Electric vehicles (EVs) are becoming increasingly popular on UK roads. Since the government announced that the sale of all new petrol and diesel cars would be banned by 2030, consumers have been deciding whether to pick up an EV sooner than later.
In June 2023, Tesla Model Y was the best-selling car in the UK, the first time that an EV has outsold a petrol or diesel car in this country, with over 5,500 new Teslas registered.
While many are intrigued by an EV, there are still several logistical problems that prevent people from buying one, namely the ability to have a charging point installed by their house.
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Car manufacturers around the world are increasing the number of EV models they are producing. Toyota, Volkswagen, BMW and Nissan are among the most recognised brands churning out new vehicles each year.
The electric revolution is on its way, and if you have been considering getting an EV, particularly on finance, we are here to tell you why now is a great time to get ahead of the game and into an electric motor.
Electric car finance
Buying an electric car on finance works like any other car finance deal. You identify the vehicle you like and how much it would cost, and borrow money from a finance lender.
You will then make fixed monthly payments until the end of the agreement. Typically, you will put a deposit down, or you can part-exchange any existing vehicles to help fund your new EV.
Depending on the finance deal you opt for, you may own the car outright once you have made all of your monthly payments, or you may be required to pay an optional final balloon payment if you wish to own the car.
Alternatively, if you don't want to own the car, you could hand the car back and walk away without paying a penny more. Or use any equity in the vehicle to part-exchange and get into something new.
EV PCP finance
You could choose a Personal Contract Purchase (PCP) finance deal. With this type of deal, you would make your monthly payments, and at the end of the term, if you wanted to own the car, you would be required to pay the final balloon payment to acquire it.
EV HP finance
With Hire Purchase (HP), it's very much the same as PCP. However, at the end of your term, you will own the car outright without paying any more. HP deals are typically more expensive per month than PCP for this reason.
EV personal loan
If you wanted to own the car outright from the beginning, you could opt for a personal loan. With this, you would borrow the total amount for the car and pay it instantly. You would then make monthly repayments to your lender as you would with PCP or HP.
Pros of EVs
- Don't need to purchase fuel - Electric cars are powered by batteries, meaning there is no need to fill your tank with petrol or diesel.
- Zero emissions - As a result of the car being powered by electricity, it won't produce any emissions from the exhaust.
- Save money on maintenance - There are fewer parts than cars with an engine, so it should be more affordable to maintain.
Cons of EV
- Charging points - If you don't have a driveway or can't park your car near your house, it may be difficult to get a charging point installed.
- EVs can be more expensive than normal cars - Electric cars are less widely available at this moment in time, so will likely cost you more than a regular car.
- The time it takes to charge - You can fill up a car with petrol in a minute or two, but charging an EV can take much longer.
Is there any government support when buying an EV?
- Plug-in grants - Vehicles that have been approved by the government can get a grant of up to £2,500. If the vehicle can travel at least 70 miles without producing emissions, it is eligible. A dealer will automatically deduct this figure from the EV's total price.
- Charge point grants - If you need to install a charging point at your home, you could get up to 75% off the price of installation.
- Road tax savings - You're not required to pay road tax if your car produces zero emissions.
- No fuel duty - If your car does not require fuel to run, you won't be expected to pay any fuel duty.
- No issues in ULEZ - If driving in London or other major cities in the UK that operate Ultra Low Emission Zones (ULEZ), you will not have to pay to travel through these areas.
What other costs are there to consider when buying an EV?
While the cost of charging an electric vehicle may be cheaper than filling a regular car with petrol or diesel, your electricity bill will take a hit if doing it from home, or if you don't have a charging point, you may need to go somewhere that does.
Many charging points are free, but some cost per session, depending on where you charge your EV. You should research the best and cheapest places to charge your car before making your journey.
It may also cost you more to insure your EV because they have large batteries that can cost a considerable amount if your car is damaged and need to be replaced.