Saving Money

While the initial cost of a vehicle with such new technology may stop people from making the switch, hybrid and electric vehicles are getting cheaper all the time as the engineering involved gets more efficient and manufacturing costs are brought down.

Like many significant purchases in life, the initial investment in a hybrid or electric car will pay off in the long term because of the lower day-to-day costs.

Cost Of Fuel

It’s significantly more cost efficient for drivers to use electricity, even if it's in conjunction with an internal combustion engine in a hybrid, than to drive a purely petrol or diesel vehicle.

Charging at home can be cheap and easy if one has access to off-street parking (particularly if charging overnight or on specialist tariffs offered by many energy providers) and it is getting increasingly fast and efficient for those without off-street parking as more charging hubs open and councils take advantage of government incentives to provide on-street charging points.

Auto Trader recently reported: "EV owners can save £140 per 1,000 miles on running costs; the majority of which comes from fuel."

There's a reason why some drivers of hybrid or electric vehicles can be so smug – they love saving money!

Vehicle Excise Duty / Road Tax

At the time of writing, many electrified vehicles are exempt from road tax (Vehicle Excise Duty / VED), while others benefit from a discount compared to petrol or diesel vehicles.

Right now in the UK, fully-electric cars aren’t subject to any road tax at all or the additional tax from year two for vehicles costing over £40,000.

You can learn more about how this affects different vehicles' tax rates online on GOV.uk.

Benefit in Kind (BiK)

Benefit in Kind tax (AKA company car tax) is significantly reduced for hybrid and electric vehicles. Employees who have a company vehicle made available to them are exempt from the registration and road tax (VED) but Benefit in Kind tax is deducted at the source.

Company vehicles are taxed depending on several factors, including one's income tax bracket, a vehicle's taxable value (or P11D – see GOV.UK's page on how to "Calculate tax on employees' company cars" for more info), the vehicle's powertrain, and its CO2 emissions.

Naturally, EVs have different powertrains that emit far fewer emissions and therefore this lowers the amount of BiK tax to be paid.

Maintenance

Over several years, an electric vehicle could help you make significant savings on scheduled servicing compared to a combustion engine vehicle.

This is because electric vehicles have fewer moving parts, so maintenance costs should be lower. Plus, most electric vehicles come with a longer battery warranty too.

A common myth about EVs seems to be the idea that batteries need replacing all the time. This is not true. Although batteries can be prematurely worn out, that might only happen if they have been charged incorrectly. Given the average length of time that vehicles are owned by 1 owner and how long that vehicle itself lasts, replacing an EV's battery is likely to be a rare event.

It is still a good idea when buying an EV to learn about the manufacturer’s policies, warranties, and best practice guidelines. Speak to our Bright Sparks staff for more information.

Parking

Some local authorities in Britain charge lower or no fees for on-street parking / residential parking permits for EVs, while some private parking operators also discount parking fees for EVs, so it is worth looking at the opportunities to save money wherever you stop on your travels.

Clean Air Zones, Low Emissions Zones, London's Congestion Charge & Cleaner Vehicle Discount

To help enhance local air quality, some local authorities and cities are introducing Clean Air Zones (CAZ). If your vehicle exceeds their emission standards, you may have to pay a charge if you drive in a Clean Air Zone. Cities with Clean Air Zones include Bath, Birmingham and Portsmouth, while Bradford, Bristol, Greater Manchester, Sheffield, Tyneside (Newcastle and Gateshead) and more will begin using Clean Air Zones from 2022 or 2023.

Clean Air Zones operate 24/7 throughout the year and fall into 4 classes, A to D.

A – Buses, coaches, taxis, private hire vehicles
B – Buses, coaches, taxis, private hire vehicles, heavy goods vehicles
C – Buses, coaches, taxis, private hire vehicles, heavy goods vehicles, vans, minibuses
D – Buses, coaches, taxis, private hire vehicles, heavy goods vehicles, vans, minibuses, and cars (plus the local authority has the option to include motorcycles)

Each vehicle type has a minimum emission standard. For vans, minibuses, taxis, private hire vehicles, and cars these are Euro 6 for diesel and Euro 4 for petrol.

You’re automatically entitled to a national exemption and do not have to pay a charge if you have a vehicle that’s an ultra-low emission vehicle, a disabled passenger tax class vehicle, or a disabled tax class vehicle.

You can check on the GOV.UK website whether you’ll need to pay a charge for a vehicle before you drive in a Clean Air Zone. If you’re a business, you can check and pay for multiple vehicles.

Low Emission Zones (LEZ) restrict access to an area by the most polluting vehicles. Low emission zones are in operation in London (which has both a Low Emission Zone and an Ultra Low Emission Zone), Bath, Birmingham, Glasgow, Manchester, Newcastle, and Aberdeen. More cities (including Dundee, Edinburgh and Sheffield). Their aim is to encourage people to use public transport or vehicles with low or no emissions.

For example, London's Low Emission Zone covers most of Greater London and is in operation 24/7 throughout the year to encourage the most polluting heavy diesel vehicles driving in London to become cleaner. To check whether your vehicle meets the emissions and safety standards required to drive in London's LEZ or if you need to pay a daily charge, visit Transport For London's website.

London's Ultra Low Emission Zone covers all areas within its North and South Circular Roads. It too is in operation 24/7 throughout the year to improve the English capital's air quality. Most vehicles need to meet the ULEZ's emissions standards or else a £12.50 daily charge must be paid to drive in the zone. To check whether your vehicle meets the emissions and safety standards required to drive in London's ULEZ or if you need to pay a daily charge, visit Transport For London's website.

The Congestion Charge is a £15 daily charge if you drive within London's Congestion Charge zone from 7am to 6pm Mondays to Fridays and 12pm to 6pm Saturdays to Sundays and bank holidays (no charge between Christmas Day and New Year's Day bank holiday). However, until 25th December 2025, battery electric vehicles (all-electric vehicles only – not plug-in hybrid vehicles) are eligible for the cleaner vehicle discount, formerly known as the Ultra Low Emission Discount (ULED). The discount reduces the charge to £10 per day. For more information or to apply for a discount visit Transport For London's website.

Grants

As well as finance methods, we will let you know if you can save even more money on a vehicle or a charger for your home or workplace!

The UK government's Office for Zero Emission Vehicles (OZEV) offers grants that can help individuals and businesses purchase an electric vehicle or install charging points.

Although the government ended the £1,500 Plug-In Car Grant (PICG) in June 2022, the Plug-In Van Grant (PIVG) was extended by two years from March 2022.

Large vans (2.5-4.25t) that are eligible for the Plug-In Van Grant include the New All-Electric Ford E-Transit Leader and New All-Electric E-Transit Trend. The grant will pay for 35% of the price for these vehicles, up to a maximum of £5,000. You can claim a total of 1,000 PIVGs for your business or organisation every 12 months from 1st April. You do not need to apply for the grant – we'll take care of it all for you!

OZEV currently offers several grants to help you save money on EV charging points:

• EV Chargepoint Grant
  Although this scheme has ended for homeowners and mortgagors who live in single-unit properties (such as bungalows and detached, semi-detached, or terraced housing), it's still available to eligible homeowners who live in flats and people in rental accommodation (flats and single-use properties).
  
  The scheme is a grant that provides a 75% contribution to the cost of 1 chargepoint plus its installation. A cap is set at £350 (incl. VAT) for each installation. The main requirement is that a person owns, leases, or has ordered an eligible vehicle and has dedicated off-street parking at their property. A person may apply for 2 chargepoints at the same property if they have 2 qualifying vehicles. To claim, you'll need to arrange for an approved charger and installer to carry out the work
  
  For more information, visit GOV.UK by tapping here.
  
  
  
• Workplace Charging Scheme (WCS)
  This is a voucher-based scheme to help businesses with the upfront cost of charger installation. It can cover up to 75% of the cost and a maximum of £350 for each socket (up to 40 sockets).
  
  Here are three main points to consider when applying for the WCS:
  1) Your business has to have a Companies House Reference Number
  2) You must own the business premises or have the landlord's permission to install chargers
  3) You must use an authorised EV charger installer
  
  For more information, visit GOV.UK by tapping here.
  
  
  
• On-Street Residential Chargepoint Scheme (ORCS)
  This scheme supports local authorities looking to install on-street residential car chargers. Run by the Energy Saving Trust (EST) for OLEV, this is good news for those who do not have off-street parking. The scheme has an allocated pot of money available for local authorities on a first-come, first-served basis.
  
  For more information, visit GOV.UK by tapping here.