Revealed: Are Electric Cars Cheaper to Run Than Traditional Fuel Cars?

At first glance, electric vehicles seem more expensive; they’re new and often come with higher price tags, but the running costs usually make them much cheaper than their fuel counterparts.

We all know when it comes to owning a car there is so much more than just the purchase price to consider.

In our electric vs. fuel car comparison, we look at how much you could save in the long run.

Like many, you may be surprised that all of these electric cars are cheaper than their fuel counterparts. 

That's not to say you can't find a cheaper fuel-powered car on the market. On average, EVs tend to be more expensive, but subject to what model you are looking for, you might be pleasantly surprised.

As EVs become more popular on the road, retail prices should continue to drop, but the biggest savings you get with electric cars are against the cost of fuel—let's look into it. 

Here are just some initial running cost savings you make by choosing electric:

• You don’t need to pay congestion charges
• You could save money on repairing and servicing your car - EVs have fewer moving parts and fewer items prone to wear and tear
• Company car users can enjoy a 2% BIK (Benefit in Kind) tax rate, significantly less than petrol or diesel equivalents

In the UK, the average car costs around £3,830 a year, and the most significant expense, outside purchase cost, is fuel. The yearly estimate for petrol or diesel is £1,400+, but, the scary thing is—excuse the pun—there is no cap on fuel prices. 

In the summer of 2022, petrol and diesel prices hit record highs and in the last 5 years, petrol prices have increased by 10.7%, with diesel prices increasing by 6.5%.

By switching to an electric car, you will not only reduce your CO₂ emissions but potentially save a significant amount of money each month on fuel costs. It's a clear win-win. 

To take this one step further, we compared how much it would cost to fill up with fuel if you completed 10,000 miles per annum with how much it would cost to do the same distance in an EV. This was based on the average tariff of home electricity rates (from 1st April 2024), as well as more affordable EV tariffs offered by many energy companies.

Look at our car comparisons below to see the running costs of electric cars vs. fuel-powered cars.

Which cars are we comparing? 

• Electric: MINI Cooper E Classic 

• Petrol: Volkswagen Polo GTI

Which cars are we comparing?

• Electric: Tesla Model 3
• Diesel: Audi A4 Sport 40 TDI quattro S tronic

Which SUV cars are we comparing? 

• Electric: BMW iX xDrive40 M Sport
• Diesel: Mercedes GLE 450 d 4MATIC AMG Line

Based on the above comparisons for electric vs fuel, the electric SUV offers the most significant running costs savings of almost £1,800 per year. SUV sales have increased by over a fifth in one year, exceeding 1 million in 2023. But, the growing popularity of driving fuel-powered SUVs is a risk because of the pressure it puts on the UK’s carbon budgets. 

Naturally, the bigger the car, the more air pollution it generates, so switching your SUV to electric could make a big difference to your wallet and the planet.

The cost of charging your electric car depends on whether you’re charging your car at home or at a public charging point.

Our research found that you could save anywhere between £1,000 to £1,535 per year by charging your car at home instead of using a public charging point - which, for a family of four, would cover over two month's worth of food shopping!

By charging your electric car at home, you control which EV tariff you use - which opens the (car) door to potentially huge savings.

Based on the electric cars we investigated, we calculated the cost of charging 10,000 miles at home comparing a standard to a cheaper tariff, and comparing that with the price of public charging points.

When switching to an EV, the key thing to consider, especially if you want to save money in the long run, is installing a charging point at home. 

Charging electric cars at home is the most cost-effective solution, but the initial set-up cost ranges from £500 to £1,000. However, there are ways to help lower this cost: 

• If you’re renting or living in a flat, a government grant provides up to 75% of the cost of having an EV charge point installed at your home (capped at £350)
• Many electricity providers provide EV tariff discounts such as credit if you switch to them, or benefits for charging your EV at night 
• Some car brands have been known to offer substantial discounts when you buy an EV
• You can purchase a charging point on Klarna which could help you split the upfront cost
• People who are eligible can now apply for a £350 government grant towards the cost of a cross-pavement charging solution in order to support EV drivers that don’t own a driveway.

If at-home charging isn’t an option for you, the annual cost of charging your car at a public charging point can vary significantly depending on whether you use a slow or rapid charger.

It costs less per kWh to charge your car at a slow public charger, making it a much more cost-efficient method when considering public charging. You could save as much as £775 for every 10,000 miles you travel by sticking to slower chargers and only saving the rapid chargers for emergencies. 

Public charging is more expensive than home charging, having said that, our research found you still have the potential to save between £188 to £273 a year by charging your EV at a slow public charger compared to a fuel-powered car.

Over 1,000,000 fully electric cars are on the road in the UK, which will continue to grow as car brands feel the government's pressure to promote EV sales. While the environmental benefits speak for themselves, the cost-saving opportunities of EVs are still a little unknown. 

When you compare the maintenance and upkeep costs of EVs, they can be lower than those of their fuel counterparts. 

The most significant saving you have by switching to an EV is escaping the uncontrollable spiral of rising fuel prices - you could potentially save approximately £1,800 per year. That could equate to around £150 a month. It's not a house deposit but it could certainly contribute to a nice holiday away in the sun!

Ready to go electric? Browse our EVs for sale to make an investment that’s built for the future and will sustainably save you money each year.