Does the Electric Car Grant Make a New EV Cheaper Than a Used Petrol Car?
Short answer: no, and it was never meant to. The Electric Car Grant takes up to £3,750 off a new electric car priced at or under £37,000. It is a discount on a new car, competing with other new cars. Set against a used petrol car it does not come close, and the arithmetic is worth seeing because the gap is larger than most people expect.
The purchase gap
Take a new electric car at £30,000 — comfortably inside the grant's price cap. With the full band-one grant it costs £26,250.
The median asking price of a used petrol car on Autoza, measured on 20 September 2026, is £7,899.
So the gap to make up is £18,351.
What the running costs actually save
At 8,000 miles a year, charging at home on the capped electricity rate, against a petrol car returning 40mpg:
| Per mile | Per year | |
|---|---|---|
| Electric, charged at home | 7.52p | £602 |
| Petrol at 40mpg | 19.88p | £1,590 |
| Annual saving | £988 |
A real saving, and on a driveway it is the strongest argument electric cars have. But £988 a year against a £18,351 gap takes 19 years to break even on fuel alone.
And from April 2028 it gets longer
Electric cars will pay a mileage charge (eVED), 3p a mile at today's rate, alongside vehicle tax. It applies to cars already on the road, and each keeper starts paying when they first renew vehicle tax after April 2028; the rate then rises with CPI from 2029 to 2030. As an illustration at today's 3p rate and 8,000 miles a year, that is £240, which cuts the annual saving to £748 and pushes the break-even to 25 years.
Both cars pay standard vehicle tax, so that does not separate them.
Three things that make this comparison unfair — two flatter the EV, one understates it
It ignores depreciation, and that makes the gap worse. A new car loses far more value in its first three years than a car already several years old. Include it and the break-even stretches further, not closer. We have left it out because we hold asking prices rather than sale prices and will not estimate a depreciation curve we cannot measure.
It assumes home charging. On public rapid charging the electric car costs about 26.29p a mile, which is more than the petrol car at 19.88p. Without a driveway the saving does not exist at all and the comparison stops being close.
But you are not comparing like with like, and that favours the new car. A new electric car comes with a full warranty, no history to worry about, current safety equipment and no MOT for three years. A £7,899 used car comes with none of that. If those matter to you, they are worth real money that this arithmetic does not count.
So when is the grant worth having?
When you are buying a new car anyway. That is what it is for, and £3,750 off is £3,750 off. What it does not do is move the decision between a new electric car and a used petrol one, because that decision is dominated by a purchase gap the grant covers a fraction of.
It also does not apply to used electric cars at all — it is a new-car grant. And GOV.UK describes the scheme as subject to amendment or early closure, so anyone planning around it should check it still exists before committing.
Frequently Asked Questions
Does the Electric Car Grant make a new electric car cheaper than a used petrol car?
No, and it was never designed to. With the full £3,750 band-one grant, a new electric car at £30,000 comes down to £26,250. The median asking price of a used petrol car here is £7,899, so the gap left to make up is £18,351. The grant is a discount on a new car, competing with other new cars.
How long would it take to break even on running costs?
About 19 years at 8,000 miles a year, charging at home. The annual saving against a petrol car returning 40mpg is £988, set against a £18,351 purchase gap. From April 2028 electric cars also pay a mileage charge (starting at each keeper's first vehicle tax renewal after that date); at today's 3p a mile that cuts the saving to £748 a year and stretches the break-even to roughly 25 years.
Does this comparison include depreciation?
No, and leaving it out flatters the electric car rather than the petrol one. A new car loses far more value in its first three years than a car already several years old, so including depreciation would widen the gap rather than close it. We leave it out because we hold asking prices rather than sale prices, and we will not estimate a depreciation curve we cannot measure.
Where these numbers come from
Electricity is priced on the Ofgem price cap, Direct Debit, Great Britain average, 1 Oct 2026 to 31 Dec 2026 — excludes VAT (GB domestic electricity is zero-rated 1 Oct 2026 – 31 Mar 2027). Petrol is the UK average pump price for the week commencing 5 October 2026. The mileage charge is from the HMRC policy paper on Electric Vehicle Excise Duty, and the grant terms from GOV.UK. The used petrol figure is the median asking price of live petrol stock on this site, which is what sellers ask rather than what buyers pay.
Change any assumption and the answer changes — that is the point of showing them. Our EV versus petrol calculator lets you put your own mileage, efficiency and tariff in, and the electric car grant calculator works out what a specific new car comes down to.
