Electric car running costs: tax, insurance and maintenance explained

Electric cars have exploded in popularity in the UK over the last few years thanks to low running costs and healthy government incentives. List prices remain high when compared to internal combustion cars, but generally an EV is cheaper to run in the long term than a petrol or diesel car. 

As energy prices have skyrocketed the gap between electric and internal combustion fuel costs has shrunk – but it’s still big enough to make a difference to most owners. 

Electric cars remain cheaper to run in other ways too. Road tax (VED) and routine servicing costs are much lower as a rule thanks to zero local emissions and relative mechanical simplicity. Insurance costs can be cheaper but not always.

Depreciation is a factor to consider as part of electric car ownership, especially as many models will lose value at a much faster rate than their petrol or diesel counterparts. This is most drastic if you buy a brand new electric car as a private buyer but retained values are improving as list prices come down.

Below, we examine the main aspects that make up the total cost of electric car ownership except charging, efficiency and fuelling costs versus petrol or diesel cars, which you can read more about in detail here.

Electric cars and vehicle tax

Fully electric cars are currently exempt from road tax (VED), while tax on all other vehicles (including hybrids and PHEVs) is based on CO2 emissions.

However, electric car drivers will start paying road tax from 1 April 2025 – albeit at the lowest first-year rate followed by the standard rate thereafter 

Rates from 1 April 2025 onwards have not been confirmed but currently the lowest first-year rate is £10 and the standard rate is £190. It’s clear that while EVs will lose their exemption, there will still be significant first-year savings.

As an example of typical savings in the current tax year, the electric BMW i4 currently costs nothing in road tax – but the cleanest BMW 4 Series Gran Coupe emits 153g/km, which equates to £680 in the first year followed by the standard rate of £190. 

How much do electric cars cost to service and maintain?

As with fuel, so it is with servicing: electric vehicles generally work out cheaper to service and maintain than the equivalent petrol and diesel models, largely because they have fewer moving parts and fewer items prone to wearing out over time.

Real savings come when replacing parts after the warranty runs out. Electric cars don’t need oil filters or spark plugs and have no cambelts or similar service items that can be fairly expensive to replace at each service interval on internal combustion cars.

Most regular electric car service plans focus on ensuring the battery, high-voltage systems and electric drivetrain work as intended. EVs usually have a cooling system with fluid that needs to be changed from time to time, while many also have a heat pump that will generally need yearly attention. 

Brake discs, pads and fluid will need to be replaced as required just as with a petrol or diesel, while the rest of the running gear generally remains conventional on most EVs. Suspension generally comes courtesy of shocks and springs or more complex air systems, both of which wear out over time as with an internal combustion car.

Despite all this, the lack of a comparatively complex internal combustion engine at the heart of things generally means fewer labour hours and much more generous service intervals – all of which combine to cut costs.

While unlikely to be an issue encountered by most owners, electric car batteries are famously expensive to replace if not covered under the manufacturer warranty. The same could be said of a faulty petrol or diesel engine beyond repair, however.

Can independent garages service electric cars?

A side effect of the rapid uptake of electric cars in the UK in recent years is that the supporting infrastructure has struggled to keep pace. That’s most obviously true in terms of charging – but less obvious to many is a relative lack of EV-qualified mechanics and technicians. As a result, you are more likely to have success booking your EV into a main dealer than your local garage, at least for now.

According to the Institute of the Motor Industry, as of 2022 there were 39,000 EV-qualified technicians in the UK. It seems likely that number will increase as more electric cars enter the UK’s used car stock. 

Are electric cars any more expensive to insure?

While servicing, fuel and tax costs are usually cheaper for electric cars than for conventional vehicles, electric vehicles are generally more expensive to insure. This is partly because repair costs can be higher, and EVs are generally quicker than a similar small-engined petrol car. 

Our research found that a Tesla Model 3 was around 87 per cent more expensive to insure than an petrol-powered Audi A4 2.0 TFSI, although less powerful EVs commanded much lower premiums over their traditional counterparts. You can see a range of our electric car insurance comparisons here.

Now take a look at the best electric cars to buy...

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