Counting the cost of an electric car

We know electric cars are great for the environment, but there’s a problem… they’re expensive.

Sarah Lewis

Great for the environment and quiet to drive, electric cars are growing in popularity, but not by as much as you might think. Sales of electric vehicles made up just 9.9%  of new car sales in late 2019. 

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A study by Aviva  showed that while 57% of people would consider buying an electric vehicle, this was only if it was at a price they deem reasonable. 

In fact, when asked what would put them off buying electric, 64% of people were concerned about the high upfront cost.

Insurance and other costs

Consumers are right, new electric cars are expensive to buy. Even one of the cheapest on the market, the Renault Zoe, costs around £20,000 after you've factored the government's plug-in car grant, which offers up to £3,500 off the list price of eligible zero-emission models. 

If you're after something a bit fancier, a BMW i3s starts at approximately £33,480 and a Tesla Model S at £55,100, after the government grant.

Electric cars can cost a little more to insure too. A 37-year-old woman in London can expect to pay around £653 to insure a 2019 electric Nissan Leaf, compared with £540 for a manual Nissan Micra with a diesel engine. 

The positives

Despite the upfront cost, an electric car could still prove a worthy investment.

For a start, they're exceptionally cheap to run. According to electric charging map, Zap Map, you can fully charge a vehicle at home for less than £5 , depending on your energy tariff. 

You could save an impressive £793 a year on fuel if you drive the UK average of 650 miles a month and charge at home, according to Go Ultra Low .

If you don't have off-street parking, you'll need to charge your car elsewhere. 

The UK has more than 16,500 charge points on public streets and in car parks, service stations, workplaces, hotels and restaurants. It's now mandatory for motorway service stations to offer them and plans are afoot to turn some lampposts into charging points too. 

Some charge points are free to use but others, like those at motorway service stations, will have a fee. To fully charge a BMW i3 at a service station, for example, you can expect to pay £7.60 – that's 7.1p a mile .

Costs will vary depending on the provider but are unlikely to come close to the price of filling up with petrol or diesel fuel. 

Savings continue when it comes to car tax – drivers of pure electric cars pay nothing if the car costs less than £40,000. And, if you drive in London, you'll be exempt from the congestion charge too. 

The negatives

If your property is in a remote location or you regularly travel off the beaten track, an electric car may not be practical. 

The UK government has invested heavily in the charging network,so the situation is improving.

But even with improvements to the network, charging is slower than filling with petrol. Rapid charge points take around 20 minutes to fully charge a battery, making overnight home charging the cheapest and most convenient option. 

If you still think an electric vehicle might be for you, it's wise to factor in potential depreciation.

Although cheap to run, some electric cars don't seem to hold their value very well. A 2015 Nissan Leaf sells for between £8,495-£10,999 (around 60% decrease if you bought new). Renault Zoe's fair just as badly – a 2014 model can be found for less than £8,495 . Teslas, like other premium models, hold on to their value much better.

Finally, consider also the cost of replacing parts. Some electric batteries will only last for around 10 years. So, depending on how long you plan to own the car, you might have to replace the battery at some point. 

Transformative tech

If you're still on the fence, electric cars might be more affordable in coming years. 

 "We will see longer-lasting, cheaper batteries and electric cars with an improved range in the near future, " predicts Steve Ashford, Aviva's Head of Underwriting. 

 "Wireless car charging, for example, was launched by BMW last year and we can expect more innovation in this area. "

In addition, as electric cars become more widely used (Uber, for example, is planning to electrify its whole fleet), manufacturing will increase, the cost of parts will fall and electric will become more affordable. 

 "The cost of making and repairing these vehicles will fall, which will, in turn, reduce the cost of buying and insuring them, " explains Ashford.

Could an electric vehicle save you money? 

  • Do you have somewhere, like an off-street parking space or nearby charge point, where you can charge the car?
  • Do you use your car for frequent, short journeys (like a daily commute to work)?
  • Can you afford an upfront cost of at least £20,000?

If you answered mostly ‘yes', an electric vehicle might save you money.

See also:

Read our list of things to check when buying an electric or hybrid vehicle

Are electric vehicles as sustainable as you think?

There's more we can all do to help

From sustainable investments to eco-homes, see the little changes we can make to invest in our planet and build a greener future for us all.