A Guide to Buying an Electric Car
Find out your options for buying an electric car
If you’re thinking about buying an electric car, there are several things that you’ll need to consider.
Once you’ve decided if an EV is for you, you’ll have to decide how to go about buying one: there are a few different ways of doing this.
Should I Buy an Electric Car?
Like with any large purchase, you should give buying an electric car a lot of thought. There are several benefits to EVs, but they are more suited to certain people – like if you live in a Low Emissions Zone, for example.
Benefits of an Electric Car
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Zero-emissions. Electric cars don’t produce any tailpipe emissions. This makes driving one very environmentally friendly.
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You don't need to pay emissions-based charges. If you drive an electric car, you don’t have to pay road tax, the London Congestion Charge or drive through any Clean Air Zones.
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Convenient charging. Rather than having to find a petrol station, you can charge your electric car at home overnight.
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Lower running costs. While upfront costs may be higher for an electric car than the equivalent ICE, you can save money on charging and other running costs.
What Should I Consider When Buying an Electric Car?
Since buying an electric car is a big commitment, you should take into consideration a few different things.
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What are you planning to use it for? Will you be using it to simply run errands around the city, or do you have a lengthy commute to take into consideration?
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Is the car family-friendly? If you have a large family or are thinking about having children soon, you'll want to ensure that the car is suitable for children's car seats and that there is ample boot space.
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How will you charge it? Since the cheapest way to charge an electric car is at home, you'll need to think about having a charger installed. This could be tricky if you don't have a driveway.
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Will I need to change energy tariffs? Since you'll be using significantly more energy, you'll want to look into an EV energy tariff.
What Options are There for Buying an Electric Car?
If you want to buy an electric car so that you can own the car outright, you have three options. You can pay the full price upfront, invest in a Personal Contract Purchase (PCP) Finance package or invest in a Hire Purchase (HP) Finance package.
Pay the Full Price Upfront
If you can pay for your electric car in a one-off, upfront payment, you can buy it without the need to enter into a finance agreement. You can do this with a debit or credit card.
If you plan to use a debit card, make sure you have the full amount in your account and check if you’re subject to a daily purchase limit. If you are, ask your bank to waive it for a one-off payment. You may still have to confirm and authorise the transaction to buy the electric car.
Advantages:
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You own 100% of the car as soon as you leave the dealership
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You don’t have to budget for interest or monthly repayments if you use a debit card
Disadvantages:
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You must have a large sum of money available at the time of purchase
PCP Finance
The most popular way to buy an electric car is through PCP Finance. This is usually the default option offered by dealerships.
You pay an initial deposit (usually 10% of the car’s value) and then monthly repayments over a fixed term. You can increase the initial deposit to reduce the size of the monthly repayments.
If you choose a PCP loan, you are tied into a 2–4-year agreement and you can only cancel it if you have paid half of the total cost.
Once you reach the end of your agreement, you have three options:
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Return the car
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Make a ‘Balloon Payment’ to pay off the outstanding balance and keep the car
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Make a ‘Balloon Payment’ as a deposit towards another electric car. This enters you into another PCP agreement
Advantages:
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You have the ability to put down a smaller initial deposit
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There are flexible repayment lengths to help you budget your monthly costs
Disadvantages:
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You are subject to yearly mileage limits with PCP Finance. You are also subject to extra costs if you exceed these limits.
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Monthly repayments mean that you are paying off your electric car for longer. They can also be quite expensive.
HP Finance
HP Finance is the most flexible way to buy an electric car. It works the same as PCP Finance (initial 10% deposit which you can increase and monthly repayments) but you aren’t subject to the same mileage limits.
You automatically own the car at the end of the agreement. However, this does make HP Finance more expensive than PCP Finance as you are paying off the full value of the car.
Advantages:
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No mileage limits, so you don’t have to worry about usage
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Automatically own the car at the end of the agreement
Disadvantages:
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Larger monthly repayments make this an expensive way to buy an electric car
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You don't own the car until after the final repayment, so you will be left without a car if you cancel early
What if I Can’t Afford to Buy an Electric Car?
Electric car ownership isn’t financially viable for everyone. However, that doesn’t mean that you can’t drive one – there are other options.
Electric Car Leasing
You can lease an electric car, which is essentially renting the car over a fixed amount of time. You’ll sign a contract and pay for the car monthly, which can be more affordable than buying an electric car.
There are a number of advantages and disadvantages when it comes to leasing. You can find out about them here.
Electric Car Subscription
An electric car subscription is like leasing an EV, but with less commitment.
It essentially works the same as any other subscription service, such as Netflix or Amazon Prime, and your monthly payments usually cover things such as tax, maintenance, and breakdown cover as well as the car.
You’re not tied in the same way you are to a lease.
You can read more about electric car subscriptions here.
Electric Car Leasing vs Subscription: Which is Better?
Salary Sacrifice Scheme
Depending on your employer, you may be able to drive an electric car through a salary sacrifice scheme.
This is where you sacrifice a portion of your salary each month in return for an electric car. You can save on income tax and national insurance contributions and is generally a cheaper way to drive an EV.
They’re not available for everyone, though – you’ll have to have a word with your employer. You can find out more about salary sacrifice schemes here.
What is the Long-Term Value of an Electric Car?
Electric cars are currently very desirable, due to the increasing demand for sustainable transport. Clean Air Zones, Government incentives and increased road tax for the most polluting ICEs all contribute towards the high-value retention of EVs.
However, they are still quite new, so there isn’t a lot of reliable data about their ability to retain their value. Realistically, electric cars will still depreciate normally and some will lose their value faster than others. The more expensive, luxury models will hold their value better than the lower-end models.
However, current data suggests that electric cars hold their value better than an equivalent petrol or diesel car, on average.
The long-term value of an electric car is likely to increase as the technology improves even further and more people make the switch from ICEs.
Where to Buy an Electric Car
Currently, you can only buy a new electric car from an official manufacturer dealership or directly from the manufacturer.
Second-hand electric cars are becoming more common. You can find these at selected used car dealers and on Autotrader and similar websites.
How Much Does an Electric Car Cost to Run?
So - you’ve bought your electric car – what other costs are you needing to account for?
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Your insurance. You still have to insure an EV, and it is usually more expensive than insuring an ICE vehicle.
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Charging costs. You’ll have to pay for charging like you do with fuel. You can have a charger installed at home, so you’ll have to pay for the installation cost, as well as account for the additional pounds on your energy bill each month.
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EVs still require MOTs and regular servicing – however, electric car service costs are slightly lower than ICE equivalents.
You can read a full run down of electric vehicle running costs here.
When to Buy an Electric Car
This is a question on the minds of many UK drivers. Electric cars are becoming more common and, with the 2035 ban on selling new ICEs drawing nearer, many of us are thinking about switching to an EV.
There is no correct answer to the question “when should I buy an electric car?”. It depends on whether an EV will currently fulfil your driving needs. You must always consider whether an electric car is right for you before committing to buying one in 2025.
Make sure you do some thorough research before committing to the switch, otherwise you could get stuck with a car that doesn’t fit into your daily life very well.
Read More
How Can I Afford an Electric Car?
If you’re not sure whether you can afford to buy an electric car, there’s no need to panic. You can still own an EV using one of these alternatives. Find out more about what’s being done to make electric cars more affordable in this article.
How Much Does an Electric Car Cost?
If you’re thinking about buying an electric car outright, you’ll need to know what sort of budget you need. Read this article to find out what the average cost of an electric car is, as well as the price of every EV currently available in the UK.
How Can I Buy an Electric Car Through a Scrappage Scheme?
Everyone knows that electric vehicles aren’t the cheapest, but a scrappage scheme could help you to save. Though there aren’t many scrappage schemes which are currently available, this article can tell you about existing schemes, and why buying an electric vehicle could be the right choice for you.