Can an electric car really save you money?
At first glance, electric cars might seem like a more expensive option with their higher up front price tags. But when you dig into the numbers, you’ll see there are lots of ways you can save money with an EV.
The cheapest way to get your hands on an electric car is through a salary sacrifice scheme. Like cycle-to-work but faster, you get a brand-new EV as an employee benefit and pay for it from your pre-tax salary.
Our EV salary sacrifice scheme can save you up to 40% on the cost of an electric car. We cover everything you need to hit the road so you’ll get the charger, energy, insurance, tyres and more, with your car. Our personal lease options also give you everything you need, hassle-free.
But aside from cutting costs on the price of the car itself, how much money can you save with an electric car? What is it about electric cars that makes them cheaper than petrol or diesel cars?
How much would I save on fuel with an electric car?
With fuel prices on the rise, now’s a great time to think about an alternative that’s cheaper and better for the environment. In March 2023, the average cost of motor fuel was £1.47 per litre.
The cost of charging an electric car depends on where and how you’ll be plugging in. The cheapest way to charge is at home. Through government grants, you can save money on installing your EV charger or if you get your electric car through our salary sacrifice or personal lease package, we’ll give you a free charger and install it for you.
Once you’ve got your charger, the cost of powering up will be based on your energy tariff. For a standard electric car owner paying the average UK cost for energy, it’ll be around 11p per mile, or £22.78 per full charge, to power up an EV. In comparison, fuelling a traditional petrol or diesel car costs up to 19p per mile.
If you use our Intelligent Octopus Go tariff, you’ll get a great price on green energy at night, reducing the cost even more. Drivers on Intelligent Octopus Go can run their electric cars for an average of 2.5p per mile — nearly 90% cheaper per mile than a petrol car. We also give you the first 4,000 miles of charge for free, so you’ll be cruising on our dime for the first few months.
Charging your electric car at public stations still works out cheaper than running a traditional car and in some cases, it’s even free! You can find free EV charge points around the country, like the ones at Tesco supermarkets. Just park your car, do your shopping and get free miles in your car battery. What’s not to love?
How much tax would I save with an EV?
Straight off the bat, you’ll save on annual road tax with an electric car as there’s no charge for most EVs until 2025. Road tax is calculated based on the emissions of the car, so depending on the model you choose, you could end up with anything from an extra £10 to £2,000+ in your pocket each year.
Leasing your electric car through a salary sacrifice scheme can also save you some cash on your tax bill. Employees have to pay Benefit in Kind (BiK) tax on all company benefits including company cars. Right now, the BiK rate for electric cars is only 2%, while petrol and diesel car drivers pay up to 37% (based on their car’s emissions).
For an average petrol car, you’ll pay about £1,200 in BiK over the year. But for a similar electric car, you’ll only pay about £80/year, saving you a whopping £1,000+.
Can I save on maintenance when switching to an EV?
So far we’ve talked about saving money on tax and fuel, but do you save money on maintenance with an electric car too?
The short answer is yes.
Electric cars have fewer complicated bits inside their engines than traditional vehicles, so they need much less attention over the course of their lives. For example, there’s no oil involved, so you don’t need to worry about any expensive, oil-related problems. There are fewer parts in the engine (including some of the ones that are priciest to replace), so there’s less chance of them rubbing together and wearing down.
Getting on the road in an EV with us can save you even more on maintenance, as everything is included. We cover servicing, general maintenance, repairs, replacement tyres and more, plus you’ll get AA Breakdown assistance. Not only is it cheaper, it’s also easier: all you need to do is choose your car and you’re ready to go.
Is it worth switching to an electric car to save money?
We’ve looked at saving cash on your tax, running and maintenance costs when it comes to an electric car. But is it cheaper overall? How much money can you save with an electric car?
According to Direct Line, electric car drivers pay about half as much annually as petrol cars on tax, maintenance and fuel. As another bonus, if you live in London and own an EV you don’t have to pay the Congestion Charge. You’ll still need to register your car with TfL, to make sure you’re exempt from any charges.
While you may pay a bit extra when you buy an electric car outright, you’ll make it back over time with all the savings. Browse all our EVs to see which cars could save you cash while you save the planet.