Petrol vs Electric Car Cost Calculator

What should I know about True Cost of Car Ownership?

Purchase price and fuel are only part of the story. Full cost includes: fuel, Vehicle Excise Duty (VED/road tax), insurance, servicing and maintenance, MOT and repairs, depreciation (the largest single cost for most cars), and parking/charging infrastructure. Depreciation alone accounts for 40–60% of total ownership cost for most cars in the first 3 years. A £30,000 car that is worth £18,000 after 3 years has depreciated £12,000 — more than many years' fuel costs combined.

What should I know about Electric Car Economics?

Electric cars have high purchase prices but very low running costs: fuel at home charging (7p/kWh off-peak) costs 2–3p per mile vs 15–20p for petrol. Servicing is simpler (no oil changes, fewer brake replacements due to regenerative braking). VED is £0 for zero-emission vehicles. The break-even point depends heavily on the price premium over equivalent petrol, annual mileage, and whether you can charge at home. For high-mileage drivers with home charging, EVs are clearly cheaper. For low-mileage drivers, or those without home charging access relying on public rapid chargers, the running-cost advantage narrows considerably and the payback period on the higher purchase price can stretch well beyond typical ownership length — run the numbers on your actual annual mileage and charging setup rather than assuming EVs are automatically cheaper.

What should I know about Depreciation by Fuel Type?

Depreciation rates vary significantly by fuel type and model. Petrol: mainstream models typically retain 40–50% of value after 3 years. Diesel: similar to petrol but uncertainty around future diesel restrictions has increased depreciation in urban areas. Electric: higher initial depreciation (40–50% in first 3 years) due to technology improvement reducing second-hand values, though this is improving. Hybrid: strong residuals (50–60% retained) due to high demand for fuel-efficient used cars. Always factor depreciation into a true cost-per-mile comparison alongside fuel and maintenance, since it's typically the single largest cost of car ownership over 3-5 years — a cheap-to-run car that loses value fast can end up costing more overall than a pricier one that holds its value.

What do I need to know about BIK and Company Cars?

For company car drivers, Benefit in Kind (BIK) tax is a significant consideration. Electric vehicles have very low BIK rates (2% of list price in 2026/27, rising 1% per year to 2027/28) — making them dramatically cheaper than petrol equivalents for higher-rate taxpayers. A £40,000 EV at 2% BIK vs an equivalent petrol at 32% BIK: the BIK difference alone is worth £2,800–4,800/year in tax for a 40% taxpayer. For company car users, the shift to EVs is financially compelling regardless of personal usage patterns or driving style, since the tax saving is baked into the BIK banding rather than dependent on mileage — this is the single strongest financial argument for choosing an EV as a company car, and the gap only widens as petrol BIK rates continue to rise in scheduled annual increments while EV rates stay low.