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Does it pay to buy an electric car?

BY Harvey Jones

12th Aug 2018 Technology

Does it pay to buy an electric car?

A revolution is sweeping our streets as the government encourages motorists to dump their old gas guzzlers in favour of clean and green electric vehicles. But is making the switch to an electric car worthwhile?

According to the International Energy Agency, sales of low emission electric and hybrid vehicles has accelerated by more than a third over the last few year. Of the 1.61 million new cars registered in 2022, 16.6 per cent were electric cars, sending diesel vehicles down into third place for the first time ever, as stated by the Society of Motor Manufacturers and Traders (SMMT). 

"Electric cars cost more to buy but are cheaper to run, especially with the petrol prices rising"

Electric cars cost more to buy but are cheaper to run, especially with the petrol prices rising. You can also get a government-funded grant worth several thousand pounds to cut the purchase cost. So is it time to take a turn down the electric avenue?

Our friends electric

Electric car plugged into a charging port in a car park Credit: Teamjackson

The government wants at least half of new car sales to be ultra-low emission models by 2030, either plug-in hybrid cars that use a petrol engine to extend their range, or pure electric vehicles.

All new petrol and diesel car sales should be phased out by 2040, and by 2050 the UK should be 100% electric.

"All new petrol and diesel car sales should be phased out by 2040, and by 2050 the UK should be 100% electric"

Bumps along the road include a shortage of charging points, and the fact that electric cars can only go so far on a single charge, triggering a modern phenomenon known as "range anxiety”.

So should your next motor be a Nissan Leaf, BMW i3, VW e-Golf, Citroën C-Zero or Kia Soul, or something similar?

Plug it in

Electric car plug Credit: Ralf Hahn

Electric vehicles cost more to buy than petrol or diesel. For example, the e-Golf costs £31,090, against just £18,785 for the petrol-fuelled Golf 1.2L, according to motor industry pricing specialists Cap Hpi.

The government-funded plug-in car grant partially closes the gap, saving you £4,500 on a pure electric car, and £2,500 off a plug-in hybrid.

However, you may also have to budget several hundred pounds for a wall charger for your electric car, although some manufacturers install one for free.

With some cars you can lease the battery rather than buy, from around £70 a month.

Costs and benefits

Electric car plug and petrol pump side by side Credit: algre

Electrics suffer greater depreciation, with the e-Golf losing £15,790 of value after three years, against £10,135 for the petrol version.

They look expensive when they hit the used market and given the pace of technological change, can quickly seem like “old tech”.

However, electrics are cheaper to run with fuel averaging £931 for 10,000 miles a year, against £3,033 for petrol. Maintenance costs are also lower, with far fewer moving parts.

"Electrics are cheaper to run with fuel averaging £931 for 10,000 miles a year, against £3,033 for petrol"

One option might be to buy a three-year old electric, as purchase costs are lower but you still benefit from cheaper service and maintenance, zero road tax and low-cost charging.

Over three years and 30,000 miles, running costs including depreciation for a used VW e-Golf total £7,588, but £9,015 for the petrol version. Insuring an electric car is slightly more expensive, although the difference is marginal.

Slow going

Electric car parking space Credit: Adam Webb

Campaigners say the government needs to give buyers more incentives, the RAC has suggested waiving VAT on sales of zero-emission vehicles.

Sales will remain in the slow lane until electric cars become cheaper to buy and can go further on a single charge, but the direction of travel is clear.

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