Electric vehicles are becoming “more affordable than ever” with just a £32 per month gap between petrol and electric models, according to experts. New analysis has found that the monthly gap between Internal Combustion Vehicles (ICE) and electric models is less than ever before, which could draw in consumers.
It comes after PCP prices have dropped by over 10% compared to figures offered to customers last year. Upfront costs of electric vehicles remain high with the cheapest models still way above £20,000. However, experts are claiming that RRP prices are “meaningless” with most securing their vehicles on finance or under some kind of monthly deal.
Those who do buy their electric cars upfront also benefit from huge discounts at forecourts in a bid to boost sales. Pat Hoy, founder of Insider Car Deals said: “RRP is meaningless, no one actually pays it.
“Our transaction price data shows the real story: the median discount on petrol and diesel cars is already over 10%(£4,134), and on EVs it’s nearly 12% (£5,840).
“On PCP, the monthly gap between ICE and EVs has narrowed to just £32, and when you look at total cost of a PCP – including the balloon payment – ICE models still end up around 5% (£2,391) above RRP, while EVs come in almost 5% (£2,960) below.”
Personal Contract Purchase (PCP) is the UK’s most popular method of buying new vehicles in the UK. More than 80% of all new cars sold in the UK, as well as many second-hand vehicles, are financed by PCP.
Motorists pay a deposit as well as a number of monthly payments between 18 and 48 months. After the contract is over, motorists will then usually pay a final payment and get to keep the vehicle.
Steve Fowler, Founder of Carblah, stressed that PCP fees are now £55 a month less than 12 months ago.
He explained: “Recommended retail prices are yesterday’s news. What matters most to car buyers is what they pay each month and when it comes to finance deals, EVs have more incentives and lower rate finance making them more affordable than ever.
“The Independent EV Price Index has shown that PCP costs for a typical electric car have dropped by £55 a month or 10.8% compared with a year ago, while the average APR charged on an EV PCP finance deal is 3.5% versus 6.6% for a petrol or diesel model.”