New electric cars may look expensive but here's why they are CHEAPER to buy than petrol versions

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There's a general consensus around electric cars. 

It goes like this: If you can charge one at home it will unquestionably save you money compared to filling up a petrol car at the pumps, but the higher price tags for EVs  mean it can take years to earn back the premium you spent buying it.

What also puts a significant drag on the financial reward of EV ownership is their appalling resale values, as they typically depreciate like a stone in the first couple of years while petrol cars tend to more resolutely hold onto their value.

It means any savings made from the lower running costs of an electric vehicle are wiped out by the relatively low price you'll end up selling it for. 

However, our exclusive study with Insider Car Deals reveals that a new EV is almost always going to be the cheaper option to buy over a petrol car for more than four in five UK drivers.

We've analysed the prices paid for ten popular EVs against the closest petrol or hybrid alternative from the same brand, using models that are almost identical in size, performance and equipment. 

And our research reveals that the combination of grants, greater dealer discounting and low–interest finance packages makes electric the cheaper option to buy in most instances...

We teamed up with Insider Car Deals to analyse the price you will pay for 10 new EVs against their closest petrol equivalent. And it turns out the electric option is commonly cheaper to buy

EVs do 'cost' more...

The 'list price' of electric cars (the one quoted to prospective buyers by manufacturers, which is almost always open to negotiation) is generally higher - sometimes up to £10,000 - than petrol and hybrid models for a reason.

It is tied almost entirely to the cost of the battery, which remains expensive and this is not declining at the rate experts had forecast some five years ago.

A 2021 BloombergNEF EV cost report and a 2024 Gartner electric car study – equally credible insights – both predicted EVs would be cheaper to make than petrol cars by 2027 due to the falling price of batteries.

This is looking less likely now and car buyers are still being quoted a higher headline price on most EVs versus a petrol alternative. 

And while there are already some examples in showrooms where a model is equal in price with either an electric drivetrain or combustion engine – the Vauxhall Frontera is a notable case in price point – we haven't quite reached market–wide parity... yet.

How can new EVs work out cheaper to buy than petrol cars?

Despite EVs still having higher price tags, our exclusive study reveals most drivers will still end up paying less for a new EV than an equivalent petrol or hybrid car with all the same features.

This is due to a cocktail of factors that dramatically reduce how much you will pay for a new electric model.

Firstly, the taxpayer–backed Electric Car Grant (ECG) – which will be funded until 2029/30 – guarantees to wipe between £1,500 and £3,750 off the list price of EVs eligible for the scheme. 

Which models qualify is determined by the government based on how greenly the vehicle, and its battery, is made.

Secondly, car makers are required to meet increasing EV sales under the government's binding Zero Emission Vehicle (ZEV) mandate. 

This has intensified pressure on manufacturers and their dealers to provide more discounting to make EVs more appealing while natural demand for electric cars remains relatively low.

Slashing prices is considered the only way for some brands to get enough units out the door to adhere to the mandate's quota and avoid fines.

It too explains why in most of the ten comparisons Insider Car Deals conducted, the interest rates on personal contract purchase (PCP) finance deals are far lower – or even zero – on many of the EVs, as manufacturers attempt to make them more attractive.

And this really matters to car buyers. With 85 per cent of new private car sales in 2025 being acquired via PCP finance, these low APR [Annual Percentage Rates] play a pivotal part in making EVs the more cost effective choice.

Crucially, PCP agreements - which run for three or four years and typically see the customer hand the car back at the end of the contract period unless they pay a lump sum to keep it - also remove the budgetary strain of EV depreciation from drivers, instead burdening the poor residual value onto the finance provider. 

'When you run a head–to–head comparison – spanning everything from small cars to luxury SUVs – EVs come out the cheapest on a PCP deal in seven out of ten cases,' Pat Hoy, founder of Insider Car Deals explains.

'Manufacturers, acutely aware that 33 per cent of all new–car sales must be an EV this year [as per the ZEV mandate] are pulling every lever available, including lower PCP APRs, increased dealer discounts, manufacturer incentives and, where applicable, government EV grants, to make the numbers stack up. 

'It means buyers who make the switch to electric could save as much as 28.6 per cent, or £181, every single month.'

Our exclusive report comes as Autotrader reports that new EV prices have now dropped below petrol cars for the first time. 

This month, the average new electric car is priced at £42,620 compared with £43,405 for a new petrol model — a £785 difference in favour of EVs. 

We've listed all ten comparisons of like–for–like EVs versus petrol or hybrid equivalents. Each is an example of the closest likeness in terms of dimensions, power and equipment.

We have provided each car's OTR (on the road) price and the biggest achievable discount Pat's Insider Car Deals mystery shoppers found they could strike in showrooms.

And we've also included the typical monthly PCP repayments for each vehicle to show how market–wide lower interest rates on EVs are generally making them more affordable to purchase. 

EXAMPLE 1: Dacia Spring EV versus Sandero Stepway 

ELECTRIC

Model: Dacia Spring EV

Trim: 75kW 24kWh Extreme Auto

OTR price: £16,990

Insider Car Deals Target Price: £14,841

Target Price saving: £2,149 (12.6%)

PCP monthly payments: £157

PETROL

Model: Dacia Sandero Stepway

Trim: 1.0 TCE 110 Extreme

OTR price: £18,380

Insider Car Deals Target Price: £17,486

Target Price saving: £894 (4.9%)

PCP monthly payments: £207

Our first example is a like–for–like comparison of budget brand Dacia. Its Spring EV (which starts from £14,995) is Britain's cheapest new electric car, though the Sandero petrol is also a snip with a starting price of £14,765 for the ultra–basic Essential trim. 

But the closest equivalent to the SUV–inspired Spring is the Sandero Stepway with its slightly raised ride height. Both are front-wheel drive.

This is one of the rare examples where the EV has a lower OTR price than the petrol, despite the cars having the same 'Extreme' trim level. And dealers are also more willing to discount the Spring, extending the price gap to £2,650.

Zero per cent interest on PCP deals for the Spring (compared to 7.4 per cent on the Sandero Stepway) also make the monthly payments a lot more reasonable, with the EV costing £50 a month less.

Cheaper option: Dacia Spring EV

EXAMPLE 2: Fiat Grande Panda EV versus Hybrid

ELECTRIC

Model: Fiat Grande Panda Electric

Trim: 83kW Icon 44kWh Auto

OTR price: £21,995

Insider Car Deals Target Price: £20,179

Target Price saving: £1,816 (8.3%)

PCP monthly payments: £190

PETROL

Model: Fiat Grande Panda Hybrid

Trim: 1.2 Hybrid 48V 110 Icon 5dr eDCT–6

OTR price: £20,010

Insider Car Deals Target Price: £18,911

Target Price saving: £1,099 (5.5%)

PCP monthly payments: £200

The Fiat Grande Panda is a prime example of how the slower–than–expected uptake of electric cars has forced brands to pivot on strategy, with the Italian marque forced to release a 1.2–litre petrol hybrid alongside the EV to appease those customers who refuse to make the switch.

While the electric version's OTR price is almost £2,000 higher, Pat says his secret shoppers found they could negotiate bigger discounts on the EV to narrow the price gap to just over £1,000.

But even despite it costing more in headline terms, when factoring in lower APRs on the Grande Panda Electric over the Hybrid, the EV turns out to cost £10 less a month on PCP.

Cheaper option: Fiat Grande Panda Electric 

EXAMPLE 3: Peugeot e–208 versus Peugeot 208

ELECTRIC

Model: Peugeot e–208

Trim: 51kWh 156 GT

OTR price: £33,100

Insider Car Deals Target Price: £23,807

Target Price saving: £9,293* (23.5%)

PCP monthly payments: £281

PETROL

Model: Peugeot 208

Trim: 1.2 Hybrid 145 GT e–DSC6

OTR price: £30,315

Insider Car Deals Target Price: £24,183

Target Price saving: £6,132 (20.2%)

PCP monthly payments: £273

Peugeot's parent company Stellantis is well known for heavy discounting to shift new models, but with the electric e–208 and 208 hybrid comparison, there's not a lot in it.

Insider Car Deals says the target discount on the 208 hybrid is 20.2 per cent – a saving of over £6,000. However, there's more money to be save on the e–208, with mystery shoppers getting the price down 23.5 per cent, which is equivalent to almost £9,300.

Some £1,500 of the saving on the e–208 is via the Electric Car Grant.

However, with Peugeot dealers standing firm on PCP APRs, the EV still works out at £8 a month more expensive. Though, for anyone can plug in at home, that cost difference will quickly be wiped out by the lower charging costs. 

Cheaper option: Peugeot 208 Hybrid 

EXAMPLE 4: VW ID.3 versus VW Golf

ELECTRIC

Model: Volkswagen ID.3

Trim: 125kW Match Pure 52kWh 5dr Auto

OTR price: £32,220

Insider Car Deals Target Price: £24,655

Target Price saving: £7,565* (23.5%)

PCP monthly payments: £235

PETROL

Model: Volkswagen Golf

Trim: 1.5 eTSI 150 Match 5dr DSG

OTR price: £31,890

Insider Car Deals Target Price: £26,364

Target Price saving: £5,526 (17.3%)

PCP monthly payments: £306

The Volkswagen ID.3 and Golf comparison is one of the easiest to make across the market. The EV is designed to be the electric alternative to the evergreen VW family hatchback, and for this example we've checked pricing on 'Match' trim examples.

Wile the ID.3 is marginally more expensive based on the OTR price, Insider Car Deals found it could hammer out bigger discount on the EV than the petrol equivalent.

The ID.3 qualifying for the £1,500 ECG also helps towards its £7,500 saving.

In terms of APR on finance contracts, Pat's team found that PCP deals for the ID.3 are at a lower rate of interest, which means the electric option is a massive £71–a–month less expensive to purchase.

Cheaper option: VW ID.3

EXAMPLE 5: Ford Puma Gen–E versus Ford Puma

ELECTRIC

Model: Ford Puma Gen–E

Trim: 124kW Premium 47kWh Auto

OTR price: £31,995

Insider Car Deals Target Price: £26,570

Target Price saving: £7,565** (23.5%)

PCP monthly payments: £273

PETROL

Model: Ford Puma

Trim: 1.0 EcoBoost mHEV 155 ST–Line X

OTR price: £32,245

Insider Car Deals Target Price: £28,617

Target Price saving: £3,628 (11.3%)

PCP monthly payments: £298

The Ford Puma is the best–selling new car in Britain. In fact, it has been for the last three years running.

In 2025, the manufacturer launched the Gen–E – an all–electric variant to appease customers wanting to make the transition.

In terms of comparable performance and equipment, the Puma Gen–E has a lower list price than the mild–hybrid petrol ST–Line X. Extending the price gap is the £3,750 grant from the Government, which – along with dealer discounting – knocks almost a quarter off the OTR price for the EV.

As such, the monthly payments on the Gen–E are £25 less than the petrol despite the same interest rate on the PCP agreements for both fuel types.

Cheaper option: Ford Puma Gen–E

EXAMPLE 6: Skoda Enyaq EV versus Skoda Kodiaq

ELECTRIC

Model: Skoda Enyaq

Trim: 150kW 60 SE L 63kWh 5dr Auto

OTR price: £39,520

Insider Car Deals Target Price: £34,689

Target Price saving: £4,831* (12.2%)

PCP monthly payments: £338

PETROL

Model: Skoda Kodiaq

Trim: 1.5 TSI e–TEC SE 5dr DSG

OTR price: £39,045

Insider Car Deals Target Price: £33,742

Target Price saving: £5,303 (13.6%)

PCP monthly payments: £341

This comparison of Skoda family SUVs is an interesting one.

While the Enyaq EV is very similar in price to the Kodiaq petrol we've used for our comparison, the Insider Car Deals mystery shoppers managed to negotiate a bigger discount on the petrol model. This is all the more surprising given the Enyaq also qualifies for the Government's lower tier £1,500 ECG.

However, PCP finance on the Enyaq is subject to 0 per cent APR, while the Kodiaq is 5.9 per cent. 

As such, the Enyaq, despite being pricier even after cash discounts, is in fact the cheaper one to buy.

Cheaper option: Skoda Enyaq EV

EXAMPLE 7: VW ID.4 versus VW Tiguan 

ELECTRIC

Model: Volkswagen ID.4

Trim: 210kW Match Pro 77kWh 5dr Auto

OTR price: £44,400

Insider Car Deals Target Price: £35,650

Target Price saving: £8,750 (19.7%)

PCP monthly payments: £362

PETROL

Model: Volkswagen Tiguan

Trim: 1.5 TSI e–TEC SE 5dr DSG

OTR price: £39,950

Insider Car Deals Target Price: £33,064

Target Price saving: £6,886 (17.2%)

PCP monthly payments: £362

One of the more striking findings from the study involves VW Group stablemates the ID.4 electric and combustion-engined Tiguan.

Interestingly, they come out at identical monthly payments of £362, despite the ID.4 costing £4,450 more to buy in the first place.

However, the Insider Car Deals mystery shoppers managed to negotiate a 19.7 per cent discount on the ID.4 and just a 17.2 per cent saving on the Tiguan, closing the price difference to just £2,500.

With Pat's team finding more favourable APRs on the ID.4 PCP agreements, there's no splitting the two on finance. 

Cheaper option: Draw 

EXAMPLE 8: BMW i4 versus BMW 4 Series

ELECTRIC

Model: BMW i4

Trim: 210kW eDrive35 M Sport 70kWh

OTR price: £52,870

Insider Car Deals Target Price: £47,943

Target Price saving: £4,927 (9.3%)

PCP monthly payments: £543

PETROL

Model: BMW 4 Series

Trim: 420i 2.0 M Sport Pro LCI Auto

OTR price: £52,340

Insider Car Deals Target Price: £45,845

Target Price saving: £6,495 (12.4%)

PCP monthly payments: £504

The only comparison where the EV is significantly more expensive to buy is the BMW i4 versus the 4 Series.

Both cars start from a similar price point, but BMW is currently offering significantly larger discounts on the petrol model, which the i4 - despite carrying a lower APR - can't offset.

As such, a monthly PCP payment on the electric i4 is £543, while the 2.0–litre petrol 4 Series is £39 cheaper at £504.

Cheaper option: BMW 4 Series 

EXAMPLE 9: Audi Q6 E–tron versus Audi Q5 Sportback

ELECTRIC

Model: Audi Q6 E–tron

Trim: 100kWh Performance 306ps Sport 

OTR price: £64,065

Insider Car Deals Target Price: £52,040

Target Price saving: £12,025 (18.8%)

PCP monthly payments: £450

PETROL

Model: Audi Q5 Sportback

Trim: e–HBD 2.0 299 Quattro Sport

OTR price: £60,890

Insider Car Deals Target Price: £53,901

Target Price saving: £6,989 (11.5%)

PCP monthly payments: £631

For drivers searching for a plush, stylish family SUV, Audi showrooms will have an option across both fuel types. For instance, the electric Q6 E–tron and petrol Q5 Sportback are similar in size and spec, despite their powertrain differences.

In terms of OTR price, the EV comes at a premium in excess of £3,000.

However, Insider Car Deals says you can negotiate up to 18.8 per cent off the price of the E–tron, while the best they could get off the Q5 was 11.5 per cent. As such, after discounting, the petrol model ends up more expensive.

With lower APR rates on the EV, PCP monthly finance payments are £181 cheaper for the electric option.

Cheaper option: Audi Q6 E–tron

EXAMPLE 10: BMW iX versus BMW X5 

ELECTRIC

Model: BMW iX

Trim: 400kW xDrive60 M Sport 112kWh

OTR price: £93,205

Insider Car Deals Target Price: £73,754

Target Price saving: £19,451 (20.9%)

PCP monthly payments: £660

PETROL

Model: BMW X5

Trim: xDrive40d MHT M Sport Auto

OTR price: £84,875

Insider Car Deals Target Price: £74,634

Target Price saving: £10,241 (12.1%)

PCP monthly payments: £750

The last example Insider Car Deals compared for Daily Mail and This is Money is the super luxurious BMW iX electric SUV against the long–running X5.

Again, in the same spec, the EV premium for the OTR price rings in at well over £8,000. But bigger discounting means the iX is nearly £1,000 cheaper once you've haggled a deal with a salesman or woman.

With the iX subject to 2.9 per cent APR on finance arrangements – and the petrol X5 at 4.9 per cent APR – the EV works out £90 a month cheaper for PCP monthly payments.

Cheaper option: BMW iX 

Insider Car Deals Target Price based on independent real–world market research. Insider Car Deals does not sell cars or list offers

PCP monthly payments relate to each respective model range and not just the specified trim. All PCP monthly payments shown are illustrative only and do not constitute an offer or financial advice. Figures are based on manufacturers’ published PCP terms and typically assume a 4–year term, 8,000–10,000 miles per year, a 15% customer deposit, and any applicable manufacturer finance contribution. A Guaranteed Future Value (GFV) or final payment may be required to keep the vehicle at the end of the agreement. Always request a full written quotation from a supplying dealer before committing to purchase

*Model is eligible for tier 1 £1,500 Electric Car Grant

**Model is eligible for tier 2 £3,750 Electric Car Grant