Are electric cars really cheaper to own than their fuel equivalents?

Are electric cars really cheaper to own than their fuel equivalents?

Although electric cars may be more expensive to buy right now, they’re cheaper to own and run than their fuel equivalents. Don’t just take our word for it though, we’ve got some pretty impressive stats to prove it.

We worked with Dr. Euan McTurk of Plug Life Consulting to look into the finer details of owning and running an electric car. Throughout this blog, we’ll take a look at what he found and what it means for the future of car ownership. Although Dr Euan was the brains behind the numbers, we’re pretty hot on electric cars too…

LV= General Insurance launched the UK’s first car insurance product developed solely for electric cars back in 2019, and is now one of the largest electric car insurance providers in the UK. It makes sense really… green is our colour after all!

So, LV= General Insurance partnering with Dr Euan McTurk was the perfect hybrid (excuse the pun), and here’s what we found…

Are electric cars cheaper to buy?

Look, there’s no denying that electric cars are more expensive to buy on average than their fuel equivalents right now. For example, the electric VW e-up! 2021 purchase price starts at £23,555, while the fuel VW up! 2021 can be purchased from just £13,660. However, it’s not quite that simple because if you compare the two cars over a longer period of time, that’s when you begin to see the difference. The LV= Electric Car Cost Index found that:

  • Over 7 years of full ownership, you’d save £771 by having the electric model
  • During a 4-year lease, you’d save £3712 by having the electric model

These savings are predominantly due to the lower running costs, longer life span and minimal maintenance of an electric car.

If you’re looking to buy an electric car and you’re put off by the price, you could also benefit from government grants and schemes which are in place to make electric cars more affordable. Not only that, but your running costs will be significantly lower with an electric car compared to a fuel equivalent. Let’s take a look…

Are electric vehicles cheaper to maintain?

Electric cars have less parts than their fuel equivalents, so your risk of breaking down or gradual wear and tear over time lessens, which of course means you’ll spend less on servicing and maintenance. In fact, on average, maintenance costs can be more than £272 cheaper per year for an electric car. The LV= Electric Car Cost Index found that:

  • A fuel vehicle costs an average of £657 a year to maintain
  • An electric car costs an average of £384 a year to maintain

Plus, when the majority of fuel vehicles have driven over 80,000 miles or approach their seventh birthday, a lot of their parts begin to falter. For example, the timing belt, spark plugs and the exhaust gas regulator can cost hundreds of pounds each to repair or replace… but you won’t find them in an electric car, so that’s an instant saving.

And the savings don’t end there…

Are electric vehicles cheaper to run?

The biggest saving when you own an electric vehicle compared to owning a fuel vehicle is of course fuel. With an electric car, you’ll save an average of £900+ each year based on an annual mileage of 12,000. This saving considers the cost of charging an electric car (both at home and in public), compared to the cost of filling a tank with petrol or diesel. The LV= Electric Car Cost Index found that:

  • Home charging costs an average of £405 a year (90% of estimated charging)
  • Public charging costs an average of £105 a year (10% of estimated charging)
  • Petrol and diesel cars cost an average of £1,435 a year (filling up at a UK petrol station)

Want to know more about charging? We’ve got a couple of handy guides here:

According to the LV= Electric Car Cost Index, another reason electric cars are cheaper to own overall than their petrol or diesel equivalents, is because of their average annual running costs. The Index found that:

  • An electric car costs an average of £1,304 a year to run
  • A fuel vehicle costs an average of £2,610 a year to run

That’s an average saving of £109 a month for electric car drivers. Think of all the car fresheners you could buy with that?! Plus, electric cars usually last longer and need less maintenance, so the amount you save would grow and grow over time.

Are electric cars cheaper to tax and insure?

Electric cars are exempt from paying car tax… yes, you heard that right! One less tax – who wouldn’t want to benefit from that? Not having to pay car tax would save you an average of £1,000 over a seven-year ownership. Not only that, but since benefit-in-kind for electric company cars is taxed at just 1% right now, there are even more ways for people able to purchase or finance a company car through their employer, and save even more.

When it comes to insurance, there are a whole load of factors affecting price. For example, the car itself, your driving history, your address and even your occupation. So, in order to assess whether electric cars are cheaper to insure than their fuel equivalents, we’ve taken an average based on our own data.

We found that depending on personal circumstances, on average, electric cars could work out cheaper to insure than their fuel equivalents, predominantly due to their lower risk of breakdowns, repairs and replacement parts.

So, if you haven’t gone green already… what are you waiting for?

All figures in this blog are correct as of April 2021. You can read the full report here.


About the author

Amy Davidson is a Lead Copywriter at LV= General Insurance. Amy’s role includes writing digital copy such as editorial pieces and product content for the website as well as copy for the insures social media channels.

 

Amy Davidson

Written by

Amy Davidson

August 18, 2021