Electric car charging

Electric car finance

Zuto can help you find electric car finance. As a broker, we work with a panel of lenders who understand the ins and outs of electric car ownership.

Zuto is a credit broker, not a lender. Our rates start from 9.9% APR. The rate you are offered will depend on your individual circumstances. Representative Example: Borrowing £7,000 over 48 months with a representative APR of 19.3%, the amount payable would be £205 a month, with a total cost of credit of £2,831 and a total amount payable of £9,831.

What you need to know about electric car finance

Every year, manufacturers add more electric cars to their product line-ups – and as the new market’s growing, so is the one for used electric cars.

It’s all part of a big push ahead of 2030, when you’ll no longer be able to buy a brand-new petrol or diesel car in the UK. Electric car registrations are more than doubling every year – Zuto’s partner AutoTrader predicts we’ll be buying more EVs than diesel and petrol by 2025.

The huge growth in new models means we’re now seeing an increase in used electric cars, meaning more choice for different budgets.

Zuto can help you find electric car finance that’s right for you. As a broker, we work with a panel of lenders who understand the ins and outs of electric car ownership.

Electric car finance vs a normal car loan

You can pay for an electric car on finance, just as you can a traditional car. There are three main types, as with standard petrol, diesel or hybrid – Hire Purchase (HP), Personal Contract Purchase (PCP) and personal loans. But there are some differences:

  • Some lenders will only finance the vehicle. In these instances, the deal doesn’t include the battery and you would have to lease it separately.
  • Electric cars are usually more expensive to buy than petrol and diesel and you might also want to have a charging point fitted.
  • In the long term, you’re likely to save money, with less to pay on vehicle tax and running costs. Although you’ll spend more on electricity, it’ll be less than you’d pay in diesel or petrol.

What should I consider when it comes to the battery?

An electric car’s battery might not be included in its price, so you might have to lease it. The difference in the prices of cars with and without batteries can be large, so it’s best to be sure before you commit.

Although it’s different to what we’re used to with car ownership, it can be useful – if the battery’s efficiency drops below a set level, it’ll be replaced.

What you need to check when buying a used electric car

The basics are still the same for buying an electric car as they are for a petrol or diesel car, but it’s worth thinking about the following for an EV:

  • Find the right car for you – an electric car needs to meet your requirements, so think about the size, whether you like the brand and look at what owners are saying.
  • Battery range – this is the number of miles an electric car can travel on a single charge. It’s improved in recent years but, for those with a long commute, it might be reassuring to find a model with more range – newer models tend to be able to go further.
  • Charging cables – you’ll need these to connect your car to charging points. Make sure the cables are included and in good working order.
  • Charging points – it’s worth looking into installing a charger at home. If you can’t install one or aren’t ready, check where your nearest charging points are and ask your workplace if they have any, or might be planning to add them in the future.
  • Compatibility – if you are going to be using public charging, ensure you buy an EV compatible with rapid charging. It can top batteries to 80% capacity within 30 minutes. Whether the EV you want is compatible depends on its maximum charging capacity and it also needs to accept a Type 2 connector.
  • Service history – a full service history should show you whether the car’s had its software updates. Battery life and its deterioration rate will also be examined.

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Why buy an electric car?

It’s a great time to go electric. EVs are becoming cheaper and there’s an ever-increasing range to choose from. And of course, there are the obvious reasons – it’s good for the environment and they’re fun to drive.

Here’s some more information to be aware of.

  • Range – early all-electric cars had limited range, but still typically more than 100 miles. However, according to the government’s 2019 National Travel Survey, the average UK car journey is just 8.4 miles.
  • Component costs – in addition to the usual maintenance checks on brakes and tyres etc, there are new considerations with EVs. High-voltage relay banks and power-steering pumps also need checking.
  • Environmental benefits – fully electric cars emit no greenhouse gasses, cutting local emissions. The source of electricity remains a challenge, as it isn’t completely green in the UK – more than half comes from carbon-neutral sources (nuclear, wind, solar, hydro and other renewables).
  • Economic benefits – the cost of running an electric car is much less than it is for petrol and diesel cars – even though the latter might be cheaper to buy at first. Tax incentives, government grants and cheaper per-mile energy means you could pay less in the long-term.
  • Driving experience – one of the first things you’ll notice if you take an EV for a test drive is how quiet and smooth it is. They can also be surprisingly quick – even modest hatchbacks can do 0-62mph comfortably under 10 seconds.
  • Reliability – The team at Zuto conducted some research on how electric and hybrid cars hold up in their MOTs and the answer was pretty well. Our team crunched official UK government data from more than 1.7million MOT tests between January 2016 and May 2021 with the top 30 vehicles all achieving a pass rate of 84% or higher. Read more in our electric and hybrid MOT pass rate study.

How much is a used electric car?

Used electric cars are getting more and more affordable. Here are some examples of what’s available, starting with one of the earliest all-electric cars, the Nissan Leaf.

Finance costs are just an estimate, based on a three-year Hire Purchase agreement, a 10% deposit and a good credit score.

2010 Nissan Leaf

Estimated price = £3,500

Approximate monthly finance cost = £108 (includes £350 deposit)

2013 BMW i3

Estimated price = £7,500

Approximate monthly finance cost = £231 (includes £750 deposit)

2013 Tesla Model S 85kWh

Estimated price = £22,000

Approximate monthly finance cost = £677 (includes £2,200 deposit)

Example running costs

We’ve compared how much a used electric car can cost compared to a diesel-engined vehicle. The Nissan Leaf is one of the most popular EVs on AutoTrader at the moment, and the Golf remains one of the UK’s top-selling cars.

Rather than the cheapest cars on the market, we’ve chosen ones in a really competitive area – almost £8,000 to buy outright, with around 50,000 miles on the clock.

We’ve excluded MOT, tyres and consumables.

 

Used Nissan Leaf £7,950

Finance repayments = £232.14

Insurance per month = £22.04

Tax = £0

Dealer servicing - divided by 12 (actual cost in brackets) = £13.25 (£159)

Cost in fuel/energy (20 miles per day) = £24

 

Monthly total = £350.72

 

 

Used VW Golf 1.6 TDI BlueMotion Hatchback £7,995

Finance repayments = £253.76

Insurance per month = £22.31

Tax = £0

Dealer servicing - divided by 12 (actual cost in brackets) = £15.33 (£184)

Cost in fuel/energy (20 miles per day) = £49.04 (based on combined 74.3mpg)

Monthly total = £427.13

 

Estimated costs from real-world examples: a 2015 VW Golf 1.6 TDI BlueMotion Tech (s/s) 5dr with 74,500 miles, on the market at £7,795 and a 2015 Nissan Leaf Tekna with 42,559 miles, on the market at £7,950. Prices correct as of July 2021.

Insurance estimates based on a 42-year-old male driver with 9 years' no claims and living in a low-risk area.

The Leaf works out at an estimated £76.41 cheaper per month than the Golf.

Of course, cheaper versions of both cars are available, and money can be saved through servicing and insurance – but for day-to-day driving? Electric is simply much cheaper.

Fully electric cars are currently exempt from car tax (Vehicle Excise Duty, VED) and the benefit-in-kind (BiK) tax rate for vehicles is also 0%.

It’s also worth noting that cars registered between 1 March 2001 and 31 March 2017 have different tax rates to those built before or after, which is why the Golf in our example (emitting 99g/km CO2) pays no tax – but the identical car registered today would pay £160 a year.

How to buy a used electric car on finance

Now you know more about electric cars and the differences between EVs and traditional vehicles. If you’d like to buy a used one on finance, it’s easy with Zuto.

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    Apply online or call us

    We need some details from you such as your address and how much you're looking to borrow. This should only take a couple of minutes and you’ll receive a decision within 60 seconds.

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    Get approved and discuss quotes

    We’ll carry out a soft credit check, which won’t affect your credit score. If approved with one of our lenders, we will call you to discuss the quotes and any next steps. 

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    Find your perfect electric car

    If you're happy with the quotes provided, all that's left to do is to find you the perfect electric car and drive away happy.

FAQs

Do I need to finance the car and battery separately?

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Some lenders will only finance the car and you will have to lease the battery separately. It’s another monthly cost to consider when you budget before committing. But if your battery becomes faulty, most manufacturers will it replace free of charge.

What happens if the battery’s lease runs out before the car loan?

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It’s recommended you lease the battery for the same term as the loan itself. The benefits of leasing the battery is if something goes wrong, or the battery life reduces, you should be covered for a replacement through the leasing company.

What grants are available for buying an electric car?

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There are no grants for used electric cars.

A government plug-in grant is available for buying a new EV. To be eligible, the car must cost less than £35,000. This is the recommended retail price and includes VAT and delivery fees. The grant will pay for 35% of the purchase price, up to a maximum of £2,500.

Do electric car batteries need a refurb?

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Electric car batteries typically last eight to 10 years. Refurbished replacements cost around £2,500 and new ones are around £5,000.

Do electric car batteries go flat quicker in winter?

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The latest EV batteries are less susceptible to cold weather and battery range is much-improved. It’s unlikely to be an issue in the UK.

What happens if the range drops and I need to buy a car during the agreement?

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If you finance the car through HP, you would have to sell the car and pay off the current finance agreement with the money you have sold it for. If this leaves you in negative equity, you may have to add money to it, or account for it in your next finance agreement.

If you finance an EV through PCP, you need to be at least half-way through your agreement to do a voluntary termination.

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