Could an electric car save you money?

does an electric car save money

Sponsored content from Aviva

By Sarah Lewis

Electric vehicles have thrown off their unglamorous image and evolved into sophisticated, high-spec machines. But, there’s a problem – they’re expensive. Before you rule one out, here’s why buying and running an electric car might be cheaper than you think. 

Counting the cost

Let’s be honest, new electric cars are expensive to buy. Even one of the cheapest on the market, the Renault Zoe, costs from £15,000 to £17,500 after you’ve factored the government’s Plug In Car Grant, which gives £3,500 off the list price of zero-emission models. 

They can cost more to insure too. A 35-year-old woman in London can expect to pay around £387 to insure a 2017 electric Nissan Leaf, compared with £363 for an automatic Qashqai with a petrol engine1. 

“Electric cars can cost a little more to buy and insure,” explains Aviva’s Head of Underwriting, Steve Ashford. 

“This is because currently, the technology, including the price of an electric battery, make these vehicles expensive to repair compared to normal combustion engine cars. We expect this cost to fall in time.”

The good

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

For a start, they can be exceptionally cheap to run. Research by electric vehicle experts Go Ultra Low claims you can charge at vehicle at home for as little as £3.882. 

If you drive the UK average of 650 miles a month, you could save an impressive £793 on fuel over a year, according to Go Ultra Low3.

It’s cheapest to charge your car at home overnight but if you can’t you could use one of the UK’s 16,500 charge points on streets, in car parks, service stations, workplaces, hotels and restaurants. 

Some charge points are free to use but others, like those at motorway service stations, come at a price. To fully charge a BMW i3 at a service station, for example, you can expect to pay £5.94 – that’s 6.7p a mile4. 

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

Add to this discounts on car tax – drivers of most pure electric vehicles pay nothing – and, if you drive in London, you’ll be exempt from the congestion charge. 

The bad

If you have access to a charge point and think an electric vehicle might be for you, you should factor in potential depreciation.

Although cheap to run, some electric cars don’t seem to hold their value very well. A 2014 Nissan Leaf sells for between £7,500-£9,000, and a 2015 Renault Zoe can be found for less than £6,0005. Teslas, however, seem to hold on to their value much better.

You’ll also want to bear in mind the cost of replacing parts. Some electric batteries will only last for around a decade so, if your car is a long-term investment, you might have to replace one at some point. Some car retailers give you the option of leasing a battery. Again, this will cost you depending on how many miles you drive, averaging around £70 a month. 

Are they worth it?

Even with government grants and low fuel costs, electric cars are expensive to buy upfront. 

If you have space for a home charging point and use your car for short, frequent journeys – like your commute – the potential savings could outweigh the higher repair and insurance costs, making electric a good investment. 

And if you’re not quite ready to go green? “I expect we will see longer-lasting, cheaper batteries and electric cars with an improved range in the near future,” predicts Ashford.

Find out more about Aviva car insurance.

Sources:

1. Quotes from Aviva car insurance August 2018 https://www.aviva.co.uk/insurance/motor/car-insurance/ 

2. www.goultralow.com

3. Savings calculated using Go Ultra Low fuel calculator. We compared a Hyundai Kona electric with a Hyundai Kona petrol model for a person driving 650 miles a month.

4. https://www.zap-map.com/tools/public-charging-calculator/

5. https://www.autotrader.co.uk/car-search?advertising-location=at_cars&model=ZOE&make=RENAULT

Could an electric car save you money?

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