The impact of rising energy prices on drivers

Rivervale Leasing reveals the smart way to keep motoring costs down.

At a time when 66 per cent of British adults say the cost of living has risen for them in just the past month, rising energy prices are now a growing worry for more and more households. Of those who have been impacted by rising prices, 79 per cent blame hikes in gas and electricity bills. 

So, what’s in store for winter and how will inflation impact drivers?

The first thing to remember is that energy price caps are set by government regulator Ofgem. It aims to ensure fair pricing for gas and electricity. New Prime Minister Liz Truss has announced that UK households will now pay up to an average £2,500 a year on their energy bill. Currently, no provider is offering any cheaper deals – so there is no way around higher bills. We believe this will have an impact on drivers.

Is owning an EV still financially smarter?

We can’t ignore the fact that EV charging costs will increase. However, charging your EV will still be considerably cheaper than filling your car with fuel. Petrol and diesel prices are also at an eight-year price high. The cost of unleaded petrol in August 2021 was £1.35.4. In 2022 it averaged £1.86 per litre – a 27.4 percent increase.

The differentiation is highlighted in this example – the Hyundai IONIQ EV has a range of 193 miles (310.6 km) and currently has a cost of circa 3p per mile to charge. If you add the October 80 per cent energy price increase to this figure, it will increase to 54p per mile. A full charge could cost around *£10.42. In contrast, a similarly priced hatchback, the BMW 1 Series (petrol engine) gets 49.6 miles per gallon. If you wanted to fill this up from empty to achieve 193 miles, at an average fuel cost of *£1.86, then it would cost around *£32.86. So, even with an upcoming price hike, an EV is still much cheaper to run.

*The energy and fuel prices estimated at the time of writing, are subject to change.

EV drivers can also benefit from charging EVs at home or a private business. This is because they pay 5 percent VAT, rather than the 20 percent operator margin for charging at public points.

And, of course, this money saving is only one of the benefits of going electric. Soon the government will rule out the sale of new petrol or diesel vehicles, so the cheaper costs are incentivising people to get ahead of the curve and make the switch now.

What about leasing an EV?

If you are worried about the upfront cost of an EV, why not consider leasing? It is often the cheapest way to get behind the wheel of a new electric car. With typically lower fixed monthly payments than other forms of finance, such as PCP, leasing makes more unaffordable cars affordable. It also allows you to cycle through new vehicles as they appear on the market. Naturally, over time, these cars will also be more economical with energy consumption, have larger batteries and even faster charging times.

Interested?

Contact Rivervale on 01273433480 to discuss EV leasing.