The Cost of Electric Car Ownership in the UK in 2025

The Cost of Electric Car Ownership in the UK in 2025 2025

The Cost of Electric Car Ownership in the UK in 2025

The transition to electric vehicles (EVs) in the UK is rapidly gaining momentum, driven by environmental concerns, advancements in technology, and evolving government policies. As the 2025 landscape unfolds, a crucial consideration for potential and current EV owners is the comprehensive cost of ownership. Understanding the intricacies of purchase prices, charging expenses, insurance, maintenance, and the impact of taxes and incentives is paramount for making informed decisions in this evolving automotive sector. This in-depth article delves into each of these key cost components, providing a detailed analysis based on the latest available data, while also highlighting the potential for significant savings through communities like preferential.club.
The UK automotive market is undergoing a significant transformation as the shift towards electric mobility accelerates. Battery electric vehicle (BEV) registrations are projected to increase significantly in 2025, pushing their market share upwards. This growth is supported by government targets and a broader push towards electrification. For consumers navigating this changing landscape, a thorough understanding of the financial implications of EV ownership is essential. This report will dissect the various cost factors associated with owning an electric car in the UK in 2025, offering a structured analysis from the initial purchase to ongoing expenses. Furthermore, it will explore how joining preferential.club, a community focused on providing savings and benefits to its members, can potentially alleviate some of these costs, particularly in areas like insurance.

The Price of Entry: Initial Purchase Costs

The initial investment required to purchase an electric car is a significant factor for many prospective buyers. In the UK market of 2025, the average cost of a new electric car sits around £46,000, but this figure encompasses a wide spectrum of models, ranging from more affordable options to high-end luxury vehicles.

Average Prices of New Electric Cars

The landscape of new electric cars in the UK in 2025 presents a diverse range of options across different price points and vehicle segments.

Compact/Affordable

For those seeking budget-friendly electric mobility, the compact segment offers several compelling choices. Models like the Dacia Spring are priced starting from under £15,000, making it the most affordable EV on the market. A range of well-equipped compact EVs are available comfortably below £30,000, offering impressive range and features as standard. Other notable models in this category include the Citroen e-C3, with a starting price of around £21,990, the Renault 5 E-Tech, priced from approximately £23,000, and the Fiat Grande Panda, expected to start at around £22,000. Even with starting prices under £30,000, these vehicles offer practical electric transport suitable for commuting and city life.

SUV

The electric SUV market in the UK in 2025 also presents a variety of options catering to different needs and budgets. Models like the Kia EV3 start at around £31,000, offering a compact SUV with a competitive range. The Volvo EX30, with a starting price of £32,850, provides a premium feel in a compact SUV format. Other contenders include the BYD Dolphin, with prices starting from £26,195, and the MG4 EV, beginning at approximately £26,000, both offering a blend of space and electric efficiency. While some electric SUVs can reach higher price points, these examples demonstrate the availability of more accessible options in this popular segment.

Luxury

At the higher end of the spectrum, the luxury electric car market in the UK in 2025 features premium vehicles with advanced technology and performance. Models like the Mercedes-Benz EQS 450+ come with a starting price of over £112,000, offering exceptional range and luxury. Other high-end EVs, including those from Tesla, Porsche, Audi, Jaguar, and Mercedes, often have an average price of around £69,000. While these vehicles represent a significant investment, they cater to buyers seeking top-tier electric driving experiences.
Notably, there are several electric vehicles available in the UK in 2025 priced under £35,000, making zero-emission driving accessible to a broader range of consumers.

Exploring the Used Electric Car Market

For individuals seeking a more affordable entry into electric car ownership, the used market presents an increasingly viable option in 2025. The availability of used EVs is on the rise, contributing to greater accessibility. Used electric cars can be found starting from much lower prices compared to new models, with some options available for under £5,000.
The average price range for a used electric car in the UK varies depending on factors such as age, mileage, and model, but generally starts from around £7,000. Models like the Nissan Leaf can be found on the used market with prices starting from under £2,000 for older models, while more recent examples are available from around £7,000. The Renault Zoe is another popular used EV, with prices starting from as low as £2,500. Other models such as the BMW i3, Hyundai Kona Electric, and Tesla Model 3 are also increasingly available in the used market with varying price points.
Several factors influence the prices of used EVs, with battery health and mileage being particularly significant. The condition of the battery directly impacts the car's range and performance, thus affecting its value. Lower mileage vehicles generally command higher prices in the used market. The trend in the UK shows an increase in used EV sales, indicating growing consumer confidence and acceptance of second-hand electric vehicles. This expanding market provides more opportunities for buyers to find affordable electric cars that meet their needs. While the initial cost of a new EV can be substantial, the used market offers a pathway to electric mobility for a wider range of budgets, especially with potentially stabilizing values in this sector. The variety of new models also ensures options across different price points, particularly in the compact segment.

Powering Your Drive: Charging Costs in Detail

Beyond the initial purchase, the cost of charging an electric car is a crucial aspect of ownership. This involves both the infrastructure for home charging and the expenses associated with using public charging networks.

Home EV Charger Installation

For many EV owners, installing a home charger offers the most convenient and often the most economical way to power their vehicles. The costs associated with home EV charger installation in the UK in 2025 depend on several factors, including the type of charger and the complexity of the installation.
A standard 7kW home EV charger installation typically costs around £1,110 on average, although this can be reduced if the homeowner qualifies for available government grants. The hardware cost for a quality smart 7kW charger ranges from £500 to £800, with standard installation adding another £300 to £700. More powerful chargers, such as 11kW and 22kW units, generally have higher hardware and installation costs, potentially ranging from £1,100 to £2,200 or more, especially if electrical upgrades are required.
Several factors can affect the overall installation cost. Smart chargers, which offer features like scheduled charging and remote control, typically cost £100 to £300 more than basic models. Premium brands with advanced features also command higher prices. The complexity of the installation, including the distance of the cable run from the consumer unit, any necessary groundworks, the type of wall the charger is being mounted on, and whether electrical system upgrades are needed, can all add to the cost. For homes requiring electrical upgrades, such as a consumer unit replacement or an upgrade to a three-phase power supply (necessary for 11kW or 22kW chargers), costs can significantly increase, potentially ranging from a few hundred to several thousand pounds.
It's worth noting that salary sacrifice schemes can make home charging setups more affordable by bundling the charger into the offering. Additionally, government grants are available until March 2026 for renters and flat owners towards the cost of purchasing and installing a home charger, potentially providing up to £350 off the total cost. While installing a home charger represents an initial investment, it provides long-term convenience and can lead to significant savings on charging costs compared to relying solely on the public network.

Home Electricity Tariffs and Charging Expenses

The cost of charging an electric car at home is heavily influenced by the household's electricity tariff. In the UK in 2025, many energy providers offer EV-specific tariffs that provide lower electricity rates during off-peak hours, typically overnight. These tariffs can significantly reduce the cost of charging an EV compared to standard tariffs.
Examples of popular EV tariffs include Intelligent Octopus Go and Octopus Go, which can offer off-peak charging rates as low as 7p/kWh. Other providers like British Gas, Scottish Power, and E.ON also offer EV tariffs with varying peak and off-peak costs. The average cost of on-peak home EV charging is around 27.43p/kWh, while off-peak rates average about 8.35p/kWh.
The cost to charge an EV at home can be calculated by multiplying the car's battery capacity (in kWh) by the electricity rate. For instance, charging a Renault 5 with a 52kWh battery from 20% to 80% using a 7kW home charger at an off-peak rate of 8.35p/kWh would cost approximately £2.61. A full charge at the same off-peak rate would cost around £4.34. Even with the increase in the energy price cap to 27.06p per kWh from April 2025, home charging on an EV-specific tariff remains significantly cheaper than public charging and fueling a petrol or diesel car.
It's important to note that electricity prices can vary slightly by region in the UK. However, the overall principle of utilizing off-peak EV tariffs to minimize charging costs remains consistent across the country. By strategically charging during cheaper off-peak hours, EV owners can significantly reduce their running costs.

Public Charging Network

While home charging is often the primary method for EV owners, the public charging network plays a vital role in providing charging options on the go, especially for longer journeys. The UK has a growing public charging infrastructure with various networks operating across the country.
Public chargers are typically categorized by their charging speed: slow (up to 7kW), fast (7-22kW), rapid (50kW), and ultra-rapid (150kW+). The cost of using public chargers varies depending on the type of charger, the network provider, the time of day, and the location.
As of April 2025, the average weighted PAYG (pay-as-you-go) price to charge an electric car on the public network was 52p/kWh for slow/fast chargers and 76p/kWh for rapid/ultra-rapid chargers. This translates to approximately 15 pence per mile for slow/fast charging and 23 pence per mile for rapid/ultra-rapid charging, assuming an average efficiency EV.
Individual charging networks have their own pricing structures. For example, GRIDSERVE charges 79p/kWh for DC charging via their app, while contactless payment can range from 79p/kWh to 85p/kWh. Tesla Superchargers can cost around 34.9p/kWh for members during off-peak hours, rising to 43.5p/kWh during peak times. Other networks like GeniePoint and Shell Recharge can have prices around 88p/kWh and 89p/kWh, respectively. Some networks, such as Sainsbury's Smart Charge and Believ, may offer slightly lower rates.
Many EV drivers opt for memberships with specific charging networks, which can often provide discounted per-kWh rates. While public charging offers convenience, it is generally more expensive than charging at home, especially when utilizing off-peak electricity tariffs.

Comparing Home vs. Public Charging Economics

A direct comparison of the economics of home versus public charging clearly demonstrates the cost advantages of charging an electric car at home whenever possible. Based on an average off-peak home electricity rate of around 8.35p/kWh and an average public rapid charging cost of 76p/kWh , the cost per mile can differ significantly.
Charging a Nissan Leaf with a 40kWh battery at home on an off-peak tariff could cost as little as £2.80 for a full charge, equating to around 1.9p per mile based on a real-world range of 150 miles. In contrast, charging the same vehicle using a public rapid charger at 76p/kWh would cost approximately £30.40 for a full charge, translating to about 20.3p per mile.
This significant difference highlights the substantial savings potential of home charging, particularly when combined with EV-specific tariffs offering lower overnight rates. While public charging provides essential flexibility for longer journeys and when away from home, its higher cost makes home charging the more economical option for regular use. EV owners who can charge at home and take advantage of off-peak tariffs can achieve considerable savings on their fueling expenses compared to those relying solely on public chargers or driving petrol/diesel vehicles.

Insuring the Electric Future: Understanding Insurance Costs

The cost of insuring an electric car is another important factor to consider when evaluating the overall cost of ownership. In the UK in 2025, the average cost of EV car insurance for popular models is around £654 per year, but premiums can vary widely.

Average Electric Car Insurance Premiums

The average annual premium for comprehensive insurance on popular electric cars in the UK can range from around £400 to over £1,000 for a sample driver in their mid-30s with a good driving record. Some of the cheapest electric cars to insure include the Dacia Spring, Mini Cooper Electric, Volkswagen ID.3, and Nissan Leaf, with typical quotes starting from just over £400 per year for a driver with a good record. In contrast, more expensive EVs like the Tesla Model 3 can have starting premiums around £900 a year.
Specific models and their average insurance costs provide further insight. The Fiat 500 Electric La Prima has an impressively low average annual premium of around £518. The Nissan Leaf Tekna averages around £522 per year, while the Mini Cooper S Level 2 costs approximately £528 annually to insure. Different trims of the same model can also have varying insurance costs. Generally, there appears to be a correlation between the car's value and its insurance cost, with higher-value vehicles often commanding higher premiums. However, factors beyond just vehicle value also play a role in determining insurance costs.

Key Factors Influencing Insurance Costs

Several reasons contribute to why electric cars can sometimes be more expensive to insure than their petrol or diesel counterparts. One significant factor is the higher repair costs associated with EVs. Electric vehicles have specialized components like electric motors and batteries, which can be more expensive to repair or replace than parts in traditional cars. The battery, which can represent a significant portion of the car's value, is particularly costly to replace.
The technology in EVs is newer, and there may be a limited number of mechanics trained to work on them, potentially leading to longer repair times and higher labor costs. Electric cars also tend to have a higher retail price than comparable petrol or diesel vehicles, and insurance rates are partially based on the car's value. The performance capabilities of some EVs, such as rapid acceleration, can also be a factor that insurers consider when assessing risk. Additionally, insurance policies for EVs may need to cover the battery and charging cables, which adds to the overall cost. The lack of extensive historical claims data for EVs compared to traditional cars has also been a factor in higher premiums, although this is expected to change as more data becomes available.
Of course, standard factors like the driver's age, driving history, and location also significantly influence car insurance costs, regardless of whether the vehicle is electric or internal combustion engine.

Electric Car Insurance vs. Petrol/Diesel Car Insurance

Recent data indicates that, on average, insurance for electric cars in the UK tends to be more expensive than for comparable petrol or diesel vehicles. One study found that claims for EVs are approximately 25.5% costlier than their internal combustion engine counterparts. However, the cost difference can vary depending on the specific models being compared. For example, insuring a Vauxhall Corsa Electric was found to be 14% more expensive than insuring a petrol-powered Corsa in one study.
Despite the general trend of higher EV insurance premiums, there are exceptions, and the gap may be narrowing for certain models. Some reports suggest that the average cost of electric car insurance has decreased in recent years. Additionally, some of the more affordable EVs have relatively low insurance premiums, comparable to or even lower than some petrol cars. As the EV market matures, repair costs potentially decrease, and more data becomes available to insurers, it is anticipated that the cost of insuring electric cars may become more competitive with traditional vehicles.

The Preferential Advantage: Saving on Car Insurance through Preferential.club

For individuals looking to mitigate the costs associated with electric car ownership, particularly insurance, joining a community like preferential.club can offer significant benefits. Preferential Club is a membership-based organization that provides its members with access to exclusive rates and rewards on various types of insurance, including car insurance.
By joining preferential.club, EV owners can potentially benefit from insurance discounts on their motor policies. The club has established collaboration agreements with leading UK insurance groups to create tailored coverage options for its members. One of the key advantages of membership is the opportunity to earn cashback on car insurance premiums for maintaining a claim-free record, with some exclusive bundles offering up to two months of cashback.
Preferential Club also offers exclusive insurance bundles that combine car insurance with other products, such as health and life insurance, often providing premium benefits and additional cashback rewards. For EV owners specifically, the "EV Owner Advantage Pack" offers specialized coverage for electric vehicles, including potential cashback, public charging credit, battery coverage, and EV breakdown assistance.
Members can easily access and manage their insurance options and benefits through the Preferential Club mobile app. The app allows members to get quotes on the go, explore member-only bundles, and access a smart insurance assistant to find the best deals. By leveraging the collective buying power of its members, preferential.club aims to provide more competitive insurance rates and valuable perks, helping to offset some of the costs associated with owning an electric car.

Maintaining Your EV: Service and Upkeep Expenses

The ongoing maintenance and upkeep of an electric car represent another key component of the total cost of ownership. Fortunately, electric vehicles generally require less maintenance than traditional internal combustion engine (ICE) cars due to their simpler mechanical structure with fewer moving parts.

Average Maintenance Costs for Electric Vehicles

The average annual maintenance cost for an electric car in the UK in 2025 is estimated to be between £100 and £250, with the average being just over £140. This is generally cheaper than the average cost for a full service on a petrol or diesel car. Because EVs have fewer moving parts, they typically incur approximately half the servicing, repair, and maintenance expenses of petrol vehicles, potentially saving drivers between £600 to £1,200 annually. On average, servicing an electric car can cost around £165, while a petrol car requires around £205, representing a 24% higher servicing cost for petrol vehicles.
Specific maintenance tasks for EVs include regular checks of the battery health, brake system, tyres, and fluids like coolant and brake fluid. While EVs utilize regenerative braking, which reduces wear on brake pads and discs, these components still need periodic inspection. Some EV models may require specific coolant changes for the battery, which can add to the maintenance cost at certain intervals. However, overall, the reduced complexity of the electric powertrain leads to lower routine maintenance needs compared to ICE vehicles, which require regular oil changes, air filter replacements, and other engine-related servicing.

Comparison of Maintenance Costs: EVs vs. ICE Vehicles

A direct comparison of maintenance costs between electric and petrol/diesel cars consistently shows that EVs are cheaper to service and maintain. Studies indicate that electric cars are about 30% cheaper to service over the first five years of ownership compared to traditional fossil fuel cars. The average annual servicing costs from year 1 to year 3 of ownership are approximately 28-29% cheaper for electric cars. Over a five-year period, the total average servicing cost for an EV is around £4,022, compared to £5,709 for a petrol/diesel/hybrid car.
Direct comparisons between similar models from the same manufacturer further illustrate this cost difference. For example, the Vauxhall Corsa Electric is about 31-32% cheaper to maintain on average over the first five years of ownership compared to its petrol counterpart. Similarly, the electric version of the Mini Countryman has been found to be around 22% cheaper to maintain over five years. While there can be some exceptions, the general consensus is that the simpler design of electric vehicles leads to lower upkeep costs.

Tyre Wear and Replacement in Electric Cars

One area where electric cars have sometimes been perceived to incur higher costs is tyre wear and replacement. The heavier weight of EVs due to their batteries and the instant torque delivered by electric motors can potentially lead to faster tyre wear compared to lighter, less torquey petrol or diesel cars. Some studies have suggested that EV tyres might wear out an average of 67% more quickly than those on comparable ICE cars.
However, the extent of tyre wear can be influenced by several factors, including driving style, the type of tyres fitted to the vehicle, and proper tyre maintenance. Aggressive acceleration and braking can significantly increase tyre wear in any vehicle, and the readily available torque in EVs might tempt some drivers to adopt a more spirited driving style. Tyre manufacturers are also developing more durable tyres specifically designed for electric vehicles, featuring different rubber compounds and reinforced sidewalls to better handle the weight and torque characteristics of EVs.
While some reports indicate potentially faster wear, data from fleet operators suggests that tyre replacement frequency for EVs might not be significantly different from comparable combustion engine cars when driven normally. Proper tyre pressure maintenance and regular rotation can also help to extend tyre life in EVs. Ultimately, while tyre wear might be a consideration, especially for drivers with more dynamic driving habits, it's not necessarily a consistently higher cost for all EV owners.

Electric Car Battery Health and Replacement Costs

The health and longevity of the electric car battery are crucial factors in the long-term cost of ownership. EV batteries do degrade over time, losing some of their capacity due to factors like temperature, charging cycles, and the age of the battery. Extreme temperatures, particularly heat, and frequent use of DC fast charging can accelerate battery degradation. Maintaining the battery charge level between 20% and 80% for daily use and avoiding prolonged periods at 100% or near 0% charge can help prolong battery life.
Modern EV batteries are designed to last for a significant period, with most manufacturers offering warranties of 8 years or 100,000 miles, whichever comes first. Some studies suggest that EV batteries can last for 12 to 15 years in moderate climates or between 100,000 and 200,000 miles. The average degradation rate has been improving, with recent analysis showing an average of around 1.8% per year under moderate conditions.
While battery replacement can be a significant expense, potentially ranging from £4,000 to £36,000 depending on the model , it's important to consider that this is typically not a cost incurred within the first decade of ownership for most EVs. Additionally, battery technology is continuously improving, leading to longer lifespans and potentially lower replacement costs in the future. Proper battery care and adherence to manufacturer guidelines can help maximize the lifespan of the EV battery.

Navigating Taxes and Incentives

The financial landscape of electric car ownership in the UK in 2025 is also shaped by various taxes and incentives implemented by the government.

Changes to Vehicle Excise Duty (VED) for Electric Cars

A significant change in 2025 is the introduction of Vehicle Excise Duty (VED), commonly known as road tax, for electric cars, ending their previous exemption. For new zero-emission cars registered on or after April 1, 2025, owners will need to pay the lowest first-year rate of VED, set at £10. From the second year of registration onwards, these vehicles will move to the standard rate for cars, which is £195 per year.
Electric cars registered between April 1, 2017, and March 31, 2025, will also pay the standard rate of £195 per year starting with their next tax renewal after April 2025. Older electric vehicles registered between March 1, 2001, and March 31, 2017, will have a tax rate of £20 per year.
Additionally, the Expensive Car Supplement will now apply to new zero-emission cars registered on or after April 1, 2025, with a list price exceeding £40,000. This supplement adds an extra £425 per year for the first five years that the standard rate is paid, meaning owners of such expensive EVs will pay a total of £620 per year for road tax from the second year of ownership. These changes mean that electric car owners will now need to factor in annual VED costs, which can be significant for higher-priced models.

Benefit-in-Kind (BiK) Tax for Electric Company Cars

For employees who receive an electric car as a company benefit and use it for personal journeys, Benefit-in-Kind (BiK) tax applies. While the BiK rate for fully electric cars has been historically low to incentivize adoption, it is set to increase in the coming years. For the 2025/2026 tax year, the BiK rate for zero-emission company cars will be 3%, an increase from the 2% rate in 2024/2025. This rate is scheduled to rise by 1% each year until 2028, reaching 5%, and then by 2% annually until 2030, capping at 9%.
Despite these planned increases, the BiK rates for electric cars remain significantly lower than those for petrol and diesel company cars, which can range from 20% to 37% depending on the car's emissions. This continues to make electric cars a tax-efficient benefit for employees. Furthermore, businesses that purchase new and unused electric cars for their operations can often claim a 100% first-year capital allowance, allowing them to deduct the entire cost from their profits before tax.

Government Grants and Incentives

While the direct Plug-in Car Grant for purchasing new electric cars ended in 2022, some government grants and incentives remain available in the UK in 2025 to support the transition to electric vehicles.
The Plug-in Vehicle Grant continues to offer discounts on the purchase price of certain types of low-emission vehicles, such as vans (up to £5,000), motorcycles (up to £500), wheelchair accessible vehicles (£2,500), and taxis (£4,000). These grants are typically applied as a discount by the dealer at the point of sale.
For individuals looking to install home charging points, the Electric Vehicle Chargepoint Grant provides up to £350 towards the cost for renters and flat owners who own an eligible electric vehicle and have off-street parking. Landlords can also benefit from this grant, receiving up to £350 per chargepoint socket for residential and commercial properties, with limits on the number of grants they can claim per year. Businesses can take advantage of the Workplace Charging Scheme, which offers a subsidy of up to 75% (capped at £350 per socket) towards the cost of purchasing and installing EV charge points at workplaces, for up to 40 sockets per applicant. Many of these grants have been extended until March 31, 2026.

Impact of Ultra Low Emission Zones (ULEZ) and Congestion Charges

In urban areas, particularly London, Ultra Low Emission Zones (ULEZ) and Congestion Charges can impact the cost of vehicle ownership. Currently, fully electric vehicles are exempt from the daily £12.50 ULEZ charge in London and other cities, as they meet the required emission standards. This exemption provides a significant cost saving for EV owners driving within these zones.
However, the exemption for the London Congestion Charge, which currently allows battery electric and hydrogen fuel cell vehicles to avoid the £15 daily fee, is set to end on December 25, 2025. After this date, unless eligible for another discount or exemption, all vehicle owners, including those with electric cars, will be required to pay the standard Congestion Charge when driving within the central London zone during operational hours. This upcoming change will add to the running costs for EV owners who regularly drive within the London Congestion Charge zone.

The Long-Term Investment: Depreciation and Resale Value

The depreciation rate and resale value of electric cars are important considerations for owners looking at the long-term financial implications of their purchase.

Analysis of Current Depreciation Rates

Historically, electric cars have tended to depreciate faster than their petrol or diesel counterparts, largely due to factors such as rapid advancements in EV technology and concerns about battery life. However, the landscape is evolving, and the depreciation rates of EVs are showing signs of improvement, particularly for newer and more popular models.
While some studies still indicate a higher depreciation rate for EVs on average compared to ICE vehicles , the gap is narrowing, and for certain models, the residual values are becoming increasingly competitive. For example, some premium EVs, like the Porsche Taycan and certain Tesla models, have demonstrated strong residual values, retaining a higher percentage of their original value compared to some petrol and diesel cars. Conversely, some older or less popular EV models, such as the Renault Zoe and Nissan Leaf, have experienced higher depreciation rates. Overall, the trend suggests that as the EV market matures and consumer confidence grows, the depreciation rates of electric cars are likely to stabilize further.

Factors Influencing Resale Value

Several factors influence the resale value of electric cars in the UK in 2025. One of the most critical factors is the health and remaining capacity of the battery. Buyers in the used market are often concerned about battery degradation and the potential cost of replacement, so EVs with well-maintained batteries and good range retention tend to command higher resale values.
Mileage is another significant factor, with lower mileage vehicles generally being more desirable in the used market. The popularity and demand for a specific EV model also play a crucial role. Models with strong brand recognition, a reputation for reliability, and desirable features are likely to hold their value better. The availability of charging infrastructure in a particular area can also influence the resale value of EVs, as buyers want reassurance that they can easily charge their vehicle. Government incentives and tax credits for new EVs can indirectly impact the used market by affecting the price of new vehicles. Finally, the overall condition of the car, including its maintenance history and cosmetic appearance, will always be important factors in determining its resale value.

Comparing Depreciation: EVs vs. Petrol/Diesel Cars

While electric cars have historically depreciated faster, the gap between EV and petrol/diesel car depreciation rates is closing in 2025. For some popular and premium EV models, the depreciation is now comparable to or even better than that of similar internal combustion engine vehicles. Data from some sources indicates that the average residual value of an EV after three years might be only slightly lower than that of a petrol car.
Factors contributing to this convergence include advancements in battery technology, increasing consumer acceptance of EVs, and the growing demand for used electric vehicles, particularly in urban areas with clean air zone regulations. As the market matures and the perception of EVs as a long-term transportation solution solidifies, the depreciation concerns that once plagued the segment are gradually diminishing for many models. However, it's still important for potential buyers to research the specific depreciation trends of the EV model they are considering.

Beyond the Purchase: Other Potential Savings with Preferential.club

The benefits of joining preferential.club extend beyond potential savings on car insurance, offering members opportunities to save on other essential insurance types as well.
Members of preferential.club may also find opportunities for savings on health insurance. The platform provides access to private health insurance options, including coverage for individuals and families, from various top UK insurers. Similar to car insurance, preferential.club may offer cashback rewards on health insurance policies for members who maintain a claim-free record.
Life insurance is another area where preferential.club membership can provide value. Members can explore life insurance policies designed to secure their family's financial future. While specific savings figures for health and life insurance were not detailed in the provided snippets, the platform's focus on leveraging group buying power and negotiating exclusive rates suggests the potential for cost benefits in these areas as well.
In addition to insurance savings, preferential.club offers other financial benefits and rewards to its members. These include partner perks, providing access to exclusive discounts and offers from a network of premium partners, and loyalty rewards, where members can earn points for each year of membership, redeemable for premium benefits. All these features and benefits can be conveniently accessed and managed through the Preferential Club mobile app, which serves as a central hub for members to explore deals, get quotes, and keep their insurance aligned. By offering potential savings across multiple insurance types and providing additional perks, preferential.club aims to enhance the overall value proposition for its members.

The Verdict: Total Cost of Electric Car Ownership in 2025

To provide a comprehensive overview, the table below presents a comparative cost breakdown of electric car versus petrol car ownership in the UK in 2025 over a five-year period. These figures are based on average estimates derived from the research snippets and assume an average annual mileage of 10,000 miles. For the electric car, we consider a popular compact model, and for the petrol car, a comparable vehicle in the same segment.
CategoryElectric Car (Average)Petrol Car (Average)
Purchase Price (Annualized)£3,000£2,500
Fuel/Charging Cost (Annual)£600£1,200
Insurance Cost (Annual)£650£550
Insurance Cost (with Preferential Club - Estimated 10% Saving)£585N/A
Maintenance Cost (Annual)£175£350
Vehicle Excise Duty (Annual)£100£200
Estimated Total Annual Cost£4,525 (£4,460 with Preferential Club)£4,800
Estimated Total Cost Over 5 Years£22,625 (£22,300 with Preferential Club)£24,000
Note: Purchase price annualized over 5 years. VED is averaged over 5 years considering the first-year rate and potential Expensive Car Supplement. Insurance saving with Preferential Club is an estimated example.
This comparative analysis indicates that, even with the introduction of VED, the total cost of owning an average electric car in the UK in 2025 can be comparable to, and potentially lower than, owning a similar petrol car over a five-year period, especially when factoring in the potential savings on insurance through preferential.club. The lower running costs associated with charging and maintenance contribute significantly to this outcome.

Conclusion: Making an Informed Decision on Electric Car Ownership

In conclusion, the cost of electric car ownership in the UK in 2025 is a multifaceted issue influenced by various factors, including the initial purchase price, charging habits, insurance expenses, maintenance requirements, and government taxes and incentives. While the upfront cost of some EVs can be higher than that of comparable petrol or diesel cars, the long-term running costs, particularly for charging and maintenance, are generally lower.
The introduction of VED for electric cars in 2025 represents an additional annual expense, especially for higher-priced models. However, the Benefit-in-Kind tax rates for electric company cars remain favorable, and grants for charging infrastructure continue to be available. The depreciation rates of EVs are also improving, making them a more viable long-term investment.
For individuals looking to further reduce the costs associated with electric car ownership, joining a community like preferential.club presents a valuable opportunity. The potential savings on car insurance through exclusive rates and cashback offers can directly impact the overall financial outlay. Moreover, the potential for savings on other insurance types like health and life insurance, along with additional member perks, enhances the value proposition of such communities.
Ultimately, the decision of whether to switch to an electric car in 2025 requires a careful evaluation of individual circumstances, driving needs, and financial considerations. However, the data suggests that electric car ownership can be financially viable and even advantageous in the long run, especially when leveraging available savings and benefits. By making an informed decision and exploring opportunities like preferential.club, consumers can navigate the evolving landscape of electric mobility in the UK with greater confidence and potentially significant financial rewards.

Works cited

Thank you for letting us help you!

Get in touch with us on any of these platforms.

© 2025 - WeCovr

The guidance contained within the website is subject to the UK regulatory regime and is therefore targeted at customers in the UK. A FCA regulated expert will contact you after you submit your details to discuss further. WeCovr is a trading style of Political And Credit Risks Ltd which is authorised and regulated by the Financial Conduct Authority. FCA Number 735613.

)