It found that over a seven-year period of owning a car, electric vehicles such as the Nissan Leaf, Volkswagen ID and the MG ZS EV are more cost effective than internal combustion engine equivalents. This is due to lower annual running costs, according to the LV= ‘Electric Car Cost Index’.
The ‘Electric Car Cost Index’ explores purchase price, tax, insurance, fuel and maintenance costs for nine electric cars vs their petrol/diesel equivalent to establish the total cost of ownership.
According to the Index, savings driven by average annual running costs were around 49 percent or £1,306 cheaper than petrol and diesel cars.
Seven out of nine electric cars evaluated offer better value over a four-year lease, including the Kia e-Niro, the Nissan Leaf and the Volkswagen e-UP.
The largest saving over a four-year lease is the Nissan Leaf compared to the Ford Focus ecoboost, which sees over £7,000 in savings.
Despite its popularity, the Tesla Model 3 would actually be more expensive to run over four years in comparison to the BMW 320i, with losses of £741.
Alex Borgnis, Head of Motor Underwriting at LV= General Insurance, commented: “With this new Electric Car Cost Index we’re really trying to show, in the most comprehensive way, how the costs breakdown for people considering taking the plunge and making an electric model their next car.
“While the initial purchase will seem intimidating for some, once you break down the monthly costs, especially on a lease or PCP, and then throw in the lower running costs each year, suddenly it becomes something that provides great value over the course of the ownership period.
“You really don’t need to remortgage to get yourself on the electric car ladder.”
The savings on electric cars are heavily driven by lower average annual running costs – £1,304 compared to £2,610 for a petrol or diesel car.
This means that electric car drivers save an average of £109 a month, with savings extending further as they require less maintenance and have a longer life span.
For cars compared over a seven-year ownership, drivers could save more than £13,000 with an MG ZS EV rather than a Seat Ateca.
However, big losses can also be made on electric cars with a £8,105 loss when comparing the Renault Zoe GT Line and the Renault Clio.
“The good news is that the cost of new electric cars is coming down and should reach parity with petrol and diesel cars by the mid-2020s.
“Also, such is the reliability of an electric vehicle’s components, including the battery, it is entirely feasible to buy an electric car, van, taxi, bus etc and run it for hundreds of thousands of miles, much longer than you’d run a petrol or diesel car.”
According to the study, fuel offers the biggest saving, with electric car drivers saving over £900 a year, based on an annual mileage of 12,000.
This is especially true for larger saloon cars, with average savings of around £1,300, and 4×4 cars with an annual fuel difference between electric and petrol being more than £1,200.
Electric vehicle owners also currently benefit from not having to pay car tax, with savings of over £1,000 over a seven-year ownership.