Petrol vs Electric cars: Which is Cheaper to Run?

Petrol vs Electric cars: Which is Cheaper to Run?

For a lot of people, the decision to go electric is purely financial; with seemingly ever-rising fuel and VED costs, the green option seems to also be the cost-effective one. But if you delve deeper, depending on how you use your car, it might not be as cheap to run as you might think.

In this article, we’ll run through all the associated expenses and explain some of the key factors that determine if you should make the switch to electric.

Is it better to get a petrol or an electric car?

This depends on your use case and parking situation. If you regularly drive very long distances in one journey, or don’t have space for a charger at home, petrol (or diesel) is still probably the best fuel for you.

If, however, you can charge at home and have a moderate length commute, an EV could well offer lower running costs – but we’ll discuss each element in detail.

What affects the cost of running a car?

Car running costs can be broken down into the following categories:

-        Road Tax (VED)

-        Insurance

-        Fuel cost

-        Maintenance and servicing

Road Tax (VED)

VED is a charge to use the roads in the UK. Although the charge is broadly based on the car's emissions, recent changes to this mean even EVs pay road tax.

From the second registered year, it doesn't matter if your car is powered by electric or internal combustion, as the tax will be £195 regardless. Your car's emissions will, however, affect the first-year tax rate, which can balloon to over £4,000 with highly polluting cars.

Insurance

It is a legal requirement to have a minimum of third-party car insurance in the UK. Insurance premiums are affected by a number of things, such as a driver’s previous driving record (accidents, penalty points, etc), but also the value and type of car.

Cars that are more likely to be stolen, are more expensive to repair, or are simply more expensive to replace, cost more to insure.

Fuel Cost

Fuel is one of the biggest yearly costs of running a car. Whilst petrol and diesel are roughly on par with each other, an electric car can be considerably cheaper to run, assuming you can charge it at home and on a suitable energy tariff.

Maintenance and servicing

Petrol cars have many service items, most requiring yearly maintenance. These include oil changes, filter changes and more. Electric vehicles avoid the majority of these as they only require one or two moving parts to function.

Furthermore, whilst electric vehicles do use roughly the same braking and suspension systems, they do not use consumables such as brake pads and discs at anywhere near the same rate as petrol cars, as much of the braking is done by the electric motor.

Which is cheaper to buy, electric or petrol?

EVs are around 30-40% more expensive than an equivalent petrol or diesel car. This is mainly due to the batteries being so expensive, but also through slightly less efficient manufacturing processes, when compared to petrol and diesel cars.

Both of these factors should decrease in their effect in the coming years, though, with new battery tech meaning fewer rare materials are needed, and new factories producing motors and battery packs coming online.

How much does it cost to charge an electric car?

It depends on when and where you charge your EV, and the size of your car's battery, but anywhere from £6 to over £40.

The biggest factor in charging cost is location; superchargers in places like motorway services or high street charging spaces can cost upwards of £50 to charge, depending on what car you have, the time of day and the brand of charger.

At home prices can be much more reasonable, especially if you have a favourable energy tariff, where the prices drop in off-peak times. Charging at home can cost as little as £10.

How much does a home EV charger cost?

As we’ve just discussed, home chargers are essential to getting the best rates when charging your car. Installing one can range from £500 for the most basic low-power charger, and in excess of £10,000 if you want a high-speed 22kW one.

Are there any grant schemes for home charging?

Currently, there are a number of EV charger grant schemes available; they are primarily focused on those living in flats, or for business use, but it’s definitely worth checking out what you could get if you’re thinking of getting an EV, or a charger installed.

Check what EV charger grants you are eligible for here.

Is electric or petrol cheaper to insure?

At the moment, electric cars tend to cost more to insure than an equivalent petrol model, anywhere from 10-50% in many cases. This is mainly down to higher repair costs.

Repairing an EV can be considerably more expensive than a petrol car, due to both the higher cost of replacement parts and the higher cost of the specialised labour needed to work on anything near the high-voltage components, such as the battery.

Are electric or petrol cars cheaper to tax?

If buying new or nearly new, there is not much difference in the VED cost between an EV and a petrol/diesel car. This is because the changes applied in April 2025 mean EVs pay the same yearly rate as a low-emitting internal combustion engine car, £195.

One thing an EV might save you, though, is the first year rates, which are applied based on the vehicle's emissions, and can be many times the standard yearly rate for performance cars - up to £5,490. The first-year rate for all EVs is £10.

Do EVs pay luxury car tax?

Since April 2025, EVs are no longer exempt from the luxury car tax, an additional rate that is applied to cars with a list price of over £40,000.

This rate is paid for the first 5 years of registration, and is an extra £425 per year.

Whilst there are many electric vehicles that fall under the £40,000 list price, lots of the most popular ones are very close to it, meaning you might have to settle for a relatively low spec model to avoid an extra £2,000+ pounds in tax over the first 5 years of ownership.

Cost per mile of an electric car vs petrol

Cost per mile is a great way to compare the running costs as it can be quickly applied to your personal mileage amounts. These are some example running costs from popular EV and petrol cars:

Electric car cost per mile:

-        Hyundai IONIQ -  £0.06 if charged at home - £0.18 if charged using public chargers

-        Tesla Model 3 Performance - £0.08 if charged at home - £0.19 if charged using public chargers

-        Ford Mustang Mach-e - £0.07 if charged at home - £0.18 if charged using public chargers

Petrol car cost per mile:

-        Ford Puma 1.0 petrol - £0.13 to £0.16 per mile

-        BMW 3 Series - £0.10 - £0.28 depending on engine type

-        Volvo XC90 - £0.20 - £0.27 per mile

Final thoughts: Should I buy an electric car?

Hopefully, the information above can give some insight into the costs of electric vehicle ownership. Like anything relating to personal finance, whether having an EV makes sense or not will depend on your circumstances, most importantly, if you have somewhere to charge it.

Not having affordable at-home or at-work charging takes almost all of the benefits of EV ownership away for almost all people, especially considering the road tax charge added this year.