The Cupra Born - is this better on a lease deal? Or should I buy it?

The Cupra Born - should I lease it or buy it?

The era of scarce choice is firmly at an end with electric cars (and vans). As we move through 2022, it has become clear that the UK’s personal, business and salary sacrifice customers are more than catered for, as most manufacturers have moved some, or all, of their product into all-electric solutions.

Indeed, with so much choice, it’s becoming quite difficult to choose the best EV for you or the company - is there really a bad choice? And what is also becoming clear is that customers are now looking at various facets in order to qualify what actually constitutes the perfect BEV; factors like range, charging capabilities / speed, performance and towing capacity are more common. In the hatchback segment, Cupra, a performance offshoot of Seat, really added a jewel when they announced their Born hatch was available to UK customers (previously referred to as the “El Born”).

What does the Born compete with?

This 5dr hatchback is a direct alternative to the VW Id.3, Nissan Leaf, MG 4, Vauxhall Corsa-e and Renault Megane e-tech. With such stellar competition you do quickly understand just why so many of our e-car lease customers do struggle.

But what is becoming clear is that there is very little to go wrong with an EV; they are safe and reliable forms of transport which are allowing many customers to enjoy lower running costs and more fun with their driving. It’s also important that manufacturers produce affordable and value propositions which more UK drivers can enjoy.

Some of the issues with EVs does relate to the initial purchase and / or lease costs, which is mainly due to battery costs, economies of scale and the fact that these are relatively new options compared to traditional combustion engine models. But the outright cost is not all that you or the company should be considering. As part of your suitability assessment, you should be using our e-car lease “Living with your…” tools to help you reach the correct decision, as these help you or the driver understand just how this EV will perform.

And is leasing a Cupra Born better?

To be clear, the majority of EVs which our expert team supply will be based on a finance product which we call contract hire. As you can appreciate from the product description, this is a fixed term contract on a hire, or usership, style product.

Quite commonly, customers will use a vehicle for 2, 3 or 4 year (although 5 years is available too) based on a pre-agreed mileage of 5,000 to 20,000 (EV dependent) and with an initial rental (deposit) which meets their needs and requirements. While contract hire / leasing is crucial to the fleet market, over the last few years this has risen in popularity as consumers move away from ownership and purchase based products.

The reality is that the hassle of buying or selling a vehicle is not always an enjoyable experience and the ability to simply hand the vehicle back is more in keeping with the flexible and subscription focused society which we now live in. Pros of leasing? There is no buying / selling hassle, no deprecation concerns and there are robust options for fixed cost motoring when a funder-maintenance package is included.

Cons of Leasing? For customers who enjoy their vehicle, there is no ability to own it at contract end. If you go beyond contract mileage, you will pay excess mileage penalties. And if the vehicle incurs damage beyond fair wear and tear, end of contract charges will apply.

So, should we buy the electric Cupra Born?

When customers are suggesting they will buy an EV, we always ask them to be specific - cash purchase, hire purchase (HP) or personal contract purchase (PCP) are all used interchangeably when referring to buying the Cupra. One of the most common methods with a new car is to use a PCP, which can appear and sound fairly similar to contract hire arrangement.

The customer will pay an initial payment (deposit) and arrange a contract according to their term and mileage. The only subtle difference is that a final value will be shown on the quote. This is referred to as a guaranteed future value / balloon / final payment. With regards to this sum, a customer will have the option to pay it in order to own the vehicle or simply return the vehicle to the finance company.

To be clear, if you return the vehicle, it will be appraised in exactly the same way as a contract hire vehicle. In contrast, with HP, this is an agreement to buy the vehicle with or without a final payment; you cannot opt to return the Cupra to the finance company in that arrangement. Pros of buying? EVs are shown to last for many years and it is expected that some customers will want to keep them 5 - 10 years.

If you don’t return the vehicle, you are not subject to excess mileage or damage fees. If the EV has a robust residual value, you can benefit from any equity in the vehicle.  Cons of buying? This is often more expensive as the discounts available are reduced compared to contract hire (plus it is interest bearing). If the EV has a poor residual value, the risk of negative equity is absorbed by the customer. The process of buying and selling can be frustrating and difficult.

With regards to buying or leasing your Cupra

This is often down to your appetite to risk and how closely you like to be involved with your EV. Some customers do enjoy the increased flexibility of purchase products, particularly when it comes to buying / selling the vehicle. With limited supply of cars, and vans, at present the value of used cars is certainly elevated.

Obviously this translates to enhanced residual values (and more money in the seller’s pockets). But the contract hire route can be more comprehensive and robust, with the ability to include the finance, maintenance, charge point and even motor insurance. This all-encompassing arrangement, can help create cost certainty and security. Further queries will also arise relating to businesses / companies, who will review the purchase v lease in the context of corporation tax and VAT. Not all finance products are treated equally and your accountant and FD will need to make an informed assessment.

And the amazing Cupra shown here was delivered on a contract hire arrangement to one of our salary sacrifice fleets. In terms of the car shown, the Cupra Born Electric Hatchback 150kW V3 58kWh 5dr Auto Electric, this is based on the following configuration:

•  Vapor grey Solid Paint
•  Dinamica cloth - Granite Grey
•  20" Hurricane machined aero wheels
•  Tech L pack
• Charging cable mod 3, type 2/3 32a

As standard the “3” will include 19” alloys, electrically adjustable and folding mirrors, rain sensors, full LED headlights, dark tinted windows, navigation, rear view camera, 5.3” digital cockpit with 12” infotainment system, HUD, DAB, climatronic air-conditioning, heated steering wheel, keyless-go, heated front seats, front and rear parking sensors, dynamic steering and a mode 3 charging cable. And there are a great choice of colours with Vapor grey, Aurora Blue and Rayeligh Red likely to appear high up on your list. On additional options, consider making the Cupra 3 perfect by adding the heat pump, BeatsAudio and Tech (L) Pack.

What is the range of the Cupra Born?

What is the battery capacity and charging speed on the Cupra Born?

How long does it take to charge the Cupra Born?

What is the company car tax payable on the Cupra Born?

Where can you charge the Cupra Born?

What are the running costs on the Cupra Born?