EV Financing Surges as Tax Credit Ends, Says Experian

In response to the end of the federal EV tax incentive, EV financing surges with a marked rise in both loans and leasing for electric vehicles, according to recent data from Experian’s automotive finance report.

Sharp Rise in EV Financing and Leasing Activity

Experian’s Q3 2025 “State of the Automotive Finance Market” report shows EVs now make up 11.36% of new-vehicle financing, up from 10.14% in the previous year.
Leasing in particular gained momentum: over 56% of consumers opted to lease a new EV during the quarter, compared to roughly 46% a year ago.
As a result, EVs now represent one in four new leases, a significant jump from under 18% just a year ago.

Top leased EV models include names such as Tesla Model Y and Tesla Model 3, which remain among the most popular choices for lease agreements.

Shifting Financing Patterns: Higher Loan Amounts and Longer Terms

The report finds that the average new-vehicle loan amount rose to US$42,332, up by about US$1,378 from last year. The typical monthly payment increased from US$735 to US$748 over the same period.
On the used-vehicle side, loan amounts also climbed, reaching about US$27,128, and average monthly payment grew modestly.
Longer loan terms are becoming more common: nearly 30% of new-vehicle loans now span 73–84 months, and a growing portion exceed 85 months reflecting a trend toward spreading out payments to make higher vehicle costs more manageable.

Why This Surge Is Happening Now

The expiry of the EV tax credit at the end of September appears to have triggered a rush among buyers and lessees, many looking to secure financing or leasing deals while electric vehicles remained relatively more affordable.
Leasing likely offered an attractive path amid higher sticker prices, lower upfront cost, smaller monthly payments compared with buying outright, helping sustain EV demand despite subsidy removal.

Additionally, improvements in financing availability, along with growing acceptance of EVs, may have contributed to this uptick.

What This Means for the Auto Market & Buyers

• Leasing as a back-door enabler: With EVs making up 25% of new leases, leasing provides a viable route for consumers wanting EV ownership benefits without the upfront cost.
• Longer-term loans becoming normalized: Extended loan terms may help buyers cope with higher vehicle prices, but could raise questions about long-term debt burden or resale value.
• Used-EV market implications: As more EVs get leased now, the used-EV pool may expand in coming years potentially increasing availability but also affecting residual values.
• Consumer flexibility matters: With subsidies gone, financing and leasing terms will likely play a bigger role than ever before in whether consumers opt for EVs especially for cost-sensitive buyers.

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