The cost of living crisis is hitting hard, but for those that are switching to electric cars can be safe in the knowledge that there are some benefits that can save them money.
Pure battery electric vehicles are currently totally exempt from vehicle excise duty. That saves £10 to £2,365 in the first year for a petrol or diesel car, when VED is determined by CO2 emissions, and £165 a year for a conventional petrol or diesel cars after that. If your car has a list price of more than £40,000, you also do not pay the extra £355 for the following five years.
Nor do you pay London Congestion Charge or clean-air zone fees that other cities are introducing.
Company car drivers’ personal benefit-in-kind (BIK) tax rate in the 2022-23 financial year is just 2%, rising to 3% next financial year and 4% the one after. A typical petrol or diesel company car is 25 to 37%.
Electric cars with zero CO2 emissions qualify for first year allowances so businesses can deduct the full cost from pre-tax profits. A £40,000 electric car is worth £7,600 in tax relief. No wonder so many business drivers are switching to pure electric power.
Electric cars are simpler to service, with no combustion engine and fewer moving parts. Maintenance intervals are comparable to petrol and diesel but they tend to cost less.
EV battery technology is now much better, and worries about battery life have diminished, so depreciation on EVs is now similar to combustion models. You pay more for an EV but the latest models will be worth more when time to change them. Leasing and PCPs are attractive for financing EVs and spread depreciation costs.
And there is another reason for going green – the feelgood factor of doing your bit for the environment.
The road to going green is weighing up the short-term costs against the long-term savings for you, your business and the environment.
Why not talk to our friendly advisors at Credo Eco Finance who can help with the figures and talk to you about the choices available to you.
Find out how we can help you – call 01603 381955 or email [email protected]
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