Is it worth buying an electric car? The costs to consider
Electric cars are becoming increasingly common on the roads, but do they offer value for money? We look at the costs versus savings and if it is worth buying one
There are clear environmental benefits of owning an electric vehicle (EV) over a petrol or diesel vehicle but prospective buyers may wonder if they are cheaper to buy and run.
The government is banning the sale of new petrol and diesel cars from 2030 and hybrid vehicles from 2035 in a carbon-cutting drive, while the number of EVs on the roads is on the rise.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
How much do electric cars cost?
When talking about EVs, people are generally referring to battery electric vehicles (BEVs), which are also known as electric vehicles (EVs), and plug-in hybrid electric vehicles (PHEVs).
One major drawback to EVs and PHEVs is that they are often more expensive than their petrol and diesel counterparts.
For example, a brand new Vauxhall Mokka with petrol engine costs £25,570 while the EV version costs £31,680, as of 7 April.
You don’t have to spend tens of thousands of pounds on a new EV though. Dacia’s more budget-friendly Expression Electric 45 EV costs just £15,645 when bought new.
The second-hand market continues to grow as well, with 275,000 used EV car sales in 2025, up 45% from 2024, according to the RAC.
Meanwhile, financing schemes are available for those who want to pay for an EV monthly rather than as one lump sum. These types of schemes are similar to those for petrol and diesel cars, with 0% APR offers available on the market.
How much does it cost to charge an electric vehicle?
It costs between £4 and £20 to fully charge an EV through a home charging point depending on the size of your car’s battery and which tariff you’re on, according to the RAC.
Charging at a public rapid charger is more expensive – costing over £60 to get to 80% charge.
Generally, charging an EV at home is much cheaper than fueling a petrol or diesel car, but the cost difference is nominal when using a public charging point, according to the RAC.
You can bring charging costs down further by opting for an EV energy tariff. Energy companies target these specifically at EV drivers, giving them discounted electricity unit rates for charging their vehicle during off-peak hours – usually overnight.
Jack Cousens, head of roads policy at AA, said: “For the vast majority of EV drivers, charging from home unlocks fantastic savings.
“Shopping for special EV tariffs from home energy suppliers means even bigger savings can be made when the vehicle is recharged overnight.
“On the road, some ultra-rapid charging companies provide off-peak rates where the price can be significantly cheaper than those offering a 24/7 flat rate.”
Technological innovations can help bring prices down further still, according to charging solutions companies like Pod Point. The company has a home charger which is designed to be integrated with domestic solar panels.
Once installed, over time, drivers can offset the upfront costs of their charger and solar panels and then effectively charge their EV for free rather than relying on the grid.
What is the cost of installing an electric vehicle charger?
The cost of installing a home charge point is around £800 to £1,200.
Depending on where you live, you might be able to secure a government grant to offset some of these costs. For example, renters, flat owners and homeowners can get up to £500 off the cost of a chargepoint installation until March 2027.
Do you have to pay road tax on electric cars?
You do have to pay road tax on an EV, but the amount depends on when you bought it. If you registered the car on or after 1 April 2025, you pay £10 for the first year then £200 annually from the second year.
EVs registered between 1 April 2017 and 31 March 2025 pay £200 each year while EVs bought between 1 March 2001 and 31 March 2017 pay £20 a year.
If the EV you own is worth more than £50,000 and was registered on or after 1 April 2025 you have to pay an expensive car supplement of £440 a year from your second tax payment onwards.
The London congestion charge has also been payable by EV drivers since 25 December 2025.
Furthermore, from April 2028, owners of EVs will also have to pay electric Vehicle Excise Duty of 3p per mile driven.
Are electric cars worth it?
HSBC has a calculator which lets you work out how much money you could save by switching from petrol to electric. The calculator is based on a number of variables: car size, annual mileage, electricity price and fuel price.
Analysis by MoneyWeek found that by switching to an EV you could make a saving of £950 a year, based on a small car, annual mileage of 10,000, the cost of electricity being 24p per kilowatt and unleaded costing 157p per litre.
The median yearly cost of insuring an EV is £511 compared to £397 for a petrol or diesel car – a £114 difference – according to the latest data from Go.Compare.
Meanwhile, the cost of a yearly MOT is around the same for EVs and petrol or diesel cars.
Factoring in all these costs, you would save £836 a year driving an EV compared to a petrol or diesel counterpart.
Driving an EV also shields you from sudden upswings in the price of petrol, which hit motorists in spring 2026 following the conflict in the Middle East.
Of course, it takes time for any ongoing savings to cancel out the upfront costs associated with buying an EV (i.e. the premium you pay for an electric vehicle versus a petrol one, plus the cost of purchasing and installing the charging point).
However, it is important to look at your individual circumstances before making a decision. For example, if you drive a lot, your savings on fuel will be more significant. You might also be happy to opt for a cheaper EV model rather than buying a premium brand like Tesla.
Similarly, if you live in London and are already looking to buy a new vehicle because your old one isn’t ULEZ-compliant, it might be worth thinking about going electric. The ULEZ (Ultra Low Emission Zone) charge is currently £12.50 per day.
Another important factor to consider is the 2035 deadline when the sale of new petrol, diesel and hybrid vehicles will be banned in the UK. In other words, the future is electric.
Once this deadline comes in, you will still be able to buy and sell combustion-engine vehicles second hand. However, it is likely they will fall in value considerably on the second-hand market as they become less desirable – meaning you could get less for your vehicle when you decide to sell.
