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Are Electric Cars Cheaper Than Petrol Or Diesel?

The lifetime costs of running an electric car really have fallen below those of a comparable petrol model, according to a report by the insurer Direct Line.

In spite of the higher list price of electric cars, which accounting for government grants of up to £2500, is still around £5,000 higher than comparable petrol models, electric vehicles are significantly cheaper to run. Made even better by fantastic Home or Public charging offers when you lease a vehicle with us at Vanarama.

Their analysis (which was carried out before the Government electric vehicle grant was reduced from £3000 to £2500) revealed that:

-       On average an electric vehicle will cost its owner £3,752 a year over the course of its life (including lease or purchase costs), compared to £3,858 for a petrol car, resulting in an annual saving of £107.

-       Annual running costs (with the sale or lease costs removed) average £1,742, or £33.50 per week for an electric car, which is 21% cheaper than the running costs of a comparable petrol fuelled car, at £2,205 per year or £42.40 per week.

-       Annual tax and maintenance costs (including MOTs and servicing) for electric vehicles are 49% lower than for petrol models.

-       While annual refuelling costs are an impressive 58% less for electric vehicles.

The research also revealed that electric vehicles hold their value better than petrol equivalents, with analysis of second-hand car data revealing that a year-old electric vehicle only loses 12% of its value, compared to a 24% write down for petrol models.

While selling on the car isn’t a direct concern for drivers at the end of a lease, the expectation that electric vehicles will hold their value better could lead to lower overall leasing costs, as electric cars may retain more resale value for the leasing company.

Overall Costs Of Running A Comparable Electric And Petrol Vehicle

Expenditure type

Electric car

Petrol car

Difference

Comparison

Up-front purchase cost

£27,921

£22,976

+£4,945

22% more expensive

Fuel

£343

£824

-£481

58% cheaper

Tax and maintenance

£227

£443

-£216

49% cheaper

Insurance

£1,172

£938

+£234

25% more expensive

Total annual running cost

£1,742

£2,205

-£463

21% cheaper

Total lifetime cost

£52,133

£53,625

-£1,492

3% cheaper

Annualised cost

£3,751

£3,858

-£107

3% cheaper

Annual CO2 emissions

0kg

1,867kg

-1,867kg

100% lower

Source: Direct Line Car Insurance 2020

An accompanying survey to the report also revealed that almost two-thirds (61%) of respondents said they would make the switch to an electric car as the technology and green car market continues to grow. Direct Line calculated that if all of these motorists were to convert to an electric car it could result in a combined annual saving of 24.3 million tons of carbon emissions.

The latest Department for Transport data shows the UK has already surpassed 215,000 fully electric cars on the road, compared to just 99,374 in 2019. That figure climbs to over 455,000 when you include plug-in hybrid models.

2020 saw the biggest ever annual increase in the number of EVs registered in the UK. More than 175,000 electric cars were sold – a growth rate of 66% on the 2019 registration figures.

So there's never been a better time to upgrade to electric. Take a look at our latest electric car deals today.

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