounting for 86.7% of EV registrations.
Managing depreciation
By extending the lease, companies can better manage depreciation and spread the loss (if any) over a more extended period. Residual values, or what a car is worth at lease-end, are more volatile for EVs due to rapid advancements in battery technology and changes in government incentives.
Newer EV models are emerging rapidly, offering improved battery range, faster charging, and enhanced features at similar or lower prices. On the other hand, the residual value of end-of lease EVs is dropping fast lately because the typical markets for dumping ex-lease cars with a combustion engine always was Eastern Europe.
Those markets aren’t often ready for a transition to electric, and the supply of second-hand EVs is likely to explode as more electric cars reach the end of their leases. Leasing and finance companies are adjusting their residual value forecasts downward.
Pushing to keep them longer
So instead of losing money by selling their ‘under-valued’ end-of-lease cars, those companies have every reason to push their clients to keep them longer. And pay for it longer.
But there is a clear technical advantage for using EVs longer too. They also often have a proven longer economic lifespan than ICE cars.
“In practice, the batteries last longer than expected. Recent research indicates that an electric battery retains an average of 80% of its capacity after traveling approximately 200,000 kilometers,” Ayvens explains. For cars with a combustion engine, 100,000 km was historically considered a logical threshold.
“Electric cars also require less maintenance, remain technically more reliable, and fit better within a sustainable mobility policy, which makes longer leasing periods more interesting.”
“That is why at Ayvens we recommend extending lease contracts to six years. For those who already drive electric through a leasing contract, an extension of one to two years opens up new opportunities, both for employees and employers,” says Johan Portier, Managing Director at Ayvens Belgium.
If one sheep leaps over the ditch, all the rest will follow. So expect the other leasing companies to adjust their offer rapidly too. Until now, extending or adapting the maximum kilometer allowance in an existing leasing contract has been subject to limitations.
