Buying an EV – Save Money?

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Electric vehicles have been in the news a lot recently, especially due to the Scottish Government’s target to phase out the sale of new petrol and diesel vehicles by 2032.

In June 2018 there were 8,869 EVs registered in Scotland. Although this still represents less than 1% of the vehicles on the road, this is double the number from two years earlier and update is increasing exponentially. Furthermore, the rate of increase in Scotland is double that in the rest of the UK. The most popular EVs at present are the Nissan Leaf, the BMW i3 and the Tesla Model S. The Renault Zoe is also popular.

Will I Save Money?

New EVs are generally more expensive to purchase than their petrol or diesel alternatives, which can be a barrier to entry. Many individuals purchase vehicles second-hand, which can make the purchase price more accessible. We provide more information about purchasing second-hand here.

For those buying new, the higher purchase cost can be outweighed by longer-term savings in the cost of financing, fuelling and tax. We use the VW Golf as an example in order to make a comparison because there are electric, petrol and diesel options in the same model range.

We compare the electric e-Golf against the mid-range VW Golf 1.4L Petrol (TSI SE 5-Door), which has similar performance capabilities.

At £29,230 (after the plug in grant has been applied) the initial purchase cost of the e-Gold is around 35% higher than its petrol equivalent.

However, savings in the cost of finance (through Transport Scotland funded Interest Free Loans), fuel costs and vehicle tax can counteract this difference within 3 years of use assuming 12,000 miles per annum. After that, the owner can start to save money.

It’s also worth noting that EVs won’t be subject to emissions charges – the Scottish Government has committed to introduce Low Emission Zones into Scotland’s four biggest cities by 2022 and to other areas by 2023.

Comparison of more expensive vehicles such as the Tesla S against cheaper petrol or diesel cars is unlikely to provide so fruitful given the £73,500 starting price.

So, electric vehicles should be cheaper to run in the longer term, however this depends on the exact model, annual mileage and the length of time the owner decides to keep the vehicle.

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