Do the financials behind buying an electric vehicle really stack up?

- May 17, 2024 2 MIN READ
EV financials - do they stack up

Australian motorists could save thousands of dollars on running costs and loan repayments by making their next car purchase electric.

According to new research from Compare the Market (where I am Economic Director), EV owners in Sydney and Brisbane spent between $897 – $1,536 less a year on car running costs compared to petrol car owners. 

The research compared the popular electric BYD Atto 3 with the petrol Toyota Corolla Cross small SUV across a range of regular expenses, including fuel and charging costs, registration, servicing, insurance and loan repayments.

As a percentage, estimated running costs for the EV were between 5.4 – 9.3 per cent lower than estimates for the petrol car included in this study.

Source: Compare the Market

Source: Compare the Market

Cheaper models mean EVs are more cost-effective

The arrival of cheaper models has meant owning an EV is now a more cost-effective choice.

If you’re tossing up between a petrol, hybrid, or EV for the next family car, the research shows that EVs are not only the greener choice, but the more economical option too.

There seems to be a misconception that EVs are more expensive to run. While this may be true in some respects (such as comprehensive car insurance costs), significant savings in fuel and loan repayments do more than offset these expenses.

Regular drivers could save over $1,000 just on fuel annually when they charge their EVs at home overnight.

The next big area for saving was on car loans. Even with a slightly higher drive-away purchase price for the electric BYD – just under $2,000 more than the petrol-powered Toyota – loan repayments on the Atto 3 turned out to be cheaper due to the discounted rates available for green loans.

Lenders are rewarding customers who make greener choices. The difference between regular rates and ‘green rates’ could be up to 2.47 per cent, so depending on the cost of your car that could mean hundreds of dollars a year.

Still more expensive to insure

Despite savings across most regular expenses, EVs do remain more expensive to insure because they use different technology and usually require specialist expertise for repairs.

The Compare the Market experts found a $563 difference between average comprehensive cover costs in Brisbane and a $591 gap between average costs in Sydney.

The best way to ensure you’re getting a good deal is to compare. No matter if it’s the fuel that you put in your car or the electricity plan you’re on to charge your EV, there are options out there.

Get Kochie’s weekly newsletter delivered straight to your inbox! Follow Your Money & Your Life on FacebookTwitter and Instagram.

Read this next:

4 small lifestyle changes that will save you big money