Will Your Bank Account Benefit from You Buying an Electric Car?

Thinking of buying an electric car? Great choice. Electric cars are environmentally friendly, provide an improved driving experience, and have lower running costs. It’s fair to say that they are the future of our mobility.

But how much does it actually cost to buy and run an EV, and how does that compare to petrol and diesel fuelled cars?

Here is a breakdown of the most common electric car expenses and how to minimise them.

Buying price

It’s a well-known fact that the purchase price for an electric vehicle is quite high. However, that initial investment turns out to be cheaper in the long run. But how much does an electric car cost?

The price will vary depending on several factors: model, make, specifics of the vehicle, as well as whether it’s a new, used, or financed car.

The average cheapest price for a new electric car in the UK is £17,350 and for the most expensive one it’s £138,826. Petrol and diesel cars are significantly cheaper. The average price for a small new car is £14,500 and for an SUV it’s £25,500. In terms of used electric cars, you’re looking at £16,684 for the lowest average cost and £63,870 for highest. Nevertheless, the prices for used petrol cars have soared in the last 17 months, raising the average price to £15,288.

The good news is that EV’s are predicted to become more affordable as new models penetrate the market from 2021, according to ABI Research’s 2021 Trend Report. While up until recently the options were pretty much limited to Renault Zoe, Nissan Leaf, and Tesla Model 3, new more cost-effective models have become available. These include models such as Vauxhall Corsa-e, Fiat 500, and Renault Twizy.

As more European countries transition to green mobility in efforts to combat climate change, governments are implementing new policies that target EVs. The UK, for example, has announced a two-step phase-out of petrol and diesel cars by 2030. This will urge more people to switch to electric cars. According to Statista, there were 175,000 sales of plug-in electric vehicles in the United Kingdom in 2020 (Figure 1), and 104,634 new registrations of battery electric vehicles (Figure 2).

If a new car is not within your budget range, there are many used electric cars available, such as the Mazda MX-30 which you can find at the used Ford Bolton dealership. Moreover, the UK government is offering an electric car grant which pays 35% of the purchase price of a new model, up to £2,500. This is part of the government’s attempts to encourage people to switch to EVs by 2030.

Charging costs

Electricity is cheaper than petrol or diesel, which means that you’re winning on the charging cost when it comes to EVs. The cost depends on the battery size, the manufacturer, and the location of charge points.

An electric car’s battery capacity is measured in kilowatt hours (kWh), and it’s made from lithium ion. According to Electric Vehicle Database, the average battery capacity is 61.3 kWh. The biggest one belongs to Tesla Cybertruck Tri Motor which has a capacity of 200 kWh. On the other hand, the smallest capacity is attributed to Smart EQ forfour at only 16.7 kWh.

There are three ways to charge an electric car: at home, at the workplace, or at a public charging point.

Electric car charging at home

Home charging is the most convenient and cheapest of all. You can either use a domestic 3 pin socket or a dedicated home EV charger. The latter typically delivers about 7kW of power and will cost you about £800, and a 3 pin socket delivers about 2.3kW. This power will affect the time it takes to charge your EV.

So how much would it cost you to charge your electric car at home? For example, if the battery capacity is 54kwH, the electricity tariff is 17p/kWh, then it will cost you about £9.20 for a full charge. Use the following formula to calculate how much it will cost you to charge your car at home: Tariff (e.g. 17p/kWh) * Battery size (e.g. 54kWh) / 100 = Cost to fully charge (e.g. £9.20).

Electric car charging at work

Most workplaces offer free charging, others offer a time-based tariff. Alternatively, you might receive some other type of deal as an employee incentive.

Electric car charging at public points

Public charging points are available at most motorways, service stations, supermarkets, and car parks. The cost between these can vary. Some places offer free charging while places like Lidl charge about 26p/kWh. If we take the example of a car that has a battery capacity of 54kWh, the calculations will be as follows: Tariff (26p/kWh) * Battery size (e54kWh) / 100 = Cost to fully charge (£14.04).

The electric cars charge point network is well-developed. According to Statista (Figure 3), there were 27,222 publicly available slow electric vehicle chargers (EVSE), and 6,248 fast EVSE chargers in 2020 in the UK.

Petrol or diesel fuel costs

On the contrary, to fuel a car with petrol or diesel, you’re looking at paying much more, especially with the increasing fuel prices. The current petrol price in the UK is £1.45 per litre. This means that if a car has a 50L tank capacity, the price to fill a full tank is: Fuel price (£1.45 per litre) * Fuel tank capacity (50L) = Cost to fully fill (£75.50).

Insurance and Tax

The cost of your electric car insurance depends on the model of your car, your driving history, years of experience, and the type of cover you wish to take out.

Traditionally, electric car insurance has been quite costly, but it’s also seeing a decrease due to the rising demands for EVs in the UK.

Based on recent data collected by MoneySuperMarket, the average cost to insure an electric car is £612.95. This is about £5 cheaper than that of a diesel car and slightly more expensive than a petrol car insurance which averages at about £574.50.

Tax-wise, electric cars require a £0 vehicle tax, while the vehicle tax of a petrol car is about £155.

Maintenance

Electric car engines consist of very few moving parts compared to their fossil-fuelled counterparts. This means that they are cheaper to maintain than petrol or diesel cars.

Nevertheless, EVs still need to be serviced regularly, and that could cost you around £5,000. Luckily, most electric car manufacturers offer an eight-year warranty or a warranty for the first 100,000 miles.

For a standard petrol or diesel car, the car service costs average at about £270 a year, but that can vary depending on the required repairs.

Electric cars present you with an initial costly investment which turns out to be more sustainable and cost-effective in the long run. So, the answer is yes, your bank account will definitely benefit from you buying an electric car, alongside the environment!