Would An Electric Car Save You Money

The process of deciding which new car to buy has changed somewhat in recent years. Not so long ago, potential purchasers would pore over consumer magazines and compare road tests. They would look at performance figures, such as 0-60mph times and top speeds. They would consider fuel consumption and resale values and they would look at specifications and equipment levels. Some would just prefer one badge over another. 

Nowadays there is something else to consider before arranging the test drive: how green is your chosen vehicle?
In the past, considering the effect your car would have on the environment was probably restricted to a relatively few enlightened individuals. More recently, though, government targets have contributed to savings which on paper make buying an electric car a sound financial choice. Indeed, MoneySupermarket has estimated it could save you £952.08 per year.

Savings such as that sound impressive but before splashing out on an electric car it is probably worth taking a closer look at the figures. The savings are based on an average car covering 8,430 miles per year and achieving an average of 52.5 mpg. Savings are made up of reductions in fuel costs, car insurance and road tax. Of these, fuel savings are by far the most important, accounting for £773.18 per year. Next is road tax, which saves £155 and finally motor insurance, with a reduction in premiums of £23.90.

This might indeed tempt the average motorist to abandon the internal-combustion engine but there are some other factors which need to be included. The initial purchase price of the car, for example, needs to be considered, as does the government's tendency to alter the rules
How Real Are the Savings?

It is useful to consider the same car in both formats. The new electric Ford Focus will cost around £25,000. That is after the government has provided the usual £5,000 subsidy. A standard Focus can be bought for £14,000 but you might want a pricier model. A Focus Zetec S, for example, costs £19,295.

The sums are pretty easy. Own the electric car from new for five years and you are still around £1,000 out of pocket. Suddenly those electric car savings don't look so good.
The picture gets more complicated if you look more closely. That £25,000 figure is based on a government subsidy of £5,000. It is clear, though, that government policy can change and that subsidy may not be around forever. Once purchased, other changes could take place which would radically alter the numbers.

As more people switch to electric cars, the government loses money from fuel tax. These are tough economic times, so might a levy be introduced on electricity to charge cars? Road-tax exemption could easily be reduced or removed for the same reasons.

Future-Proofing Your Electric Car

There are further complications which are harder to quantify. The standard petrol or diesel car has been around for a long time. The technology is pretty stable. A car you bought ten years or even twenty years ago is little different from the models being sold today and still uses the same fuel. It goes to the same petrol stations and is serviced by the same garages as more modern cars.

Will the same be true of an electric car you buy today? The technology is developing quickly and things are likely to change. What if a new type of battery becomes the norm? What if charging stations can only handle the new batteries? Alternatively, what if hybrid cars become the standard or fuel-cell vehicles make a breakthrough?

In all of these cases a buyer of an electric car today is quickly going to be left with an obsolete vehicle. This would mean huge depreciation and a car that could be difficult to sell.
In summary, the savings quoted for electric cars look speculative at best and even misleading. 

Author Bio:

The economic case for buying one is quite thin based on this data from MoneySupermarket. That leaves the purely environmental reasons, which when looked at over the life cycle of the car may also be less compelling that they first appear.
Article by Chris Spann