Tesla Model 3 and Y Lead 2025 Leasing Boom as Used EV Supply Surges

Image: Tesla

A massive wave of off-lease electric vehicles is set to hit the used-car market in 2026, a direct result of a leasing surge fueled by now-expired federal tax credits.

According to data from Automotive News and Experian, the Tesla Model 3 and Model Y were the most leased electric vehicles in 2025, anchoring a trend that made EVs more affordable for a broad segment of drivers.

The influx is expected to nearly double the share of EVs in the off-lease market. By the end of this year, electric models are projected to make up almost 15% of off-lease vehicles, up from just 7.7% in the first quarter of 2026. Experts point to the “affordability crisis” in the new-vehicle market as a primary driver, with rising interest rates and higher sticker prices pushing consumers toward the lower monthly payments found in leasing.

In the third quarter of 2025, the average monthly EV lease payment was $172 lower than a standard EV loan payment. Tesla’s dominant models led this charge; shoppers who leased a Model Y paid an average of $498 per month, while Model 3 lessees paid an average of $410. The Model 3’s popularity was so significant that it became the first electric vehicle to break into the top 10 most-leased models in the U.S. back in 2023.

Other models also saw high engagement, with the Nissan Ariya averaging a $335 monthly lease, while the Rivian R1S commanded a much higher $993 per month. However, the landscape shifted abruptly after federal tax incentives expired late last year. EV leasing rates, which peaked at over 22% of new-vehicle leasing in 2025, tumbled to just 12% by December once the credits were removed.

While the total volume of used EVs remains a fraction of the 20 million retail used cars sold annually in the U.S., the current surge represents a turning point for the secondary market. Experian expects off-lease EV volume to continue climbing, potentially peaking in 2028 with nearly 800,000 vehicles hitting the market as two- and three-year contracts from the 2025 boom reach their end.