How long does it take to save money with an electric car?


Motorists are driving a car-buying revolution — with electric vehicles accounting for one in three new car sales. 

There are 400,000 already on the roads, up from 130,000 five years ago. And this figure is rising rapidly as the Government seeks to ban sales of new petrol and diesel cars and vans by 2030.

Surging fuel prices are also boosting their popularity. So much so that UK motorists bought more electric vehicles last year than in the previous five years combined.

But they don’t come cheap — and many people will be wondering if it’s worth the investment.

Surging fuel prices are boosting electric cars’ popularity – so is it worth the investment?

Electric cars are more expensive to buy 

Electric cars typically cost more than petrol equivalents. For example, a Vauxhall Mokka-e is £5,000 more expensive than the same model in a 1.2-litre petrol version. 

The cheapest new model on the market is currently the SEAT Mii Electric at £21,300, while the UK’s best-selling electric car is Tesla’s Model 3, which starts from around £45,990. 

However, the Government currently provides a grant worth up to £1,500 towards electric cars under £32,000.

While there is no formal deadline for this grant, the maximum amount has been cut by £500 every year since 2018, when it was worth £3,500. The money should automatically be applied by dealers.

However, it is important to note that almost all new cars are bought on finance and not outright and this can narrow the gap in terms of monthly costs, as depreciation is slower.

A highly popular method is personal contract purchase. How PCP deals are structured means a relatively small deposit and monthly payments spread over a set time period, for example 36 or 48 months.

The biggest financial outlay comes at the end of the contract, when the motorist can choose to pay a balloon payment to keep the car, which is the estimated value of the vehicle at the end, or many people choose not to pay that and hand it back. 

For example, Peugeot’s e208 Active Premium costs £30,195 on the road, or it offers a PCP deal with a £8,450 customer deposit, and 6.9 per cent interest rate, at £249 per month, with a £12,177 balloon payment to keep the car at the end.

Some employers also offer a salary sacrifice scheme, cutting the cost by paying for the car each month out of gross pay, before tax and other contributions are deducted. 

If your employer offers this then it can save a substantial amount of money on the monthly payments on a PCP scheme in return for a small benefit in kind payment.

Buying an electric car second hand

Older electric cars won’t boast the same range as newer models, but can be much cheaper, and still come with lower servicing and maintenance costs than a petrol or diesel vehicle.

Used electric cars with a good range can be picked up for around £12,000.

Early Nissan Leafs and Renault Zoes, which were launched in 2011 and 2012 and have more limited battery capacity, can go for £4,000.

Some buyers worry about battery deterioration in a used model — but supporters say there’s still life and value in them.

Even the decade-old first batch of easily available, usable electric cars in the UK — the Nissan Leaf, Renault Zoe and BMW i3 — could benefit some drivers, according to Elle Kiai at electrifying.com.

‘They may only have around 50 miles from a full charge. For those driving less than 30 miles per day and who plug in every night, they still offer very low running costs, and are in high demand.’

Count me in: Petrol was three times the price of power

Linda with her second-hand electric Nissan Leaf Acenta

Linda with her second-hand electric Nissan Leaf Acenta

When Lisa Ingram’s VW Golf was written off in a car crash in March, she decided it was a good time to switch to electric.

‘We’ve been wanting to go electric for a while,’ she says. ‘Especially as we run an eco-organic cotton business, LittleLeaf Organic.’

However, Lisa says she had felt it was more sustainable to use her old petrol-driven Golf until it died.

‘When my car was written off by an uninsured driver, I finally bit the bullet and test drove electric vehicles,’ she adds.

Lisa, who lives with her husband in north-east Hampshire, drives about 10,000 miles a year, mostly picking up and dropping off her four children.

After researching and test-driving a Hyundai Ioniq and VW ID.3, she was shocked to be told there would be a wait of six months to one year for delivery.

Needing a car now, Linda opted for a second-hand electric Nissan Leaf Acenta. It was four months old, with fewer than 2,000 miles on the clock.

The car cost £24,350, and Lisa’s insurance rose by £118.

She adds: ‘My old Golf could do 500 miles for about £65 at today’s petrol prices. The Leaf costs about £20 to do the same — though it would need several charges.’

What are the electric car expenses

The average annual running cost of an electric vehicle is now almost £600 cheaper than a petrol-fuelled car, according to research by Compare the Market. This includes the price of insurance, fuel, and road taxes.

Nick Harvey, from Energy Saving Trust, says: ‘Most electric vehicles, from a hatchback through to an SUV, run between two to four miles per kWh of electricity. 

That means at today’s prices, you will pay between 7 to 14p per mile — compared with 26 to40p per mile for petrol, and 21 to 30p per mile for diesel.’

Electric vehicles are also exempt from paying to enter Clean Air Zones in major cities, as well as Congestion charges and Ultra-Low Emission Zone fees in London.

Owners have to apply for road tax — but it’s free. MOTs and servicing are still required, but the latter tends to be cheaper.

Internal combustion engines in petrol and diesel cars have around 2,000 moving parts, whereas an electric motor has around 20.

‘There’s simply less to go wrong,’ says Hugo Griffiths, of car buying site Carwow.

When do I save with electric over petrol?

If you look at the overall cost of buying and running an electric car over petrol, you will need to be patient to save money.

But it’s worth noting that an electric car is likely to hold its value better than a petrol car, so you should factor depreciation into your calculations.

If you don’t do that, money saving looks like it takes a long time. Experts estimate that savings on standard electric vehicles typically kick in within ten years.

This is because over time the money saved on running costs will wipe out the upfront premium you pay for an electric car.

For example, a new three-door Mini costs £6,935 more than its petrol equivalent — though this falls to £5,435 after factoring in the £1,500 Government grant currently available for those buying electric vehicles.

But this will be £589 cheaper to run per year than a petrol-fuelled car, according to Compare the Market. This is because petrol typically costs motorists £943 annually and they have to pay £165 for road tax.

By comparison, the running cost of an electric vehicle is £519 per year and drivers are exempt from road tax.

In all, it would take the owner of the Mini nine years to make back the £5,435 premium they paid for an electric car, the comparison site’s research shows.

However, more expensive models of electric cars take longer to become cost effective — despite the fact they are more efficient.

A Tesla Model 3 costs £42,500, which is £17,000 more expensive than its closest petrol equivalent, a 3-series BMW.

According to Compare the Market, buying a Tesla would save drivers £625 a year on average compared with a petrol vehicle.

So it would take around 27 years to save back the premium paid for the electric car.

These figures do not factor in the cost of servicing a vehicle, which is usually lower for electric cars as they are less prone to wear and tear.

The production of petrol vehicles is being phased out by 2030, which could boost savings down the line as electric cars are expected to get cheaper.

If you buy an electric car on finance, monthly repayments may not be too much higher than with a regular model because they have a higher resale value. This means you can benefit sooner.

Count me out: I got two parking fines while charging 

Roz Colthart decided to test electric vehicles with a ‘try before you buy’ offer, but was hit with fines. 

Roz, who lives in Edinburgh and runs beauty business Salon Studios, hired a Peugeot 208 via a subscription company.

‘I was enthusiastic and wanted to reduce my carbon footprint, but without a charger on my drive it didn’t go smoothly.’ 

Roz Colthart with her Mini Countryman petrol-electric hybrid

 Roz Colthart with her Mini Countryman petrol-electric hybrid

She would use a public charging point while doing a supermarket shop, or sitting in her car catching up on emails. ‘It was a novelty at first,’ she says. ‘But it started to feel like a waste of time, especially when the chargers were occupied.’ 

She then received two £60 parking fines in the post for overstaying a time limit. ‘I was so confused — I wasn’t parking, I was charging!’ says Roz. ‘I thought my contract was with the charging company, who rented the space from the landowner, rather than the car park.’ 

She is trying to contest the tickets, but has been told signs in the car park are clear. Roz has since bought a Mini Countryman petrol-electric hybrid for £27,000. 

‘I don’t think the infrastructure is ready to go fully electric,’ she adds. ‘I will go for it one day, but only when there are more charging stations and problems are resolved.’

How will you charge your car?

Costs depend on a car’s size and model, its battery capacity, and where you are charging up — at home, work or possibly via a public provider.

It costs around £15 to fully charge a typical electric car with a 60kWh battery and 200-mile range. This is based on the average domestic electricity tariff of around 28p per kWh.

More than three quarters of car charging takes place at home, so it’s worth getting the set-up right.

If you have off-street parking, you have two choices: plugging into a standard three-pin socket, or installing a home charging point, which speeds up the process.

Firms offer home charge points, but you need to budget £700-£1,000 for a charger and installation.

Most now offer financing deals, with costs sometimes bundled into the car’s purchase price. The Government offers a £350 grant for tenants, landlords, and flat-owners.

Opting for a ‘smart’ charging point, which connects to an app on your phone, means you can programme it to charge your car only at certain times. This suits people with electricity tariffs that are cheaper at night.

EDF, for example, has a 4.5p per kWh GoElectric tariff, and Octopus Energy offers a 7.5p per kWh Go tariff. The former could cut the cost of charging to as little as £5.

There’s a handy comparison tool for energy tariffs for electric vehicle owners in the guides section at smarthomecharge.co.uk.

Charging cars away from home 

It’s more expensive to charge your car away from home. Those using public chargers will pay almost £80 a month more, according to electrifying.com.

‘Fast’ public chargers are slower than ‘rapid’ chargers, but speedier than the average home supply.

They are often built into bollards in car parks at gyms, supermarkets or shopping centres, usually adding about 50 miles of range per hour. 

Meanwhile, rapid and ultra-rapid chargers, such as Tesla’s Super Charger, are usually located at motorway services. There are 5,751 rapid and ultra-rapid charging devices across the UK.

‘Drivers will spend ten to 45 minutes at a rapid charger on average,’ explains Danny Morgan, of installer Smart Home Charge.

‘In my experience, by the time I’ve gone into a service station, used the toilet and grabbed a coffee, my car has generally charged enough for what I need,’ he adds.

Some chargers, including those in Tesco and Sainsbury’s car parks, are free. Some workplaces also offer free charging to incentivise staff to commute in a greener way.

Use apps or websites such as ZapMap and A Better Routeplanner to find one of 50,000 public charging points in more than 18,000 UK locations.

Watch the electric car public charging parking costs 

Some electric vehicle drivers have complained about being fined by private parking operators while they have been charging their vehicles.

Penalties of up to £120 have been issued by private parking firms claiming drivers overstayed a maximum period at service stations, or failed to pay for parking while using public chargers in hotel or shop car parks.

Make sure you check the rules. For example, some Lidl supermarkets require drivers to buy something if they are going to use a charger. It used to be the case that insurance premiums were more expensive for electric cars. But the average policy now costs £297 a year compared with £310 for a petrol or diesel mode, according to insurer LV=.

What about battery life? 

How far you drive, how fast, and how often you need to charge will impact battery life.

But most manufacturers now offer an eight-year, 100,000-mile warranty on electric car models.

Mr Harvey adds: ‘Servicing has improved. Failed cells in a battery can be identified and replaced without having to replace the whole battery. It’s easier to maintain the battery at a lower cost.’

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