Electric Cars vs Petrol & Diesel: Which Is Cheaper?

The question of whether electric cars are cheaper than petrol or diesel is no longer answered with a simple yes or no. Upfront prices for electric cars remain higher, tax advantages have narrowed, and EV insurance costs have risen. At the same time, fuel prices remain volatile and maintenance costs for petrol and diesel cars continue to climb as vehicles become more complex.

Lets take a look at the total cost of ownership, to work out which is cheaper for your circumtances.

A note on the data used in this comparison

Before diving in, it’s important to be transparent about the numbers.

The figures below are indicative UK averages, designed to show relative differences, not exact personal outcomes. They assume:

• Around 60,000 miles over five years
• A typical privately owned car
• Home charging for most EV mileage, with some public charging mixed in
• Average insurance costs, not specialist or high-risk profiles

Real-world costs will vary depending on mileage, location, energy tariffs, insurance history and vehicle choice. This comparison is intended to illustrate directional trends, not replace individual quotes or budgeting.

Typical 5-Year Ownership Costs in the UK (2026)

What this table shows is subtle but important. Electric cars are no longer dramatically cheaper across the board but they are often competitive, and sometimes cheaper, once all costs are considered together.

Purchase price and depreciation: where EVs still struggle

There’s no getting around it: electric cars still cost more to buy.

Even as prices soften, the average new EV remains noticeably more expensive than a petrol equivalent. That higher starting point also means larger absolute depreciation in the first few years.

However, depreciation behaviour has changed. Electric cars tend to lose value more quickly early on, then stabilise. Petrol and diesel cars usually decline more steadily year after year. For buyers who keep a car for longer than five years (or buy used) this gap narrows significantly.

This is one reason the used EV market has become such a focal point for value-conscious drivers.

Fuel vs charging: the biggest structural difference

Energy costs remain the clearest financial advantage for electric cars.

A petrol driver covering average UK mileage can easily spend close to £2,000 a year on fuel. Diesel drivers often spend slightly less, but still face high and unpredictable costs.

By contrast, an electric car charged mostly at home typically costs less than half that per year to run. Even with higher electricity prices than in the past, off-peak tariffs and overnight charging continue to tilt the numbers in favour of EVs.

That advantage shrinks if you rely heavily on public rapid charging, but for most owners with home access, electricity remains cheaper and more controllable than petrol or diesel.

Servicing and maintenance: quiet savings that add up

Electric cars don’t eliminate maintenance costs, but they change their shape.

There are no oil changes, no exhaust systems, no clutches and fewer moving parts overall. Brake wear is also reduced thanks to regenerative braking. Individually, these savings don’t always feel dramatic — but over five years they compound.

Petrol and diesel cars, particularly as they age, tend to accumulate routine costs more consistently. Filters, fluids and mechanical components all add to ownership spend, especially beyond the warranty period.

This is one of the least glamorous but most reliable areas where EVs retain an advantage.

Insurance: the EV pressure point

Insurance is where electric cars currently lose ground.

Premiums for EVs have risen faster than for petrol and diesel equivalents, driven by higher repair costs, specialist parts and cautious underwriting around batteries.

That said, insurance costs vary widely by model. Smaller, lower-powered EVs often sit closer to petrol cars than headlines suggest, while premium electric models can push averages higher.

Importantly, insurance rarely outweighs fuel and maintenance savings over a full ownership cycle — but it does narrow the gap.

Road tax and emissions charges

Electric cars now pay Vehicle Excise Duty, which removes one of their earlier financial advantages. In practice, the difference over five years is relatively modest.

Where EVs still benefit is in future regulatory risk. Clean air zones, emissions penalties and local restrictions continue to affect petrol and diesel vehicles, particularly older models. Electric cars are largely insulated from these changes.

That insulation doesn’t always show up in spreadsheets, but it does affect long-term certainty.

When electric is cheaper and when it isn’t

Electric cars tend to be cheaper to own when:

• You can charge at home most of the time
• You drive moderate to high annual mileage
• You keep the car for several years
• You access salary sacrifice or company car schemes

Petrol or diesel can still make more sense when:

• Annual mileage is very low
• Charging relies entirely on public infrastructure
• Towing or heavy long-distance work is routine
• Upfront budget is the overriding constraint

This is why blanket statements about EV costs are rarely helpful. Usage matters as much as technology.

The role of salary sacrifice and company cars

For company car drivers, the equation changes dramatically.

Low benefit-in-kind rates continue to make electric cars significantly cheaper than petrol or diesel equivalents when taken through salary sacrifice schemes. Even as incentives gradually reduce, the gap remains large enough to dominate most cost comparisons.

For many drivers, this alone determines the answer to the “which is cheaper?” question.

John Ellmore

John is the Editor and Spokesperson for Electric Car Guide.

With over 20 years of writing experience, he has written for titles such as City AM, FE News and NerdWallet.com, covering various automotive and personal finance topics.

John’s market commentary has been covered by the likes of The Express, The Independent, Yahoo Finance and The Evening Standard.