Put a three-year-old petrol Vauxhall Corsa next to the electric version, and most people would struggle to tell them apart. They have virtually the same body, the same number of seats, the same boot and much of the same equipment, and both will comfortably do the school run, the weekly shop and the daily commute.
However, over five years, choosing the electric Corsa through an EV Salary Sacrifice scheme could save a higher-rate taxpayer an amazing £9,000 compared with buying the petrol version.
That sounds like a big claim, but the reason is relatively simple.
Most people look at the price of buying a used petrol car without considering how much it will depreciate or what it will cost to operate. At the same time, they look at an EV lease price without allowing for the tax savings, inclusive services and the dramatically lower cost of charging at home.
Take a three-year-old petrol Vauxhall Corsa costing approximately £12,345. After another five years, when the car is eight years old, it might be worth around £5,500. The owner has therefore lost approximately £6,845 through depreciation.
That is only the beginning.
Drive 10,000 miles a year in the petrol Corsa at an average fuel cost of around 17p per mile, and you will spend £8,500 on petrol over five years. Add around £3,000 for insurance, another £3,000 for servicing, tyres, MOTs and repairs, and approximately £1,000 in road tax.
The total five-year cost is therefore approximately £22,345. This assumes the car was bought with cash, and if the driver has borrowed the money or used dealer finance, the interest would push the real cost even higher.
Now compare that with taking a three-year-old Corsa Electric through Salary Sacrifice.
CheapEV can provide the complete package for £350 per month before tax. Unlike buying a petrol car, this package includes the vehicle, insurance, servicing, maintenance, tyres, breakdown cover and road tax. The employee does not have to fund a large purchase upfront and does not carry the risk of the car’s value in five years.
For a higher-rate taxpayer receiving a total Salary Sacrifice saving of around 50%, the effective lease cost could be approximately £175 a month before allowing for the relatively small Benefit-in-Kind charge. Using an estimated net cost of £187 a month, the five-year lease payments would total £11,220.
Charging the car overnight at home and driving 10,000 miles could cost approximately £200 a year in electricity, or £1,000 over the five years. Even after allowing £1,000 to install a home charger, the complete five-year cost comes to approximately £13,220.
That is a massive saving of £9,125 compared with buying and operating the petrol version. So which idiots are still buying petrol cars? Oops, sorry, is that you?