Are electric cars the answer to today’s higher than ever cost of motoring?

Spending to save?

The average purchase price of an electric car is £51,924, while for internal combustion engine (ICE) cars this figure is £26,752, meaning that buying an EV can be almost twice as expensive even before any other costs – insurance, MOT, servicing etc – are factored in. In addition the government has just announced it is withdrawing the £1,500 plug-in grant offered to buyers of new EVs.

Even when comparing models from the same manufacturer, the difference in the initial cost is stark. For example, a brand new Vauxhall Corsa with a petrol engine – the UK’s most popular car – starts at £17,340 whereas the Corsa-e starts at £27,0555.

This means that a new EV driver could need to drive more than 314,650 miles before they recoup the difference in purchase price with the savings they’d make from charging rather than filling their car.

While other running costs, like servicing, can be cheaper for EVs, Forbes Advisor also found that car insurance can cost more for electric cars. In one example, the cheapest annual comprehensive insurance policy for a brand new Vauxhall Corsa with a 1.2 petrol engine was £243.43, while for the electric equivalent, a Vauxhall Corsa-e, the cheapest price was £334.71 – a difference of £91.28.

For the same driver, the UK’s most popular EV – the Tesla Model 3 – would cost £579.63 to insure for a year, which is nearly two and a half times more than the petrol engine Corsa.

How to cut the cost of car ownership

Spending money will very rarely result in immediate or even near-term savings. But drivers who want to cut the cost of motoring can save hundreds of pounds with these easy – and free – steps from Forbes Advisor:

1. Sign up to fuel loyalty programmes – collecting points at the pump can give you money-off future refills. Just make sure that the potential saving warrants the cost of filling up at a particular station.
2. Switch your insurer – you can save up to £290 by switching to a new insurer. New rules that came into effect in January mean that your current insurer can’t charge you more at renewal than they would if you were a new customer, BUT that doesn’t mean that a different insurer won’t charge you less for the cover you need. So, shop around.
3. Car share – if possible, share lifts with friends or colleagues when travelling to work or for leisure. You can save on fuel by alternating days/weeks, plus you only need to find and pay for parking for one car.
4. Drive carefully – not only will driving smoothly reduce fuel consumption, it can also help you avoid motoring convictions, saving you money on fines and the subsequent car insurance hikes that go hand in hand with points on your licence.
5. Travel efficiently – make sure your tyres are pumped up properly and that you don’t have any unnecessary cargo or accessories. A lighter load and lower rolling resistance means you’ll need less fuel to go more miles. So the golf clubs and mountain bike rack can be taken off for your drive to work…

Laura Howard, motoring expert at Forbes Advisor, commented: “We’re deep in a cost of living crisis, and paying £100 to fill up the tank with petrol or diesel is beyond affordable for many families already struggling with energy bills and rampant inflation. Very few drivers will see the pump price indicator race towards three figures with anything other than dread and dismay.

Those fortunate enough to have the money for a new car might consider an EV on the basis of its relatively low running costs. But they should remember that the purchase price premium means they won’t earn back the higher cost for a long time. So anyone looking for immediate savings to ease the stress on their wallet should look for other ways to cut the cost of motoring, from shopping around for a better insurance deal to ditching the heavy roof-rack.”