I leased a Kia EV6 for $137 a month and still upgraded to electric after the incentives disappeared

In 2024, long before the Trump White House eliminated the $7,500 tax credit for electric vehicles, my wife and I scored an incredibly good deal on a lease. We put down about $4,000 and leased a Kia EV6 for an incredible $137 per month. Our domestic cell phone bill is at this rate. This two-year lease was even extended for an additional six months, for a very manageable $148 per month.

There were a few factors in our favor regarding this deal. First, there was, of course, Biden’s $7,500 in incentives. New York State added an additional $2,000 reduction. Additionally, when we entered into this lease, automakers had miscalculated market demand, with a glut beginning in 2023. By September 2024, dealers were struggling to sell electric vehicles fast enough, being stuck with electric cars for more than three months on average, compared to a somewhat healthier 79 days for gas-powered cars. Dealers finance their inventory; the longer they remain unsold, the more they sink into the red. So even though our EV6 Light Long Range Wind cost $51,845, we got it (well, used it) for a very low price.

That was then. Since this fall, with our lease expiring, I’ve been eyeing new electric vehicles, but I didn’t like the prices. Cox Automotive says the average sticker on a new electric whip in September reached a staggering $55,879. However, have you seen the gas prices? We wanted to stay electric. Fortunately, prices for used electric vehicles are much lower. At the time of my research, I saw that CarGurus’s price tracker showed the 2023 Chevrolet Bolt selling for an average of $20,518; the 2024 EV6 at $27,846; and the 2023 Hyundai Ioniq 5 at $27,436.

My goal was to find the right used Ioniq 5. This was the car I wanted in 2024, but there were better deals on the EV6. No shadow of the Kia; we loved it. But we dug the Ioniq 5’s retro-futuristic styling more, and it’s a bit shorter, so it fit better in our very cramped garage.

The problem? We didn’t want to spend more than we would have on a used Honda Civic, which CarGurus showed at $23,967 for a 2023 at the time of my analysis. With the 2023 Ioniq 5 costing an average of $27,436, that’s an average premium of $3,469 over the Honda. The 2023 Bolt is already less expensive than the Civic, but we liked the larger Ioniq 5 and its all-wheel-drive availability.

Maybe you are less price sensitive. But on most people’s budgets, if you’re buying a new or used electric vehicle, you really need to get close to price parity with the gas car for the costs to be calculated. I recently wrote that energy costs still matter more than falling electric vehicle prices. The point of this story is that even though gas prices increased more than 30% in a year while home electricity rates only increased about 5%, if you pay thousands of dollars more for an EV, it will take years to recoup the higher expenses.

I didn’t want to jump into financing a more expensive car just to get a few cents per mile back on the relatively cheaper fuel cost of an electric vehicle. Here’s just a quick calculation, because it’s important to understand the cost of a more expensive electric car, even if its fuel is cheaper.

The easiest way to compare fuel costs, and therefore the payback time for spending more on an electric vehicle, is to measure that tab over 100 miles. On the gas car, that’s 100 divided by the MPG of the car in question, times the price of a gallon of gas. This calculation tells you how many gallons you will burn and the cost of purchasing them. For electric vehicles, you need the kilowatt-hour per 100 mile rating of the electric vehicle you are purchasing, which you can find at fueleconomy.gov. Multiply that figure by the price per kWh where you live, which gives you something like the equivalent fuel cost of driving 100 miles in this electric vehicle compared to the price of a gasoline car.

The all-wheel-drive 2023 Hyundai Ioniq 5 needs 34 kWh to travel 100 miles, which costs $6.22, using the national average kWh price for electricity of 18.3 cents. The 2023 Civic burns 2.9 gallons per 100 miles, which at the current national average price of $4.33 per gallon equates to $12.55. So it’s about twice as expensive to fuel the Civic as the Ioniq 5. That’s $622 for 10,000 miles of fueling the Ioniq 5 versus $1,255 for the Civic. But even saving $633 per 10,000 miles would take more than 54,000 miles to pay off the Ioniq 5’s higher $3,469 rating.

This could tell you exactly why Americans still aren’t buying electric vehicles despite rising gas prices. Another factor is public charging, which is much more expensive. When we received our EV6, we spent about $600 to install a home charger. Yes, it’s an added expense, and I know we have the privilege of owning a home. But it’s a crucial step for any potential EV buyer.

Let’s take a closer look at why the math only works in your favor if you charge at home. According to Kelley Blue Book (KBB), fast charging costs on average more than 55 cents per kWh compared to 18.34 cents for home kilowatts. This amounts to charging about three times as much for fast DC charging. If you plan to charge an electric vehicle at public sites, it’s hard to justify an additional upfront purchase price for that electric car.

There’s another factor: if you finance a more expensive car, you’ll spend more money over the financing period. Even spending less on fuel, those savings are obviously negated with a larger loan payment each month.

To put it in simple terms: Credit reporting agency Experian says the average new car buyer is subject to an interest rate of 6.35% – and that’s a whopping 11.19% for used cars. New car buyers finance a frightening average of $43,610 for 69.5 months.

Even for used cars, the average buyer pays an average monthly payment of $542. We didn’t want to take on that kind of debt or those kinds of conditions. I wanted to finance as little as possible and not have to pay a large monthly payment. Plus, because we were coming out of a lease, we didn’t have a used car to trade in; the down payment should come from savings.

As our lease neared its expiration, I started to get nervous. The war in Iran and resulting rising gas prices have forced Americans to reconsider electric vehicles. According to CarGurus, new electric vehicle sales are down 48% compared to the same time last year, but used electric vehicle sales are up 19%. We all know about supply and demand. Increased demand for used electric vehicles is causing depreciation to slow down or even increase prices. Manheim’s Used Vehicle Value Index, which tracks prices of cars sold at auction, showed a 4.3% increase for used electric vehicles in September alone.

This trend was evident in CarGurus’ numbers at the time of my research. The 2024 Ioniq 5 has become more expensive by a modest half a percent over the past 30 days. Much more dramatically, the average price of a 2023 Tesla Model 3 has ballooned 8% so far this year and 1.76% in the last month alone.

As I felt the pressure of my expiring lease and feared that used EV prices were rising, I searched cars.com almost daily because they use battery health data from a company called Recurrent. (I’m well aware that modern EV batteries last much longer than EV skeptics would have you believe, but I didn’t want to end up with a lemon).

Then I cast a 500 mile net. It’s fair to say that I was prepared to travel relatively far for the best price. I looked at Ioniq 5s between 2022 and 2024. One thing we like about the interiors in this range is that they have physical inputs for many controls, like a real volume knob and a climate interface not buried in the main touchscreen.

The Ioniq 5 SE I found was $21,900. Not bad for a car that originally sold for $49,255. We still have to finance $360 per month at 7.69%, more than 2.6 times the paltry Kia lease of $137 per month. However, it’s a manageable cost for a car we’ll own. Hyundai’s 100,000 mile/10 year battery warranty has been transferred to us, and there is still one year left on the new vehicle warranty.

I should mention that we managed to find this Ioniq 5 around CarGurus’ average price of $21,831, in part due to a glut of leased EVs helping to mitigate the rising costs of used EVs. Earlier this year, Jalopnik reported that depreciating leased electric vehicles could trigger a financing crisis for automakers. Biden’s tax breaks and overproduction forced many people – like us with our Kia – to lease electric vehicles a few years ago. By next summer, up to 19% of all off-lease cars are expected to be electric vehicles. The off-lease electric vehicle wave is expected to peak in 2028, with nearly 800,000 cars returning to dealerships. Even with the current upward pressure on costs, if you look around, you can probably find a good deal.

Now, do I think our new Ioniq 5 SE is perfect? No. It’s just more perfect than a 2024 Fiat 500e, in my opinion. Still, it has 36,000 miles and is two years older than the Kia we returned with only 15,000 miles. It also needs an alignment, probably because I bought the car in Queens, an area that’s not particularly suspension-friendly. But hey, we’re finally getting the electric vehicle we’ve always dreamed of, just a few years later.