Australian motorists could save thousands of dollars on running costs and loan repayments by making their next car purchase electric.
So says Compare the Market’s new research.
The insurance comparison site crunched the numbers and found that EV owners in Sydney and Brisbane spent $897-$1536 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% lower than estimates for the petrol car included in the study.
The arrival of cheaper models meant owning an EV was now a more cost-effective choice, says Compare the Market’s economic director David Koch.
“If you’re tossing between a petrol, hybrid, or electric vehicle for the next family car, our research shows that EVs are not only the greener choice, but the more economical option too,” he says.
“There’s a misconception that EVs are more expensive to run.
“While this may be true in some aspects such as comprehensive car insurance costs, significant savings in fuel and loan repayments do more than offset these expenses.”
Compare the Market found that regular drivers could save more than $1000 just on fuel annually when they charge their EVs at home overnight.
Car loans also provided a big opportunity for savings.
“Even with a slightly higher drive-away purchase price for the electric BYD – just less than $2000 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,” says Compare the Market.
“Lenders are rewarding customers who make greener choices,” says Koch.
“We found the difference between regular rates and ‘green rates’ could be up to 2.47% – depending on the cost of your car that could mean hundreds of dollars a year.”
In spite of savings across most regular expenses, EVs remain more expensive to insure because they use different technology and usually require specialist expertise for repairs, Compare the Market says.
Its experts found a $563 difference between average comprehensive cover costs in Brisbane and a $591 gap between average costs in Sydney.
Koch expects EV insurance costs to reduce in future, but he says insurers can do more to encourage uptake in the meantime.
“If we really want to see more electric vehicles embraced in the years ahead, we need governments and companies to introduce further policies that makes them the preferred option.
“Just like banks and lenders have started offering green loans, it would be great to see insurers adopt some green discounts for electric car premiums.”
Prices were calculated as of April 10, 2024, and are subject to change, says Compare the Market.
