Why Used EV Leasing is Exploding
By Motor Match • 24/11/2025
With a big shift going on in the UK, the electric vehicle market is going from strength to strength. If you're thinking about making the switch, you might want to read more.
What it Means for You
There’s a big shift happening in the UK electric vehicle market and if you’re thinking about going electric, you might want to read more. Used EV leasing is absolutely surging, according to the British Vehicle Rental & Leasing Association (BVRLA), there’s been a 166% year on year increase in used EV leasing contracts.
So, what’s driving this boom? And what should you, as someone considering a used EV, watch out for?
What’s Fuelling the Growth?
More Used EVs are Coming off Lease
Many of the EVs that were leased as new are now coming back into the market as used cars. Leasing companies are re-leasing these ex-fleet or ex-lease EVs rather than letting their residual value take a heavy hit.
This re-leasing model helps leasing companies reduce their risk while also offering cheaper EVs to second-hand users.
Salary Sacrifice Leases are Exploding
The big question mark for many is how healthy the battery is. Some drivers worry about degradation. Even though EV batteries are better than many imagine, checking the state of health is vital. Most OEMs offer battery warranties (often 5-10 years), but make sure you know exactly what is covered in your lease agreement.
It’s also worth checking whether you can get an independent battery health check, as having more transparency helps.
Residual Value Risk
Some used EVs are seeing falling residual values. That’s a risk for leasing companies, which could potentially affect future lease pricing or available models. If residual values drop more than expected, it could also make balloon payments at the end of a lease tricky (depending on your contract).
Mileage & Contract Terms
Leasing always means you need to be careful about mileage, going way over your agreed limit could lend to big charges. Damage and general wear and tear are also more likely to be penalised in a lease. Check whether the lease allows you to buy the car at the end or re-lease and on what terms.
Supply Risk - Market Volatility
While the surge is real, the supply of good quality used EVs depends a lot on ex-fleet/lease returns. Changes in fleet behaviour or policy could disrupt supply. Some in the industry worry that policy is lagging behind the used EV market’s growth, most government incentives are aimed at new EVs, not used ones. Also we’ve seen that used EV values are under pressure in parts of the market, potentially making it a riskier proposition for long term lease providers.
Battery end of Life - Recycling
As more EVs age, recycling and second life for EV batteries become more important. The UK is facing challenges here stockpiling batteries, limited recycling infrastructure, and uncertainty about regulation all present long term risks. If a battery needs replacing or refurbishing, costs could be significant and it’s not always clear who foots the bill in a used lease.
There’s been a significant increase in salary sacrifice leases for used EVs. This is a really attractive route for employees, lower monthly payments (taken before tax) and access to EVs they might not have otherwise considered.
Business Contract Hire is also Up
Business Contract Hire for used EVs has jumped 174%, according to the BVRLA. Leasing firms see ex-fleet EVs as a sweet spot, they’ve taken some depreciation already, but there’s still plenty of value to capture.
TCO (Total Cost of Ownership) is Very Attractive
The financial case for used EVs is strong. According to BVRLA analysis, if you mostly charge at home, you could save on average £5,317 over five years, compared to a petrol car. Even with more public charging, savings are still substantial (around £3,573 over five years for some users). On top of that, many of these used EVs still benefit from manufacturer battery warranties.
The Upsides for You
Lower Monthly Costs - Leasing a used EV tends to cost less per month than leasing a new one because depreciation is smaller, leasing companies are more confident and the cars are already broken in.
Lower Risk - You’re not taking the full hit on depreciation, leasing companies absorb some of the value drop.
Access to Better EVs - Because of the boom in ex-lease stock, you might be able to afford a higher-spec EV than if you were buying outright.
Running Cost Savings - Even used EVs tend to be cheaper to run than equivalent petrol or diesel cars, especially if your charging setup is good.
Sustainability - Leasing a used EV extends its life and reduces waste, environmentally it’s a smart move.
What to Watch Out For - The Risks & Downsides
Used EV leasing sounds brilliant, but as always, there are caveats. Here are some things you’ll want to think carefully about:
Battery Health - So, should you consider leasing a used EV?
If you’re someone who wants to go electric but doesn’t want to buy new, or you want lower monthly payments, less risk and a flexible route into EV ownership used EV leasing is absolutely worth exploring. The surge in popularity shows that this isn’t just a niche, it’s becoming a core part of the EV story in the UK.
Here’s what you can do to make a smart decision:
- Ask for a battery health certificate or SoH report if you’re leasing.
- Check lease terms carefully: mileage limits, maintenance, end of lease options.
- Understand the residual value risk, what happens if values drop more than projected?
- Think about how long you want to keep the car, if your lease ends and the car is still good, is there an option to buy?
- Factor in your charging habits, running costs depend hugely on whether you charge at home or use public chargers.
Why this Matters for the EV Transition - The Bigger Picture
- The used EV leasing boom is a truly pivotal moment for the UK’s electric transition. Rather than just relying on new car incentives, more drivers are accessing EVs through the used market, that’s good for accessibility, affordability, and sustainability.
- For leasing companies, re-leasing ex-fleet EVs helps protect residual values and reduces the financial risk associated with steep depreciation.
- For the wider industry, a thriving used EV segment could drive more confidence in long term EV adoption, not just for first time buyers, but for second and third owners too.
Conclusion
Used EV leasing isn’t just a trend, it’s rapidly becoming a mainstream way to go electric in the UK. With 166% year on year growth in contracts, the eagerness is clear. The benefits for drivers are real, lower cost, lower risk and access to modern EVs without paying full new car prices. But, like any financial decision, it’s not without its risks, battery health, contract terms, residual values, all matter.
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