SCHAUMBURG, Ill.–The increase in the number of people leasing electric vehicles (EVs) is apparent in new data from Experian.

Experian’s State of the Automotive Finance Market Report: Q4 2024 shows more than 50% of new EV purchases were leases, and EVs accounted for nearly 20% of all new vehicle leases during the quarter. 

By comparison, EVs only made up 2.11% of new vehicle leases in Q4 2020, the report found.

“Leasing has always been a cost-effective alternative for consumers hoping to drive away with a more palatable monthly payment—EVs are no different,” Melinda Zabritski, Experian’s head of automotive financial insights, said in a statement. “But it’s not just affordability. Leasing offers consumers the opportunity to buy an EV without worrying about the potential resale value down the line. With many EVs set to come off-lease in the next few years, it will be interesting to see how the used EV market unfolds.” 

Differences Apparent

According to Experian, while the difference between the average monthly loan and lease payments are significant ($142), the difference in the average monthly loan and lease payments for EVs is even higher. In Q4 2024, the average payment difference between a loan and lease across all EVs was $175. 

“Interestingly, non-luxury EVs generated the greatest payment difference at $205, meanwhile the difference between the loan and lease payment for luxury EVs was only $98,” Experian stated.

Vehicle Marketshare

The Experian data show that among the most leased EVs, the Tesla Model 3 continued to maintain its lead at 12.20%, followed by the Tesla Model Y (9.08%), Honda Prologue (8.84%), Hyundai IONIQ 5 (6.88%) and Chevrolet Equinox EV (5.92%). The Tesla Model 3 (2nd), Tesla Model Y (5th) and Honda Prologue (6th) were also among the top 10 of all leased vehicles. 

A Market Shift?

Expanding beyond the EV market, the report showed more financing is comprised of late-model vehicles (model years up to three years old). More than 66% of loans were for vehicles up to three model years old in Q4 2024, up from 63.92% the previous year,” Experian said.

“Part of the shift could be attributed to lower interest rates and average monthly payments for new vehicles,” Experian stated. “While the average loan amount for a new vehicle experienced a modest increase during the quarter reaching $41,572, up $1,088 from the previous year, the average monthly payment decreased $1 to $742. The stability in average monthly payment is likely driven by the Consumers leasing EVs at a high rate, accounting for nearly one-in-five of all new leases decrease in interest rate during the quarter. In Q4 2024, the average interest rate for a new vehicle was 6.35%, down from 7.16% a year ago. 

“Meanwhile, the used vehicle market observed positive trends among financing attributes,” the Experian report continued. “The average loan amount for a used vehicle decreased $344 year-over-year to $26,468 and the average monthly payment dropped $10 to $525 over the same period. Similarly, the average interest rate declined from 11.97% to 11.62%.”

Similar Declines

Despite the lower average loan amounts and monthly payments, all risk segments experienced declines in used vehicle financing, Experian reported.  

“With manufacturer incentives, the continued resurgence of leasing and lower interest rates, we’re seeing consumers across the board shift back into the new market,” continued Zabritski in  a statement. “That said, the market remains fluid. Similar to EV market, as vehicles come off lease over the next 2-3 years and late-model vehicle availability increases, how will that impact consumer purchasing behavior?” 

Additional Findings

Experian said additional findings for Q4 2024 include:

• 30-day delinquencies increased from 3.08% in Q4 2023 to 3.17% in Q4 2024, while 60- day delinquencies rose from 0.96% to 0.99% over the same period. 
• The percentage of used vehicles with financing reached 36.50% in Q4 2024, down from 38.72% a year ago. 
• The average credit score for a new EV declined from 773 in Q4 2023 to 767 in Q4 2024.
• Bank market share for new vehicle financing grew to 24.83%, up from 20.17% the previous year. Meanwhile, banks saw their market share of used vehicle loans increase from 26.10% in Q4 2023 to 28.68% in Q4 2024. 
• More than 30% of prime and super prime consumers are choosing to lease.