The cost of running an internal combustion engine (ICE) car has rocketed over the last decade, leading many drivers to look to electric cars as an economical alternative.

Fuel prices alone have more than doubled, according to the BEIS Weekly Road Fuel Prices report:

  • Unleaded cost about 75p per litre in 2003, 135p in 2013 and 160p in March 2022
  • Diesel cost about 77p per litre in 2003, 140p in 2013 and 170p in March 2022

With stricter MOT rules, especially for diesel cars, maintenance is becoming more expensive too, and even a small increase in exhaust emissions can lead to an immediate failure.

As the automotive industry moves towards electric vehicles, drivers are learning how economical the top electric car models can be.

So, what is the average cost of an electric car in the modern market, and what costs should you consider when calculating your budget?

Costs of an electric car

Electric cars are generally considered to be economical to run, especially compared with petrol and diesel vehicles, but how do the benefits stack up across the various different running costs?

When calculating the cost of an electric car, there are a few expenses to take into consideration:

  • Purchase vs leasing costs
  • Cost of electric to recharge
  • Maintenance and repairs

There are also the usual expenses associated with owning or driving a leased motor vehicle, such as car insurance, vehicle excise duty (better known to most drivers as road tax), and any costs associated with getting the vehicle through its MOT.

Like brand new ICE vehicles, an electric car does not need an MOT until the third anniversary of its date of registration — so if you only lease cars that are less than three years old, you shouldn't need to put it through the test at all.

Cost of road tax for electric cars

In many cases, electric vehicles are exempt from paying any road tax at all. To qualify for this exemption, the vehicle must be powered by an internal battery and not connected to a power source while moving.

The vehicle must still be 'taxed' even if it is exempt , but the cost of doing so will be zero. The rules are different for hybrid electric vehicles that draw some of their power from a petrol or diesel engine, so remember this when choosing between a hybrid or pure electric car.

Cost benefits of leasing electric cars

Leasing electric cars can be an economical way to drive one of the top electric car models without facing the upfront costs of buying and registering the vehicle in your own name.

Some of the costs you will need to cover include:

  • Initial lease payment (usually equivalent to three months)
  • Monthly lease payment (allowing for depreciation)
  • Optional maintenance plans (servicing and tyres etc.)

There are several significant benefits of leasing electric cars, which include:

  • Leasing providers use industry partnerships to get the best price on the vehicle
  • Monthly lease payment typically includes road tax
  • VAT-registered businesses can reclaim VAT (50% on finance, 100% on maintenance)

A typical lease lasts 2-4 years, so in many cases, you can return the vehicle before it reaches its third 'birthday' and becomes due for its first mandatory MOT.

Cost to maintain an electric car

Even if your vehicle needs an MOT, there are several significant benefits to maintaining an electric car compared with an equivalent ICE vehicle.

The most obvious of these is exhaust emissions. Electric vehicles are very low to zero-carbon at the point of use (although there may be a carbon footprint associated with charging the battery). So in many cases, it's not even necessary to test for emissions as part of the MOT.

With fewer moving parts in the engine, there's also less to go wrong. An electric car MOT test can consist of relatively simple checks on the battery, brakes, electrical systems (lights, windscreen wipers etc.), and the condition of the tyres.

If you lease your electric car, even if it's old enough to need an MOT, it's unlikely that the test will find any major problems, as your leasing provider will make sure the vehicle is in good condition at the start of your lease.

Cost to charge an electric car

The cost to charge an electric car varies based on several different factors. These can include incentives, discounts and membership schemes, but some of the main characteristics that determine the cost of a full charge are:

  • The size of your electric vehicle's battery (measured in kWh or 'kilowatt hours')
  • Where you charge it (at home, public car park, motorway service station etc.)
  • The type of charge point you use ('lamppost', fast, rapid)

Some manufacturers, such as Tesla, offer a certain amount of free charging at their charging points. It may be worth checking if any of the top electric cars come with free or discounted charging at a convenient location near you.

Cost to charge an electric car at home

Charging an electric car at home can be cheaper than expected, if you find an electricity tariff with lower off-peak prices.

Because you're most likely to charge an electric car overnight, the unit price of your electricity can be much lower in recognition of the lower demand in your local area at night.

Vehicles with a larger capacity battery will take longer to reach full charge on a standard domestic electricity supply — so if you plan to charge at home regularly, look for a tariff from your energy supplier that offers the longest off-peak period overnight.

What to take away

It's impossible to put a fixed price on the cost of running an electric car, as there are lots of variables:

  • The make, model, age and capacity of the vehicle
  • Where and when you recharge the battery
  • Third-party costs like your energy tariff and car insurance
  • Incentives, free charging and tax relief (including VAT)
  • Unplanned maintenance (although this should be rare)

Across the board though, the cost benefits of leasing electric cars really start to add up, with road tax exemptions, MOT exemptions for new vehicles, and the confidence that comes from having a fixed monthly fee for the lifetime of your lease.

If spiralling petrol prices and ever-tighter MOT rules have made your ICE fleet unsustainable, speak to an electric car leasing provider today to find out how much you could save by making the switch.