Why This Matters for Leasing Customers
The UK Government has confirmed plans to introduce a pay-per-mile tax on electric cars from April 2028, known as the Electric Vehicle Excise Duty (eVED).
The aim is to replace lost fuel duty revenue as drivers switch from petrol and diesel vehicles. For leasing customers, this change will impact running costs, budget planning, and the total cost of ownership (TCO).
However, even with this new charge, electric vehicles remain cheaper to run than petrol or diesel models — especially when leased with fixed monthly payments and home charging.
What Has Been Announced
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Start date: April 2028
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Rates:
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3p per mile for fully electric vehicles (BEVs)
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1.5p per mile for plug-in hybrids (PHEVs)
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In addition to VED: eVED will apply on top of standard road tax, which electric cars started paying from 2025.
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Applies to: Cars only. Electric vans, buses, motorcycles and HGVs are exempt at launch.
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Policy stage: A public consultation is underway to finalise how payments will be collected and verified.
How It Will Work
The current proposal suggests:
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Annual or monthly payments: Drivers may pay eVED annually when renewing VED, or via monthly Direct Debit.
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Odometer-based reporting: No GPS tracking — mileage will be confirmed through MOT odometer readings and self-reported updates.
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Dealer pre-pay option: When buying or leasing new vehicles, drivers could pre-pay for a mileage allowance included in the vehicle contract.
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Privacy assured: The system focuses on mileage, not journey tracking or location data.
Example: Annual Cost Estimates
| Annual Mileage | BEV @ 3p/mi | PHEV @ 1.5p/mi |
|---|---|---|
| 6,000 miles | £180 | £90 |
| 8,500 miles (UK average) | £255 | £127.50 |
| 10,000 miles | £300 | £150 |
| 12,000 miles | £360 | £180 |
| 20,000 miles | £600 | £300 |
For most drivers, eVED will add around £200–£300 per year in extra cost — roughly £15–£25 per month depending on mileage.
What’s Not Changing
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Company Car Tax (BiK): EVs still benefit from very low BiK rates, making them cost-efficient for company car and salary sacrifice users.
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Charging Support: The Government confirmed further investment in EV charging infrastructure and home charger grants.
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Grants for Vans: Electric vans remain eligible for Plug-in Van Grants and exempt from eVED at launch.
How This Affects Leasing
Personal Leasing
For individual drivers, the impact of eVED is minimal. At around 3p per mile, it’s far lower than the cost of fuel for petrol or diesel cars. Home charging remains significantly cheaper — even when including the new tax.
Adding a small allowance (around £15–£25/month) into your budgeting makes it easy to stay ahead.
Business Leasing & Fleets
Fleet operators and company car drivers will see clearer mileage reporting thanks to odometer verification.
The good news?
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Electric vans are exempt at launch, keeping business leasing highly cost-effective.
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Fleet electrification remains a priority, especially for organisations reducing carbon footprints and low-emission zone costs.
It’s still smart to build a 1–2p per mile buffer into fleet cost planning for future adjustments.
Practical Tips for Drivers & Fleet Managers
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Set accurate annual mileage when arranging your lease — it will align your eVED estimate with your actual usage.
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Charge smartly: Use off-peak or workplace charging to keep your per-mile energy cost extremely low.
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Choose efficient EVs: Smaller models and those with heat pumps reduce consumption.
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Use maintenance-inclusive leasing: This protects you from unexpected servicing costs while you manage eVED payments.
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For fleets: Implement telematics or mileage trackers for reporting and cost control.
Frequently Asked Questions (FAQs)
Why Leasing Still Makes Sense
Leasing remains the most predictable and cost-efficient way to drive electric.
You avoid depreciation, pay a fixed monthly cost, and can change vehicles easily as technology improves. Even when factoring in eVED, leasing an EV offers:
✅ Lower total cost of ownership than petrol or diesel
✅ Zero congestion and ULEZ charges
✅ Warranty and breakdown cover
✅ Maintenance and tyres included (optional)
Explore Electric Car Leasing Deals
✅ Fast & Free UK Delivery
✅ Ready to Drive – Immediate Availability
✅ Full Maintenance & Tyres Included
✅ No Deposit Option Available
About Us
Stable Vehicle Contracts has helped thousands of UK businesses lease reliable vans since 2009. As part of a main Volkswagen and Audi dealership group, we offer fixed monthly pricing, expert guidance, and fast UK-wide delivery. With 1,500+ five-star reviews, we're trusted by local trades and large fleets alike.