The True Cost of Driving Electric: Ownership, Leasing, and Long-Term Value
When it comes to buying an electric car, the first thing many people notice is the price tag.
EVs often look more expensive than their petrol or diesel counterparts, and that can be enough to make potential buyers hesitate. But focusing only on the sticker price tells just part of the story.
The real question isn’t “Can I afford an EV today?” but rather “What will it cost me or save me over the years I drive it?”Once you factor in running costs, leasing options, government incentives, and long-term savings, the numbers often tilt in favour of going electric.
Purchase vs. Lease: Which Route Makes Sense?
Leasing has become a popular way to get behind the wheel of an EV. It offers lower upfront payments, predictable monthly costs, and the ability to upgrade as battery technology improves. For drivers worried about depreciation, leasing can feel like the safer bet.
Buying, on the other hand, comes with its own rewards. Ownership means no mileage limits, eligibility for government incentives, and, over time, loan payments disappear and the car becomes an asset.
The right choice depends on your budget, driving habits, and how long you plan to keep the car. Consider an example: a driver is comparing a £400 per month lease on a compact EV with a £30,000 purchase price. Over four years, leasing costs £19,200 with no asset at the end, while buying (with financing) may cost more upfront but leaves the driver with a car worth perhaps £12,000 in resale value. Running these comparisons with a car lease calculator highlights whether the lower monthly payment of a lease really outweighs the long-term value of ownership.
The Hidden Savings That Add Up
One of the biggest advantages of EVs is what you don’t have to pay for. According to the Energy Saving Trust, EVs can be up to 40 percent cheaper to service and maintain than petrol or diesel cars. That’s largely thanks to fewer moving parts, no oil changes, and reduced wear and tear. Charging is also significantly cheaper: the Trust estimates that powering an EV for 220 miles can cost around £17 at home, compared with roughly £45 in petrol or diesel for the same distance.
For many households, the difference adds up to about £100–£200 a month in lower running costs. The UK government has reported that the average driver can save around £700 a year by switching to an EV.
It’s easy to overlook those savings in the monthly budget, but they accumulate quickly. If that £700 yearly saving is invested with a modest annual return of 4 percent, a future value calculator shows it grows to roughly £8,400 over 10 years. Extend the horizon to 20 years, and it compounds to about £21,000. What looks like a modest annual saving can, over time, cover a major expense such as a battery replacement or provide a substantial contribution to a new EV.
Long-Term Value: Do EVs Pay Off?
Depreciation is often cited as a reason to hesitate on EVs. Research by AM Online in 2023 showed that EVs were losing on average £11,000 in value over the first three years, almost twice as fast as some petrol cars. A peer-reviewed study in the World Electric Vehicle Journal reported average three-year depreciation rates of about 51 percent for EVs, compared with 31 percent for ICE vehicles.
Yet depreciation is only one part of the picture. Lower running costs, government grants, and improving resale values for newer EVs help to balance the equation. According to the EVUK ‘Cost of Driving Electric’ analysis (2025) by New AutoMotive, over a wide range of models and driving circumstances, most drivers can expect an average lifetime saving of around £5,850 when switching from petrol/diesel to electric; though that average depends heavily on factors like access to home charging, model choice, and driving distance.
To understand whether an EV pays off, investors use the concept of net present value. Take an example: a petrol car costs £28,000, while a similar EV is £34,000. The EV costs £6,000 more upfront but delivers £1,800 in annual fuel and maintenance savings, benefits from a £2,500 government grant, and has an expected resale value of £12,000 after eight years compared with £6,000 for the petrol car.
Discounting these future savings and benefits at a rate of 5 percent shows that the EV produces a positive net return of about £1,500 over its lifetime. In other words, when evaluated using a net present value calculator, the EV proves to be the financially stronger choice.
The Fleet Perspective
For individuals, the decision may come down to whether the monthly payments feel affordable. But for businesses managing multiple vehicles, the stakes are higher. A company replacing 20 petrol vans with EVs may face an extra £120,000 in purchase costs, but could save £36,000 a year in fuel and maintenance. Add in favourable tax treatment and the reputational benefits of adopting green technology, and the case for EV fleets becomes clear.
According to Clear Vehicle Data, EVs are nearly 30 percent cheaper to service over five years compared with petrol cars. Spread across dozens or hundreds of vehicles, those savings multiply quickly. Fleet managers already think in terms of return on investment, and applying financial tools like future value and present value simply confirms that cleaner transport can also be the smarter financial choice.
Beyond Numbers: Peace of Mind and Predictability
Financial calculations tell most of the story, but there are other advantages worth noting. EVs bring predictability in running costs at a time when oil prices remain volatile. They also insulate drivers from future restrictions on fossil fuel cars, which are already being phased out in many cities. These non-financial factors can make the decision easier, even if the spreadsheet shows only a modest advantage.
Conclusion: Looking Beyond the Price Tag
The cost of driving electric is not just about the purchase price or lease rate. It is about how the decision plays out over the years you own or lease the car. From the monthly savings on fuel and servicing, confirmed by independent studies, to the long-term value captured in resale or fleet operations, EVs often make more financial sense than they first appear.
When you look at the numbers carefully, the higher sticker price is less a barrier than a short-term hurdle. Whether it’s the monthly savings that compound into thousands, or the present value of future benefits that outweigh the upfront premium, the financial case for EVs is strong. For many drivers, electric cars are not just a cleaner option for the planet but also a smarter investment in their financial future.
