Electric car owners spend over £350 a year less to run their vehicles than drivers of petrol models, according to a new report - but only if they're able to charge their EVs at home.

Analysis of average running costs, including insurance premiums, tax and fuel - or charging - bills, shows the average EV owner spends £1,351 per year, while the driver of a conventional unleaded car forks out £1,720.

The report comes in the wake of industry sales figures showing that electric car registrations hit record new heights in September, with 72,779 entering the road as motorists took advantage of the Government's new EV grant, which shaves between £1,500 and £3,750 off the price of some models.

But while the study - conducted by Compare the Market - highlights the potential benefits of running an electric car, not every driver will see the full financial reward if they make the switch.

This is because the charging figures are calculated using domestic electricity prices using a wallbox installed at home.

While this represents the scenario for nine in ten EV drivers in Britain today, drivers living in flats, terraced houses and homes without off-street parking currently face public charging costs between two and three times higher.

As such, the financial reward of switching to an EV is instantly diluted.

And while a major change introduced by the Chancellor has pushed the ownership cost of EVs higher in 2025, the study omits one running cost where battery cars are significantly more frugal. 

Electric VS petrol car running costs

Based on its own data, Compare the Market calculated that the average car insurance premium for EVs has fallen by £176 year-on-year, decreasing to £660 in June 2025 from £836 in the same month last year.

That said, premiums for combustion models have declined in the last 12 months too, with the average petrol car policy now at £625 compared to £816 a year ago, putting an extra £191 in the pockets of drivers.

But while insurance premiums for EVs are on the decline, the cost to charge them is increasing.

Using average electricity pricing, the comparison site says it costs the average EV driver with a wallbox £441 in charging to cover an annual mileage of 6,000 miles.

This is a £41 increase on a year ago following the recent jump in energy prices.

In contrast, fuel prices have moved in the opposite direction, with the average price per litre in June 2024 sitting at around 1.45p a litre, while this year declined to £1.31. That said, prices have increased gradually to 1.35p per litre this month.

Based on a 6,000 mile average and a return of 52mpg, petrol car drivers have seen their annual fuel bills fall from £933 last year to £845 in 2025.

While this suggests EV owners are paying around half to recharge their cars compared to petrol drivers filling up at forecourts, those without off-street parking are paying at least twice the amount to use the public network.

According to the AA, the average cost to use even a slow pubic EV charger is more than double that of plugging in at home.

And for those using the fastest rapid and ultra rapid public devices, this is three times higher.

As such, the financial reward of EV ownership is only felt by drivers with driveways and garages - and will be almost entirely wiped out for those who have to always use a public device.

With approximately 35 per cent of UK households (or 9.7 million out of 27.6 million households) having no off-street parking - according to 2021 data from the RAC Foundation - it's no surprise that the vast majority of drivers in Britain who have already made the switch have the facility to charge at home.

According to the Department for Transport's EV Driver Tracker report, nine in ten (91 per cent) current electric car owners in the UK have access to charging at home; and three quarters of them have a dedicated wallbox installed.

The EV running cost on the rise

While EVs and combustion cars are subject to the same MOT test costs, capped at £54.85 in the UK, there is one running cost that has stung EV drivers in recent months.

In April, Rachel Reeves rung in the introduction of Vehicle Excise Duty (VED) - or car tax - for EVs.

As such, the standard VED rate for an existing electric car is now £195 - on par with a combustion engine model. 

This has seen the total cost of ownership benefit of EVs - calculated by the comparison site - decline from £703 per year in 2024 to just £369 this year.

Sam Wilson, expert at Compare the Market, said: 'EV drivers will be pleased to know that EVs remain more affordable to run than petrol cars on average. 

'Alongside lower upfront costs, motorists driving certain EV models included in the Government’s new ECG scheme could also benefit from the lower insurance premiums typically associated with EVs, further reducing annual running costs. 

'As average insurance premiums fall for EVs more broadly, comparing policies online ahead of renewal could be one of the easiest ways for motorists to make savings.'

However, one major running cost that's been overlooked in the study is servicing.

While drivers are not legally obliged to have their vehicle serviced - though it would invalidate any warranty they have on the car and reduce its value if they fail to have it serviced within the manufacturer-recommended intervals - there is a huge difference in costs for petrol cars and EVs.

While all combustion engine models typically have a minimum one-year or 12,000-mile (whichever comes first) service interval, most EVs only need to be serviced once every two years. 

This is the case for most mainstream brands, including BMW, Citroen and Mercedes-Benz.

And with fewer mechanical parts to check, EVs are typically much cheaper to service.

Taking this into account, the financial gap between electric and petrol cars leans more in favour of EVs.