Are Electric Cars Cheaper to Run

The cost of running a car is one of the biggest concerns for drivers in the UK, and with rising fuel prices, more people are considering electric vehicles as an alternative to petrol or diesel. A common question is whether electric cars are genuinely cheaper to run once you take into account not just fuel savings but also insurance, servicing, tax and charging costs. The answer is not entirely straightforward, but for most drivers electric cars do provide noticeable financial advantages compared with traditional vehicles.

The Cost of Charging Compared with Fuel

The most obvious saving comes from fuel. Charging an electric car at home is usually far cheaper than filling up a petrol or diesel tank. On average, a full charge at home can cost between £10 and £15 depending on the size of the battery and the electricity tariff, whereas filling a conventional car often costs well over £70 at current pump prices. Even when using public rapid chargers, which are more expensive, the cost per mile still tends to be lower than running on petrol or diesel. For drivers who can use an off-peak electricity tariff or smart charging system, the savings can be even greater as energy can be drawn overnight when prices are lowest.

Road Tax and Other Incentives

Another area where electric cars have been cheaper to run is road tax, known officially as Vehicle Excise Duty. Until April 2025, electric cars are exempt, providing a direct saving of at least £180 a year compared with a petrol or diesel car. Some local councils also offer reduced or free parking permits for electric vehicles, and there are exemptions from charges such as the London Congestion Charge and Ultra Low Emission Zone fees. These savings may not last forever, as road tax changes are already planned, but for now they continue to provide financial benefits to electric car owners.

Servicing and Maintenance Costs

Electric vehicles have fewer moving parts than cars with internal combustion engines, which means there is less to go wrong. There is no need for oil changes, exhaust replacements or clutch repairs, and brake systems often last longer thanks to regenerative braking. While electric cars still require regular checks and maintenance for items such as tyres, suspension and safety systems, the overall servicing costs are generally lower. This makes electric cars attractive for those who want predictable and often reduced long-term maintenance bills.

Insurance Considerations

Insurance for electric cars can sometimes be more expensive, mainly because the vehicles are newer and the parts, particularly the battery, are costly to replace in the event of an accident. However, as the market expands and more insurers become familiar with electric vehicles, prices are becoming more competitive. The gap between petrol and electric insurance premiums has narrowed in recent years, and many drivers now find that the savings from fuel and servicing outweigh any additional insurance costs.

The Cost of Installing a Home Charger

One factor that needs to be considered is the initial cost of installing a home charging point. Although it is possible to charge an electric car from a standard three-pin plug, most drivers opt for a dedicated wall box to speed up charging times and improve efficiency. The cost of installation varies but is usually between £800 and £1,200. Government grants have previously reduced this cost, but funding is now more limited. However, once installed, a home charger adds convenience and can help maximise energy savings, particularly if linked to a smart tariff.

Long-Term Value and Resale

Another element of running costs is the resale value of the car. Electric cars generally hold their value well, especially as demand continues to rise and more drivers look for affordable used options. While battery degradation is a concern for some buyers, most modern electric vehicles come with lengthy battery warranties, often lasting eight years or more. This reassurance helps maintain strong resale values, meaning drivers may lose less money in depreciation compared with a petrol or diesel car.

Balancing Purchase Price Against Running Costs

It is important to remember that while electric cars are cheaper to run, the purchase price is often higher than an equivalent petrol or diesel model. This means the savings build up over time, rather than being immediate. Drivers who cover high mileage each year will usually see the benefits more quickly, as fuel savings are magnified the more the car is used. For lower mileage drivers, the cost advantage may take longer to show, but over several years electric cars still tend to work out cheaper overall.

The Future of Running Costs

As more electric cars enter the market and technology improves, running costs are likely to fall further. Battery efficiency is increasing, manufacturing is becoming cheaper, and energy suppliers are introducing more competitive tariffs specifically designed for electric vehicle charging. Even with upcoming changes to road tax, electric cars are expected to remain cheaper to run in most circumstances. With government commitments to reduce carbon emissions and encourage sustainable transport, financial support for electric vehicle drivers is also likely to continue in some form.

Conclusion

Overall, electric cars are cheaper to run for the majority of UK drivers, particularly when it comes to fuel, servicing and tax. Although the initial purchase price and insurance can be higher, the savings gained through lower day-to-day running costs, combined with the environmental benefits, make electric cars an increasingly attractive choice. For households and businesses planning their long-term transport needs, the financial advantages are clear and likely to grow in the years ahead.