Let’s talk about TCO, or rather, the total cost of ownership. It’s perhaps one of the best kept secrets of electric car ownership that the savings really stack up when you look at all of the costs involved.
I’ve experienced it myself, especially in terms of running costs. I worked out that across two years of having my own electric car, and doing most of my charging off-peak at home overnight, I saved £1,600 because I wasn’t having to fill up with diesel. That’s enough to cover at least three staycations for me and the children.
And it’s not just my own experience that supports the fact that electric cars, despite the often higher upfront cost, can be better value than their petrol or diesel counterparts. This is backed up by the latest edition of the ‘Electric Car Cost Index’. The analysis, done in partnership with consultant battery electrochemist Dr Euan McTurk of Plug Life Consulting, examined the purchase (outright ownership), financing (lease and PCP) and running costs (fuel/charging, maintenance, insurance, tax) for 13 popular electric car models and their petrol or diesel equivalents, to demonstrate the true cost of being an electric car driver for people considering making the switch.
Key findings are that drivers who buy an electric car outright will save on average £3,862 over a seven year ownership period, while seven of the 13 cars analysed provide savings over a four year lease. The cost to “fuel” an electric car for 8,000 miles a year is 61% cheaper, with petrol and diesel drivers paying £732 a year more on fuel to do the same distance. Furthermore, lower maintenance and insurance costs also drive down annual running costs for electric car owners, which are on average 47% cheaper than petrol and diesel cars.
The Nissan LEAF, MG5 Long Range Excite and the Mini Electric Level 1 are three of the best value electric cars for drivers considering going green. These cars work out cheaper whether bought outright, leased or via PCP. All 13 cars are cheaper than the equivalent petrol or diesel model based on buying the car upfront and keeping it for seven years, while seven of the 13 are cheaper across a four-year lease term and four are cheaper on a three-year PCP agreement.
The savings on electric cars are heavily driven by lower average annual running costs - £1,147.21 compared with £2,201.58 for a petrol or diesel car.
So, despite the upfront sticker price of an electric car being higher than the equivalent petrol or diesel car, it pays to look at all the costs involved. Even with escalating fuel and energy costs, if people can afford to make the switch to an electric car, either new or second hand, then charging up with energy at home rather than filling up at a petrol station is far cheaper – and better for the environment and our local air quality.
Article written by Gill Nowell, Head of EV at LV= General Insurance.
All outright purchase, lease and PCP costs are correct as of February 2022. Purchase price of vehicles includes VAT. All running costs are averaged across a seven-year period (the assumed length of ownership) and are correct as of March 2022.