Are electric cars really cheaper to run? We crunch the numbers

Electric cars are cheaper to run than petrol or diesel cars. Or are they? Let's take a close look at the maths.



Will the 2020s be remembered as the age of electric vehicles?

At the time of writing, there are around two million zero-emission electric cars on the UK's roads. And as they become more affordable and more familiar, that number is sure to go up.

It's not hard to see why electric cars are attractive to those who can afford them.

They produce zero emissions, making them the most environmentally friendly type of car on the roads. They're also a pleasure to drive, with a quiet, smooth performance and instant acceleration.

And if you ask pretty much anyone, they'll tell you that electric cars are cheaper to run and maintain than their petrol and diesel counterparts. This is rapidly becoming a truism along the lines of "water is wet".

But is it always true? Are there circumstances when it's actually cheaper to run and maintain a less environmentally friendly car?

Well, the simple answer is that for most drivers, an electric vehicle is cheaper to run on a day-to-day basis. These savings, however, depend on factors like home or public charging, insurance costs and driving habits.

And there's no getting around the fact that electric cars are more expensive upfront than other cars.

Before we take a closer look at the relative savings you can make, let's explore the running costs you can expect to pay when you buy an electric car.

What are the running costs of electric cars?

Fuel costs

Petrol and diesel car drivers pay for fuel. Electric car drivers pay for charging.

Charging at home is significantly cheaper than filling up your tank at a petrol station. This is partly because electric motors are much more efficient than petrol engines.

Relying on public chargers, however, can be as expensive per mile as petrol. That's why many drivers choose to mix home charging and public charging. In this situation, electric cars are still cheaper to power than petrol cars.



Maintenance costs

Electric cars have fewer moving parts to monitor and repair. They don't have spark plugs or exhaust systems, they don't need oil changes and regenerative braking means there's less wear on the brakes.

This means servicing an electric car is typically around 20% to 30% cheaper than servicing a petrol vehicle.

Road tax

In this head-to-head, it's a draw. Standard road tax rates for electric cars are the same as low-emission petrol cars. However, electric cars get cheaper rates in the first year of ownership.

Insurance

This is where petrol cars have the edge on electric cars. Electric cars require specialist parts and battery packs, making them more expensive to insure.

In what ways are electric cars more expensive?

The main area where electric cars are more expensive is the upfront cost – though this isn't always the case when compared with high-end petrol cars. As electric battery costs fall, however, so might electric car costs.

Frequently using public fast chargers can significantly reduce the overall savings you make by owning an electric car. You need to charge at home some or all of the time to spend less money than you would on petrol.

Electric car batteries last a long time – often 10 to 20 years. However, it's expensive to replace one outside of the warranty.

And as mentioned, some electric cars are more expensive to insure. This is because repairs cost more than on petrol cars.

The precise savings you make will also depend on the kind of driver you are.

If you charge mostly at home, drive a lot and keep the car for several years, electric cars mostly work out as cheaper than petrol cars.

If, however, you don't drive much and use public fast charging, the savings can work out as much smaller. In some cases, a petrol car might be more cost-effective.



How can you minimise running costs on an electric car?

The number one way to minimise an electric car's running cost is to install a home charger. The costs grow even smaller if you get an off-peak electricity tariff, as many providers offer cheaper rates in the early morning.

You can also make savings by taking advantage of salary sacrifice schemes. This employee benefit involves giving up a portion of your pre-tax salary in exchange for an electric car. Because the payment is made before it's taxed, you make significant savings.

Can I get an electric car on finance?

Yes, it's perfectly possible to get an electric car on finance. The process is very similar to getting a petrol or diesel car on finance. You pay a deposit and then spread the cost of the car into monthly payments.

There are three main types of car finance: personal contract purchase (PCP), hire purchase (HP) and personal contract hire. PCP and HP are by far the most popular options.

PCP finance

PCP is when you pay an initial deposit followed by fixed monthly payments. At the end of the agreement, you can either hand the car back or pay a large balloon payment to own the car.

PCP also protects you from depreciation (the car losing value over time). This is especially useful for electric cars, which tend to depreciate faster than petrol cars.

HP finance

HP starts in the same way as PCP but ends differently. Once you've made all the repayments, you own the vehicle outright.

Personal contract hire

Personal contract hire is similar to leasing. It means you pay fixed monthly payments to use a car. At no point do you own the car and you have to hand it back at the end of your contract.

How much does an electric car cost?

In the UK, the average price of a new electric car is around £41,000. However, entry-level models start from as little as £13,000. Luxury electric SUVs can cost more than £100,000.



Zoomo is the largest independent car finance specialist in the north of England. Are you looking for a used electric car in Newcastle? Complete our quick online finance application today – most customers get a decision within just one hour.