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How much money could you save with an electric car?

If you’re wondering whether electric cars are worth it, it helps to have all the facts in front of you before making a decision.

Below we look at electric car benefits, and how much money you can save with an electric car, so you’ll be better informed when deciding if making the switch is right for you.  

How much money could you save with an electric car?

‘Going electric’ meant something a little different in the sixties.

While the ever-developing vehicle industry may be akin to a rolling stone, gathering no moss, these days it’s the switch to electric vehicles that is at the centre of much cultural and social debate.  

Electric vehicles (EVs) are no longer a new phenomenon.

With around one million electric car drivers and fleets on the roads in the UK, people across the country are turning to EVs rather than petrol or diesel cars.

But as they become increasingly popular and present, the question remains: how much money could you actually save with an electric car?  

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The current electric vehicle market in the UK 

There’s no denying the rising popularity of EVs in the UK. Far from a fad, the trajectory of the EV market in recent years indicates that more and more people are buying into the idea of going electric.

According to Statista, new EV sales more than doubled between 2020 and 2021, despite the widespread challenges brought on by the Covid-19 pandemic.  

This increased demand has been met with more widespread production of EVs.

Globally, there is far greater choice between makes and models of EVs even compared to pre-pandemic production, with some of the world’s most well-known manufacturers expanding their range to include EVs as part of their catalogue.  

How much does an electric car cost? 

Since they hit the market, EVs have had higher barriers to entry than petrol or diesel cars.

But with such a significant increase in the production of various makes and models in recent years, it’s never been more affordable to make the switch from petrol or diesel to electric.  

Arguably, the fundamental appeal of EVs is that the upfront cost is made up over the long term due to the lower running costs.

This is why even when choice was limited, consumers began migrating towards electric cars. Now though, there is a huge range of options, from affordable to high-end.  

A recent Electric Car Cost Index from LV=General Insurance found that entry-level cars from manufacturers like Fiat and Volkswagen are available for around £26,000, while more expensive models from the likes of Tesla and Hyundai were upwards of £40,000.  

What are the financial options when switching to an electric car? 

There are plenty of alternative options to simply buying an electric car outright.

If you’ve got it in mind that an EV is a good option due to the long-term savings you might enjoy, then you can research the range of financing options available.  

  • Leasing – While leasing, or personal contract hire (PCH), means you don’t get to keep your car at the end of the contract, you’re getting the day-to-day benefits of an EV’s low-cost running. However, there are often leasing limitations that you should research, such as a limit on annual mileage  

  • Salary sacrifice – More companies are now offering a salary sacrifice scheme for employees. It offers similar tax benefits to pensions or cycle-to-work schemes and is an affordable way to pay monthly for an EV — often with the added bonus of insurance, maintenance deals and breakdown assistance all in the same place 

  • Hire purchase/personal contract purchase – Both of these options allow drivers to pay a combination of deposits and instalments over a certain period, after which they will own the car outright. This model can fit around your finances, since the length of the contract will depend on the size of the initial deposit, so you can make it work for you   

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Electric v petrol and diesel  

One of the primary benefits that EVs have over petrol and diesel cars is that they are more affordable to run over the long term.

So, if you are thinking of your next car purchase as a long-term investment, it could make financial sense for you to consider switching to an EV.  

Charging up an EV is a cheaper option compared to refuelling a petrol or diesel car, meaning the benefits can be as clear cut as cost-per-mile.

The recent fluctuations in petrol prices due to macroeconomic issues like the Russia-Ukraine conflict have laid bare the volatility of the oil market, and those that don’t drive EVs are at its mercy.  

But it’s also true that EVs are cheaper to maintain. With fewer moving parts compared to that of a vehicle with a combustion engine, there is less chance of high-cost repairs on electric cars.  

And with an increasing number of spots across the UK implementing clean air zones, older petrol and diesel cars are subject to high fees due to the emissions they produce — while EVs remain exempt.  

What are the benefits of an electric car? 

The numerous financial and environmental benefits of electric cars mean they’re set to continue growing in popularity as they become more financially accessible to drivers.

Their low emissions mean they are far better for the environment than petrol and diesel cars.

Plus, the lower costs to run an EV — from charging to maintenance — mean that buyers can recuperate some of the money they have spent on the vehicle over the long term, compared to non-electric cars.   

And with demand for EVs remaining high, their resale value is another benefit; depreciating in value less than petrol and diesel cars means you can get more of your money back if you’re looking to sell up.  

Is buying an electric car worth it? 

It’s not totally plain sailing with EVs. Yes, they’re getting more affordable, and yes, they are cheaper to run over the long term than petrol or diesel cars.

But there are some factors to consider before making the switch. For one thing, the UK government has recently announced that as of April 2025, owners of electric cars will no longer be exempt from paying road tax.

Removing one of the financial incentives from the purchase of EVs in the UK may well reduce their appeal for drivers in years to come — so this is something to consider if you’re on the fence.   

Buyers should also consider how they use their car. Distance is a big factor in EV usage. If you’re going to be travelling long distances regularly, remember that the range of EVs can vary massively.

This is something that has improved in recent years, with some electric cars now able to go hundreds of miles without recharging.

That said, if you’re sold on EVs, buying the right model is key. Some will work for you as a short-distance runabout, since their ranges are shorter, while more expensive models will prove better if you’re going to be hitting the motorway regularly.  

Ultimately, there is such a huge range of electric cars out there that you can choose one that best suits your lifestyle.

There’s no doubt that the appeal of long-term savings remains with EVs — just make sure you shop around before landing on the right one for you.  

Like all big financial decisions, buying a new car can be challenging.

Let us match you with your perfect financial adviser, so you can make the most of expert financial guidance on the things that matter.  

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About the author
Kate has written for leading publications and blue chip companies over the last 20 years.