Thinking of getting an EV

[danlightbulb]

I didn't think this was affordable for me, by a long way, but after considering things, maybe it could be.

I currently run a 2005 BMW 325i on 120k miles. Bought it 2 years ago for £3500 when my previous car lunched it's engine. I spent £1000 on getting gaskets replaced and the gearbox serviced. Then at MOT time it needed 4 new tyres.

I spend £50 per month on insurance and tax is £35. I budget £20 per month for MOT and service. That's about £105 a month.

I do around 12k miles a year and spend around £200-£250 per month on petrol getting around low 30s MPG.

I could get a Peugeot 308 estate or a MG5 estate (both EV) on the work salary sacrifice scheme for around £425 - £450 per month. That includes everything, insurance, road tax, servicing, an allowance for tyres. No deposit.

After I take off my current running costs I'm left with a net cost of around £320.

If I then calculate petrol savings from switching to electric charging this could be another £100 -£125 a month bringing my total cost down to around £200.

£200 a month I could live with. It's about the same outlay as a £10k personal loan.

I'd appreciate any thoughts on my options here. Does this sound reasonable in terms of expectations? Have I missed anything?

 

[danlightbulb]

Do you plan to charge regularly at home or at rapid chargers. There is a higher difference is cost calculation if you don't charge at home regularly

have a read of this thread it contains most of what you need

When are you going fully electric?

In my experience there are chargers everywhere, they just aren’t necessarily where you expect them like in the corner of a car park of a random retail park or where you want them like at a hotel. In my experience, when I’m away from home and on the public network, I charge when I have the...

forums.overclockers.co.uk

Yes almost all charging would be at home and I could look at what tariffs are available on octopus for cheaper overnight rates.

You aren't going to save money with a new EV vs old diesel/petrol. It's still costing way more to actually buy the car, plus depreciation.

Most EVs are fleet cars. If someone is giving you a car to use it makes sense, no petrol cost. But buying one is a different matter.

No i know I won't save money. But if considering no big maintenance bills and a new EV vs a 10 year old petrol/diesel for the £10k equivalent, it feels like the better option?

 

[danlightbulb]

The thing is that, as discussed on here many times, even £10k now doesn't get you a very new good quality car. I'm still looking a ten year old 100k milers for that money.

I wasn't considering a new car because I didn't think I could afford it. But the EV gives me petrol savings, which spending on a new petrol car would not. So it brings the net cost of changing down quite considerably.

 

[danlightbulb]

buy an EV outright that has hemorrhaged a chunk of cash in depreciation

I can't find £20-£30k up front to do this option.

A loan of that amount would be a) hard to get and b) around £4-500 a month.

you comparing like for like as you talk about 'good quality car' but do you actually mean a premium brand? Because a quick look on AT shows that 10k can get you into something much younger than 10 years old and much less than 100k on the clock.

Every time I look on AT I don't find anything decent. Not necessarily premium but I need something that will be a nice cruiser, as I do 50 miles a day on the motorway for my commute. I also need something of a mid to large size due to outdoor activities. The car I own now is the first auto I've had and it's great so I definitely want auto.

The thing is that anything I buy for my £10k will still have the failure risk. A new EV on contract hire will be completely maintenance risk free.

Is that worth £200 a month? Don't know. How close does it have to get before its the optimum choice, £100? £50? £20?

Salary sacrifice is great on paper but it's just a tax efficient ticket to the neverending car finance merry go round.

Yeah I get that. If I buy a car outright with a loan then it's mine and paid for after 5 years. If it wasn't for the salary sacrifice saving there is no way I could afford it. That £200 per month is the magic number for me where I consider it affordable. It's what the £10k loan would cost as well so I can directly compare a £10k loan to buy a car with the contract hire option.

The thing is I could buy a car with that £10k and the next day the engine blows up. I'm not willing to risk that, hence why I buy older cars the last few times. But older cars are getting more expensive so there is more money at risk.

I know the £200 a month contract hire isn't the cheapest option long term but it's the lowest risk option in terms of car failure.

Personally I'd bank the £200 a month

Lets say I bank that £200 a month and in 6 months time my head gasket fails. That £1200 is then spent on the repair. What do I have for that? £1200 less and still an 18 year old car that could throw another bill the very next day.

At least if I spend that £200 on a new car via contract hire, yes I'm still £200 down but I'm driving a brand new car and carrying no failure risk at all.

 

[danlightbulb]

Are you running an E90 or E46? i think id rather spend time in an E90 than a MG5. It requires a bit of home work but sub 3k decent cars are out there, for example i went with a mate to collect a e220 cdi 2012 for 3k. High miles, but the major common problems had been addressed, new guides and chain, EGR and DPF sorted etc. That doesnt leave much else to go wrong.

I currently have an e91, 325i, auto.

I'm just looking on AT. Am I doing something wrong here? Because what I see for £10k automatic estates is 10-12 year old cars, generally diesels, already on or approaching 100k miles.

 

[danlightbulb]

You could literally buy a used EV and keep it charged for that much per month. I have an Ioniq 38kWh you can pick up a 2021 model for ~£10.5-11k. you'll get an average of about 4.5mpkWh all year round without trying, and on a good tariff from Octopus you'll be pay 7ppkWh or about 1.55ppm, or £186 per year for 12k miles.

Ok I just took a look on AT and you're right. It's knowing what you can get for what money, which I don't.

It's not an estate and the range isn't great with those smaller (older) batteries.

But yeah I could offset much of my fuel costs and would own the car outright. Still need the loan to buy it though.

Any other options similar? I could perhaps stretch the loan further (£15k?) if I'm saving on fuel.

 

[danlightbulb]

You could literally buy a used EV and keep it charged for that much per month. I have an Ioniq 38kWh you can pick up a 2021 model for ~£10.5-11k. you'll get an average of about 4.5mpkWh all year round without trying, and on a good tariff from Octopus you'll be pay 7ppkWh or about 1.55ppm, or £186 per year for 12k miles.

I just had to double take this. Are you saying that if I buy a 3 year old EV for £11k ish that it pays for itself in fuel savings alone?

If so that's a complete no brainer isn't it?

What's the risks buying a used EV? Warranty, repairs, servicing?

 

[danlightbulb]

Have you considered a personal lease on a used EV

Do you have an example of where to look for this option please? I'd not considered used EV at all, but if I can offset the cost of it through petrol savings that could be a really good option.

 

[danlightbulb]

If my calcs are right then at 3.8 miles per kWh, I will use about 3200 kWh per year which is £53 per month at 20p/kWh or only £19 a month if I can get 7p/kWh.

I currently spend between £200-£250 per month on petrol.

That saving alone immediately covers a £10k loan or £200 of any contract hire cost.


If I went for the work scheme, there is a further £100 saved from the included insurance, car tax, servicing costs.

I'm now down to only a £100 additional outlay for the work scheme.

I could easily spend £100 on repairs a month (on average) on this car.

Isn't this a no brainer to get the brand new car on the work scheme?

 

[danlightbulb]

It's your choice, there is no right or wrong but you seem to be approaching it from a financial stand point so the answer will rarely be finance, tax efficient or not.

Obviously finances are a major part of it (I have to be able to afford whatever option I choose), but I'm trying to approach it from a common sense perspective really.

If the annual cost of keeping an 18 year old petrol car going is not that much different from getting a brand new EV car, then even being locked into contract hire, it feels like the sensible option is to take a brand new car and no maintenance hassle.

Getting a brand new car was never an option before because I never saved enough on fuel to make it worth it. EV seems to change the game massively on that aspect. If I save 2/3rds of the cost of ownership just on fuel alone that is massive factor.

Is my maths right on the charging cost? I never thought charging an EV would be so much cheaper than buying petrol.

 

[danlightbulb]

Over 3 years that's ~£550/month at 7%, or ~£350 after taking off fuel costs, but after the 3 years, the car is still going to be worth maybe* £6k

Yeah this is really interesting optioneering now. As I said above, getting a brand new car was never an option for me, but now with this fuel saving it changes the game. I just never thought that the saving would be so big.

If the monthly cost of getting a brand new car on contract hire is only £100 different from keeping my current car (ignoring the chance of a big repair bill) then that loan above for a £17k car is £200 more expensive again, for 5 years or 60 months which is £12k over that time. £12k could pay for that contract hire car for 12 more years!

 

[danlightbulb]

Everything depends on being able to charge at home. If you had to charge elsewhere then there might not be any difference in fuel costs. Might even be more expensive. I assume you'd also budget for getting a charger installed.

Yes I think this would be about £500 to £800 depending on who I can find.

Can I even do the job myself? I would just have to run the right cable about 6m round the wall of the house and back to the consumer unit.

Then switch to an EV tariff.

The only time I'd have to charge away from home would be when I go on a longer trip on holiday or whatever. A couple times a year max.

 

[danlightbulb]

You're ignoring the fact that the £17k loan is only really an £11k loan (after you sell the car), so over the 3 years, you can knock £~167 off the monthly cost

I feel a spreadsheet coming. Got to get these figures down and properly considered.

 

[danlightbulb]

Benefit in Kid (or BIK) is worked out as a percentage of list price of the car. That's the tax you'll have to pay each year. On a £35k car in 27/28 tax year that'll be an extra £1750 on your tax bill. https://www.fleetnews.co.uk/fleet-faq/what-are-the-current-bik-bands-/3/

Damn that's ramping up quite fast isn't it...only 2% now but 5% in a few years time. That will add £120 to the monthly cost by year 4 of the contract.

 

[danlightbulb]

Here is essentially what Im looking at for my current car vs the salary sacrifice EV (in year 1 at least, I need to incorporate the future BIK increases).

if including my £100 a month repair buffer, its barely any more to get a brand new EV! That is crazy, I never realised until now that the sums would be this good.

 

[danlightbulb]

Ive found something odd going on with the figures.

The figures I was getting from the leasing site dont take account that my pension contributions are already salary sacrifice. I need to adjust for this manually which makes the car more expensive because the tax saving is less (I put everything I earn over the 40% bracket into my pension).

But I could then pull back my pension contribution a little, to help. As I currently put 15% so could pull it back to 12-13% or so to help fund the car.

 

[danlightbulb]

Is a car now worth less pension later in life?

It will only be a temporary adjustment to improve the affordability now. When we get an annual payrise next year I'll put that 2% back on.

This is my options currently. I can make the whole thing neutral if I drop my pension to 12%.

The BIK impact wasn't as a bad as I thought a few posts back. When the BIK goes to 5% that will be £1650 (5% of £33000 P11d value) but then the tax you pay on that is 20% of it, so £330 a year or £30 a month ish.

 

[danlightbulb]

It's always a balance. The EV numbers seem to be adding up for you.

Yeah Im absolutely shocked TBH. If I knew the sums added up like this I would have looked at it sooner. Its the petrol saving that makes it work, plus the tax saving as well.


The MG5 has good reviews but its a 26 week lead time. I like the Peugeot e-308 and has great reviews other than comments about it being a bit slow.

 

[danlightbulb]

Is my only option for viewing some of these cars to go round the main dealers?

I'd like to see the MG4, MG5, Hyundai Kona, Kia EV6 and Peugeot e-308 in person.

 

[danlightbulb]

I'd also consider tie in/get out options. If you are dipping your toes in to BEV for the first time, then buying a 21-plate car with plenty of warranty used, will allow you to get out with minimum loss as you'll be financing it with a personal loan, where as a SS scheme will give you a newer car but with an expensive get out should you need to use it.

So there is included cover for early termination of the agreement under certain circumstances including if I voluntarily leave the company.

There isn't cover for if the government decides to ramp up the BIK rates or change the tax rules, I don't think, I need to phone up to ask them this to confirm. So that's the biggest risk.