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Are electric cars really more expensive?

Put off by the price of an electric car? Don't write them off just yet - you could be saving money in the long run. We look at the cost of owning and running an EV in detail.

Last updated on 17 September 2020 | 0 min read

Many of the big questions around electric cars are on their cost: both to buy and to run.
They are, on average, more expensive to buy outright but the overall cost of ownership (when you factor in fuelling it, maintenance, tax, insurance and everything else) can be lower. So, for a higher initial outlay you could end up saving money in the long run. Want to see how real life prices compare? Rory Reid looks at how the latest EVs stack up against their petrol counterparts.

Upfront cost

If you’re buying outright, then electric vehicles are more expensive. The upfront cost can be quite a lot higher than petrol or diesel, but remember to include the cost of tax, insurance, servicing and fuel in your final budget.
Given the increasing demand and low supply, electric vehicles might stay more expensive for while – but they do come with a lot of perks. You don’t need to go all for the most expensive electric car though. Yes, Teslas are amazing. But cheaper electric cars like the Renault Zoe are good too – and a lot more affordable. Here’s our best electric cars 2020 for inspiration. Be realistic about your needs. The average electric car has a range (battery life) of around 250 miles. Many drivers aren’t going to be driving more than 200 miles a month on a regular basis, so you don’t need to spend more for a top-tier range. Learn more about electric vehicle’s range. How does the price of an electric car in the UK compare to the rest of the world? Find out with Compare the Market's Global EV Index, which compares the price of a Nissan Leaf in almost 50 countries.

Financing an electric car

Most new cars are bought through finance, like Personal Contract Purchase (PCP), and electric cars are no different.
You can find PCP deals on Auto Trader, and compare different fuel types, makes and models to find the right car for your monthly budget. Another option would be to lease. With car leasing, you make monthly payments for a fixed length of time and, once the lease has ended, you return the car. It’s hassle-free and monthly payments are normally low. If you're interested, you can learn more about leasing an electric car. Finance and leasing can be a great way to manage the cost of a brand-new car, but make sure you budget properly. Include extra costs like fuelling or charging, insurance and tax to get your final figure (total cost of ownership) over the duration of your contract. And speaking of the contract, always check the fine print for any exclusions or caveats – never assume something is included, as it could be an extra cost for you later down the line.
Orange Vauxhall Corsa E electric car charging in a white space
Vauxhall Corsa E

Cost to charge electric vehicle

In almost all instances, charging an electric or hybrid vehicle is cheaper than fuelling a traditional petrol or diesel model.
Where you charge your vehicle can impact on the final cost: with charging at home being the cheapest method and rapid chargers being the more expensive.
Cost of charging at home
The UK domestic electricity rate is about 14p per kWh, which means you’ll be able to charge the average 60kWh electric car from flat for less than a tenner.
You can keep the cost down by charging overnight and using the cheap night-time rates – some EV drivers have said they can drive for about 2p per mile by doing this. The final cost will depend on the car you’ve chosen, and your electricity provider. Some electricity providers provide special tariffs for electric car owners, so shop around for energy deals best suited to you. Learn more about charging your electric car at home.
Cost of charging at work
This depends on where you work. Some employers offer free access to their charging points, while others are introducing a paid tariff to encourage fair usage. Some opt for a plug-in hybrid, with which it’s free for a certain amount of time, then you pay (to encourage fair sharing).
Cost of charging in public
Again, this one can vary. There are at least 20 different companies installing and running electric car charger networks in the UK. Some public charging points or service stations are free, and prices can vary for the paid ones.
Most posts cost around £1.50 per hour to charge. How many hours it’ll take to charge will depend on the size of your battery and how flat it is, plus the speed of the charging point. Heads up: you’ll probably need your smartphone to pay, as most charging posts use an app now.
Cost of rapid charging points
Rapid charging points can be the most expensive of the lot and cost around £6.50 for a 30 minute / 100-mile charge. Rapid chargers are normally found at motorway service stations.

Cost of refuelling a hybrid

When it comes to hybrids, the total cost will depend on the type of hybrid you pick. You can learn more about car fuel types here.
Plug-in hybrids lean on their high capacity batteries, so you’ll cut your fuel bill down by a prioritising a much cheaper electric charge over a tank full of petrol every time. You’ll probably only be paying for the occasional top-up, unless you do a lot of motorway miles where plug-ins are less efficient. Hybrid electric vehicles (HEVs) are fuelled primarily with a tank of petrol, but the electric motor means you’ll get better fuel economy than a standard petrol equivalent. In either case, you’ll also produce fewer emissions, which will help keep your tax bill down. Even mild hybrids, which are basically petrol or diesel vehicles with a touch of EV tech, offer improved fuel economy and emissions. If you’re looking to cut down fuel costs and produce fewer emissions (but still not sure about full-electric) hybrids are the way to go.
Silver Lexus NX300h hybrid parked on a drive
Lexus NX300h hybrid

Example electric car budget

To work out the cost of fully charging an electric car from flat, use the following equation: size of the car’s battery (in kWh) x electricity price (in pence per kWh).
First up, the average UK price for electricity is around 14p per kWh. The size of the car’s battery can vary, but let’s use a standard Nissan Leaf as an example. It has a battery size of 40 kWh, powering a 150 hp electric motor. This means a Nissan Leaf will cost £5.60 (40 kWh x 14p/kWh) to fully charge. The Nissan Leaf has a range (the distance it can travel on a full charge) of 168 miles. If we divide the cost of fully charging the Nissan Leaf by the number of miles you can travel (cost of a full charge / car’s range) we can estimate that a Nissan Leaf costs 3.33 pence per mile. Compare this to petrol or diesel, for which you’ll pay an average of £1.24 or £1.30 respectively for a litre. Don’t forget, you realistically won’t be charging your car from flat every time so the actual monthly cost will probably be lower than this. Obviously, these numbers are only a guide so take a look at the battery size and range of EVs you have an eye on and do your own calculations. Where you live can impact on the amount you’ll normally pay for fuel and electricity. Similarly, the length of your journey and even the quality of your roads can all impact on the running costs of your vehicle.
Blue Hyundai Kona parked against a blue sky
Hyundai Kona

Electric car battery costs

How much does it cost to buy an electric car battery?
Electric car batteries can be expensive, to the tune of thousands of pounds. But most, if not all modern electric cars come with the battery included and you won’t pay extra for it.
Electric car batteries should last at least 10 years (with some lasting up to 20 years) and come with good guarantees – Renault, for example, guarantees its batteries for eight years or 160,000km. Most batteries are designed to maintain optimal performance over at least 1,000 full charge cycles, so it’s unlikely you’ll need to replace one for many years. Further to this, the price of electric car batteries is dropping as technology improves and production costs reduce. Learn more about electric car batteries. If you’ve looking at an older, used model, factor in the cost of replacing the battery or leasing a battery on top of the price of purchasing the car – just in case it’s needed. Check with the seller about how long there is left on the warranty and try asking them about their charging history too.
How much does it cost to lease an electric car battery?
Leasing a car battery can reduce the initial cost. You’ll have to agree the price, and any contractual stipulation, with the manufacturer or provider, but expect to pay between £50 and £100 a month for the battery.
The upsides of leasing the battery are that you don’t have to worry about replacing it if it’s faulty or near the end of its life. The downside is that it’s an extra monthly cost – so run through your budgets properly and check the contract before you commit.
Yellow VW E Up electric car parked in a gold-lit garage

Electric car servicing cost

Generally, electric motors are cheaper to service than petrol or diesel motors because they have fewer moving parts. You don’t have to worry about, or check on, oil changes or cambelts with an EV.
The average electric car service will check the electric motor, battery pack, cabling, suspension, steering, brakes, wheel, tyres and lights. You’ll also get a battery health check, which is done by plugging into the car’s computers and analysing the data. Repairs can cost more because the technology involved is more advanced, but that depends on what the issue is. Final quotes will vary based on where you take your car, the car’s age and what needs repairing.

Electric car insurance

Generally, electric vehicles are in the higher insurance groups and so cost more to insure.
This is because electric cars tend to include more advanced technology than traditional petrol or diesel models, making them more expensive to repair. That isn’t always the case though, so compare insurance quotes on individual models to find an accurate price. It’s also worth noting that insurance costs are becoming more competitive as electric and hybrid cars grow in popularity – so it’s becoming easier to find a bargain on electric car insurance.

Electric car tax

Another big saver: hybrids are generally cheaper to tax than petrol or diesel cars, and fully electric vehicles (which produce zero emissions) are exempt from paying tax altogether.
Further to this, changes to car tax made in April 2020 mean you’ll now be paying a lot more tax on petrol and diesel vehicles – incentivising car buyers to choose electric or hybrid. Learn more about car tax bands.
Kia e Niro electric car driving on a motorway in autumn
Kia e Niro

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More information
Head to our electric and hybrid hub for more guides, prices and information on new electric cars and hybrids.