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Electric car grant axed - here’s everything lease customers need to know

The Government has announced the end of the £1,500 grant given to motorists to help them purchase a clean, green electric car.

And here’s everything you need to know about how that might affect you as a lease customer.


The so-called ‘Plug-in Car Grant’, or ‘PiCG’, has been around in some form since 2011.

And the idea was simple - to incentivise electric vehicles so that more motorists would join the EV revolution and help the Government meet its emissions targets.

At that point in time 10 years ago, both plug-in hybrid and electric cars attracted a grant of up to £5,000.

But, over the years, that grant has slowly dwindled in both monetary value and scope.

Most recently, a grant of up to £1,500 was available to customers looking to purchase a fully-electric car priced under £32,000.

And now that subsidy has ended with immediate effect.


The Department for Transport says the funding will now be used to improve access to public charging points, as well as to encourage the purchase of electric vans, motorcycles and taxis.

Meanwhile the sale of new petrol and diesel cars will be phased out by 2030 and all new cars and vans should be ‘zero emission’ by 2035.

How does this affect personal lease customers looking to drive an electric car?

The good news here is that lease customers will potentially feel the effects less than those looking to purchase a vehicle outright.

In the past when you leased an electric vehicle, the Plug-in Car Grant was deducted from the cost of the vehicle and then spread evenly across the duration of the leasing contract.

If you’re buying outright, on the other, you immediately have to find an extra £1,500 to pay up front.


And remember that with leasing you can also alter the duration of the contract and the annual mileage figure to find a monthly leasing cost that suits your budget. As a rough rule of thumb, the longer the contract, the lower the mileage and the higher the initial payment, the lower your monthly lease fee will be.

By exploring those options, the impact of the loss of the grant can be reduced.

It’s also worth bearing in mind that with an electric car you’ll pay zero road tax, and they also fall into the low 2% Benefit in Kind (BIK) tax bracket if it’s a business lease.

What and who can still qualify for an EV grant?

Again, good news on this front - as there are still eight categories of vehicle that attract a Government grant.

They are:

  • Wheelchair accessible vehicles
  • Motorcycles
  • Mopeds
  • Small vans
  • Large vans
  • Taxis
  • Small trucks
  • Large trucks

You can check out the Government website for all of the details.

Those grants vary in size - up to £500 for an electric motorcycle and up to £5,000 for large vans, for example.

And remember that more and more manufacturers are bringing electric vans to market, with vehicles like the Vauxhall Vivaro-e enjoying new-found popularity.


What other grants are available?

The other grants up for grabs from the Government relate to installing a charging point at your home or business.

And that’s often a really important part of getting the most out of an electric vehicle, particularly when it comes to taking advantage of cheaper off-peak electricity rates.

The ‘EV chargepoint grant’ provides what the Government says is ‘funding of up to 75% towards the cost of installing electric vehicle smart chargepoints at domestic properties across the UK’.

In reality, that grant is for a maximum of £350 off the installation price.


You’re eligible if you either live in a flat that you own, or if you’re in rental accommodation (flats and single-use properties), but you’ll need to have dedicated off-street parking at your property.

Again, the good thing about ordering an EV with Select Car Leasing is that we’ve partnered with a charging point subscription service.

With Egg, for example, you pay £30-per-month, and that includes installation of a 7kW fast home charging unit compatible with all makes and models of EV, plus free maintenance call-outs within two working days.

There’s also the ‘Workplace Charging Scheme’.


According to the Government blurb, it’s a ‘voucher-based scheme that provides support towards the up-front costs of the purchase and installation of electric vehicle charge-points, for eligible businesses, charities and public sector organisations’.

Companies apply for the incentive and if they’re successful they’ll get up to £350 off the installation fee.

They can also install up to 40 charge points at that reduced rate - and it represents a huge potential saving when you consider that an EV charging installation can cost around £1,000 a time.


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Monday, 20/06/2022