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Why running an EV makes financial sense

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The annual running cost of an electric vehicle is now £579 cheaper on average than a petrol-fuelled car., according to new research from comparethemarket.com.

What’s more, this difference in cost has increased from last year when EVs were just over £400 cheaper to run.

The research, which analyses the price of insurance, fuel, and road taxes, reveals that the average annual cost of running a petrol-fuelled car is now £1,843, whereas an electric vehicle costs £1,264 to drive for 12 months. 

While petrol cars are usually more expensive to run due to the annual road tax exemption for EVs, the cost of driving both types of car has risen year-on-year.

For EVs, the cost has increased by £137 year-on-year, primarily due to higher energy costs in recent months. 

The average annual energy bill for an EV has increased by £167 year-on-year to £519, based on driving 6,700 miles, the UK average.

Despite the average EV car insurance premium falling by £29 year-on-year, EVs are still typically more expensive to both buy and insure than similar petrol cars. EV owners also usually choose to install a home charging point which would add an additional cost.

In contrast, the average annual cost of running a petrol-fuelled car has risen by a much steeper £313 year-on-year to £1,843.

This sharp rise in running costs has mainly been driven by the increase in the price of petrol and higher car insurance premiums. 

The average annual fuel cost for a petrol car is now £943 – a £221 increase compared to the previous year. In contrast to EV insurance premiums falling marginally year-on-year, the average car insurance premium for petrol cars has risen by £82 year-on-year due to a rise in the value of second-hand cars and replacement part inflation. 

ANNUAL AVERAGE COST OF RUNNING AN ELECTRIC VEHICLE
Cost name2022 costs2021 costs
Insurance£690£719
Fuel£519£352
Est. VED (Road Tax)£0£0
MOT£55£55
Total cost per year£1,264£1,127

“Despite surging energy bills, motorists who’ve made the switch will be glad to see that electric vehicles cost substantially less to run than a petrol alternative,” said Alex Hasty of comparethemarket.com.

AVERAGE ANNUAL COST OF RUNNING A PETROL-FUELLED CAR
Cost name2022 costs2021 costs
Insurance£680£598
Fuel£943£722
Est. VED (Road Tax)£165£155
MOT£55£55
Total cost per year£1,843£1,530

About Gareth Herincx

Gareth is a versatile journalist, copywriter and digital editor who's worked across the media in newspapers, magazines, TV, teletext, radio and online. After long stints at the BBC, GMTV and ITV, he now specialises in motoring.

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