Can you buy an electric car with financing?

Rising gasoline and diesel prices could increase the appeal of electric cars, if you can afford to buy one.

Figures from online car buying and selling website Carwow show more drivers are thinking about switching to electrics, with rising gas prices a key reason.

And you’re also seeing a growing trend of ‘user’ over ‘owned’ with a 44% increase in lease inquiries over the last year.

The figures suggest that this change is being accelerated by the growing demand for electric vehicles (EVs). In the last 12 months, it has reported a 200% increase in EV leasing inquiries, with EVs now accounting for 38% of all Carwow inquiries, up from just 11% in 2018.

In terms of the individual models most in demand, EVs ranked high, with the Tesla 3 topping Carwow’s list in 2021 and the all-electric VW ID.3 in fourth place.

Hugo Griffiths, Features Editor at Carwow, says: “Petrol prices have been rising for some time, but recent weeks have seen some of the steepest increases in years. Our data suggests this has had a direct impact on interest in electric vehicles, as motorists seek to mitigate the impact that rising gas prices are having on their household budgets. Two out of three motorists tell us that cost is a key consideration for them when deciding whether to go electric.”

Anyone who buys a new car after 2030 will need to buy an electric or hybrid vehicle, as the government plans to ban the sale of new petrol and diesel vehicles by then.

According to the Society of Motor Manufacturers and Traders (SMMT), many drivers are already making the switch. Its March data shows purchases of battery electric vehicles rose 102% year-on-year. Sales of plug-in hybrid electric vehicles increased by 12% and those of hybrid electric vehicles by 52%.

In total, electric vehicles accounted for more than a third (34.1%) of all new car registrations in March.

Are electric cars more expensive than gasoline cars?

The initial cost of an electric car is much higher than that of a gasoline or diesel car. According to Auto Trader, electric vehicles are typically 37% more expensive than gasoline vehicles.

Erin Baker, Editorial Director of Auto Trader, says: “When you look at the demographic profile of people currently looking for electric cars on Auto Trader, you see that they are predominantly older, wealthier people who live in affluent parts of the country, a trend in likely with the ‘normal’ profile of early technology users who tend to be young and metropolitan”.

Own Auto Trader Road to 2030 The report shows that the number of electric models priced under £20,000 has dropped from 11 in 2020 to just three in 2021. It also shows limited choice within body types.

Baker adds: “Motors are feeling the pinch from all directions right now, and despite positive environmental intentions, the number of people citing environmental reasons for owning an electric vehicle increased from 48% in January 2020 to 56%. % in August 2021. Prices combined with a large initial entry price for an EV do not bode well for significant EV adoption.”

Are electric cars cheaper than gasoline cars?

Those drivers who can afford to switch to an electric vehicle will find their new wheels cheaper to keep on the road. According to a study by Compare the Market, electric cars are 47% cheaper than gasoline cars.

The price comparison site found that an electric car typically costs £1,091 a year to run, while keeping a petrol car on the road costs £2,062, a difference of £971. The research looked at the cost of insurance, fuel and vehicle emission rights (VED).

The study was done last summer – gas prices have risen a lot since then, so even bigger savings are likely to be realized once you have an electric car.

Do you pay VED on electric cars?

All electric cars are exempt from VED as they have zero CO2 emissions.

In gasoline and diesel cars, the more harmful the vehicle, the higher the applicable tax rate. But not all gasoline cars are subject to VED. Some gasoline cars manufactured and registered before April 1, 2017 that produce 100 g/km of CO2 or less are exempt from tax.

With an electric car, you also won’t have to pay to enter any low emission zones, such as the Ultra Low Emissions Zone (ULEZ) in London, and you also won’t have to pay London’s congestion charge.

Can I get a discount on an EV?

Yes, the government-funded Plug-in Car Grant (PiCG) offers a discount on the cost of buying an electric car. The scheme means that the government allocates a sum of money to the purchase of zero emission vehicles.

However, the government has been reducing the amount of the plug-in car subsidy discount. Previously, buyers could get £3,000 off vehicles; this was reduced to £2,500 in March 2021 and then reduced again to £1,500 in December.

The maximum price of vehicles that could be purchased with the grant was initially £50,000, but was lowered to £35,000 in March last year and then £32,000 in December. The good news is that there is a decent choice of electric cars that cost less than £32,000.

Can I buy an electric vehicle with financing?

Electric car buyers have several options to finance their purchase, just like buying a gasoline car. Options include personal contract purchase (PCP), installment purchase (HP), car leasing, or taking out an auto loan.

With a PCP plan, you pay a deposit, monthly payments for two to five years, then a ‘balloon payment’ at the end of the deal if you want to keep the car. If you don’t want to buy the car, you can return it and get another PCP in a new car.

Smart Home Charge has compiled a list of the 10 lowest priced electric cars with PCP financing. His best offer was for a Renault Zoe Iconic R110 EV 50 which requires a deposit of £6,763, then 36 monthly payments of £199. If you want to keep the car at the end of the three-year term, the balloon payment will be £13,668.

Other electric cars with monthly payments of less than £300 on PCP include a Nissan Leaf (£6,427 deposit then £219 per month for 36 months), a Fiat 500 Electric (£4,495 deposit then £249 per month for 36 months) and a Hyundai Kona Electric SE Connect (£8,700 deposit then £254 per month for 36 months).

What is the cheapest EV?

According to Parkers car price guide, the cheapest electric cars on sale in 2022 include the Smart EQ Fortwo (£20,350 to £24,425) and the larger Smart EQ Forfour (£20,785 to £25,565).

Other models on the list include the Fiat 500 Electric (£22,995 to £29,995), VW e-Up (£23,555), MG 5 EV (£27,495 to £29,995) and Mini Electric Hatch (£27,900 to £33,900).

If you buy a new gasoline car, it is likely to be much cheaper than the cheapest electric cars. For example, Auto Express says a new Dacia Sander will start at £10,145, a Kia Picanto from £11,450 and a Citroen C1 from £12,245.

How much does it cost to charge an EV?

Some drivers are reluctant to switch to an electric car due to lack of access to charging points. However, the government has now set a new target to increase the number of chargers tenfold to 300,000 by 2030.

The cost of charging an electric car in the UK varies between domestic and public charging. According to Pod-point.com, a typical electric car with a 60kWh battery and a range of around 200 miles would cost around £15.10 for a full charge at home. Fast charging at a motorway service station would cost about £6.50 for a 30-minute charge that would last about 90 miles.

Campaign group Which? has called for a review of the electric car charging network. It says that improving access to the public charging network is vital to accommodate the anticipated growth in electric car use. Those unable to charge from home must pay higher prices on the public grid, and all electric car drivers face challenges including multiple payment systems and unreliable charging points.

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