Leasing an electric car via your business - should you be including maintenance or not?

Should you include maintenance when you lease an electric car via your business?

Moving your business, and the company car workforce, into an electric fleet will bring about a number of questions and queries. As we have previously covered, there are some formidable tax and ethical reasons to move your company to BEVs, so we won’t cover this too heavily in this guide. Indeed, we will be looking at the notion of maintenance, which does gets raised by many of our customers during their journey into an EV.

This isn’t just because of the lithium batteries; this is very much down to the primary financial product which we offer - Contract Hire (leasing).

At e-car lease we offer new, or nearly-new pre-registered, vehicles. For you this means you have the benefit of a manufacturer warranty (or the balance thereof) which does assist in covering any defects or issues which arise through no fault of your own.

However, a warranty is not linked to the maintenance of your vehicle / fleet and should not be considered as a replacement for a service, maintenance or tyres package. It is essential that you do maintain your vehicle properly and in accordance with the manufacturer guidance, in order to preserve the warranty which protects you.

To answer a common misunderstanding - the perception that an EV does not need servicing or maintenance is completely untrue. While there are less moving parts and cheaper costs, there are still some undertakings which you need to see through.

What maintenance does an EV generally need?

The following elements below will generally need some form of review:

•  Electric Motor / Battery
•  High Voltage Cables
•  Brakes
• Wheel Alignment and tracking
•  Suspension
•  Cabin Filtration
•  Air Conditioning
• Tyres  

Every manufacturer will have different obligations when it comes to the upkeep. As our quotation system shows, or on the manufacturer website, the vehicle will generally need a service every 1 - 2 years or every 10,000 - 20,000 miles.

In most cases, the vehicle will provide you with a countdown as to when you need to organise the servicing. In the case of tyres, there is an understanding that you will replace the tyres when the tread falls below 1.6mm, which is the legal minimum these must have.

However, if your tyres do incur damage or punctures, there is the same obligation to replace. This isn’t just about following manufacturer recommendations, or your finance company’s policy, this is about adhering to a legal requirement.

But how is servicing managed under a lease?

In our contract hire industry the phrases driver-maintained and funder-maintained are used to describe the obligations and arrangements.

In the case of the former, the customer (your business / the driver) are undertaking all responsibilities for the running of the vehicle. As standard, the prices shown on our website are driver-maintained, so there are no additional costs for this.

The customer must ensure that all regular services are carried out, all tyres are replaced accordingly and any MOTs are also undertaken on the vehicle’s 3rd anniversary. In contrast, a funder-maintained arrangement will bring about an additional cost, which your sales team / broker can organise before the vehicle is delivered to you. This does include the upkeep and management of your vehicle, with all servicing, maintenance and tyres being included.

But as a broker, not a funder, the funder-maintained packages on offer will adjust according to their policies. For example, some finance companies will only cover tyre replacement for wear and tear whereas others will include puncture and damage replacements.

In addition, some finance companies will ensure the EV goes to a main dealership or provide you with breakdown recovery for the duration of the lease. Tyres are very much a pressing matter for EVs, as tyres are specifically designed for their purpose. Indeed, because the EVs do weigh more due to the battery construction, the tyres are designed to manage this facet.

While ordinary tyres with the same size, rating and branding can be purchased, these will be subject to premature wear and will not have the reinforced sidewall which many EV tyres possess. EV tyres are also designed to minimise rolling resistance too - they have specifically designed tread, the tread provides maximum grip with reduced resistance and tyre tread is designed to manage maximum torque. In using the correct tyres, you minimise the wear and therefore the expenditure on tyres.

For a business, in using a funder-maintenance package there is a practical consideration in that you can effectively outsource much of the fleet management to the experts at the actual finance company.

Having a number to call for all regular servicing, maintenance aspects, tyres replacement and breakdown recovery, does minimise the amount of time your employee’s vehicle is off the road.

It also minimises your business spending too long organising these administrative matters. As many accountants will confirm, the maintenance you pay per month is not only tax deductible but the VAT you pay on this service is wholly recoverable.When you build this into your fleet policy, you need only organise any windscreen replacement (via your insurance company), motor insurance and a fuel / charging policy. Everything else is covered.

Ultimately, this is a cost and administrative burden which you must either undertake to pay ad-hoc or to manage via regular monthly payment. As your contract hire broker, we will not enforce that you do anything and will always provide you with enough information based on your facts and circumstances to help you make a good decision for you / your business.

One of our local customers, from Greater Manchester, added yet another electric vehicle to their fleet. In terms of the car shown, the BMW i4 GRAN COUPE 250kW eDrive40 M Sport 83.9kWh 5dr Auto [Tech Pack] Pure (PEV), this is based on the following configuration:

•  Black Sapphire - Metallic Paint
•  Alcantara/Sensatec - Black with contrast stitching in blue
•  Aluminium rhombicle anthracite interior trim
•  18" M aerodynamic alloy wheels in bicolour with mixed tyres - style 858M
•  Mode 3 charging cable

And how does the BMW i4 perform?

I4 eDrive 40 - with a 81 kWh usable lithium-ion battery this RWD car will offer 0 – 62 times of 5.6 seconds, 118 mph top speeds and 250 kW (or 335 hp). Expect a combined winter range of 265 miles with warmer weather allowing for 370 miles - a combined range of 320 miles.

On charging, the 11 kW AC max will allow 8 hour and 45 minute 0 – 100% charging times with the 207kW DC maximum allowing 31 minute 10 – 80% times. This has a fuel equivalent of 159mpg. And the Heat Pump is standard. It has a 470L cargo volume. There will be a towing capacity of 1600g (Braked) and 750kg (Unbraked). There is no Bidirectional charging with this car confirmed.

Need more help or advice in maintaining your EV?

Just get in touch with our team on 01942 910 001 or by emailing us at [email protected]

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