A green driving machine can be huge cost-cutter
Lure of electric or hybrid cars stronger than ever – City drivers fed up of fuel prices can save thousands
Simon Read is Personal Finance Editor at The Independent. He edits the Saturday Your Money section and writes the Daily Money column and Wednesday’s Midweek Money section in i newspaper. He also writes for the news and business pages of the Independent and i newspaper and is a regular money commentator on TV station London Live. He has won numerous awards including Consumer Finance Journalist of the Year.
Saturday 21 April 2012
Families are now spending more money on petrol than the weekly food shop. The AA reported this week that pump prices hit a record high of 142.48p a litre for petrol, while diesel hovers around a peak of 147.88p a litre.
The figures mean filling up a 50-litre family car now costs around £71.24, the AA said. That tops the average weekly food bill of £70.10. Meanwhile families with two cars have to stump up £22 more to fill them both up than they did at the beginning of the year.
With petrol costs soaring, the search for ways to cut motoring costs is becoming crucial. So there was heartening news in the Society of MotorManufacturers and Traders annual New Car CO2 report published this week.
The statistics revealed that new cars are more fuel-efficient and environmentally-friendly than ever before. But crucially for the cost-conscious, that means that they are also more cost-effective than older vehicles.
The Society's survey revealed that new vehicles are actually 18 per cent more fuel-efficient than the average car being run in Britain today. And that means major fuel savings can be made.
The report also confirmed the green credentials of new motors over older vehicles, which is crucial to the planet's long-term well-being. It showed that the average carbon dioxide emissions of cars registered last year were 23 per cent lower than in 2000.
Interestingly, diesel-fuelled vehicles now account for more than half of all new cars registered in the UK. But while the cheapest wheels to run – electric cars – achieved record market share in the UK last year, at 1.3 per cent of the market, it's still a negligible amount.
The reduction in running costs of an electric car are astounding. An SMMT report on electric cars published in the autumn, calculated that the average cost of fuel for a medium-sized diesel car travelling 30,000 miles in three years would total £3,374. The cost of electricity for a similarly-sized electric car covering the same distance over the same time period? Just £881.
Free or subsidised parking also increases the savings made by driving an electric car, while Londoners would benefit from not having to pay the Capital's Congestion Charge, which could amount to a saving of £2,278 a year.
There are other financial inducements such as the 25 per cent subsidy towards the cost of an eligible electric car, up to a value of £5,000, through the Plug-In Car Grant. But, of course, there remain several drawbacks to electric vehicles.
Not least is the problem of having to charge up the car and the fact that the charge will only last up to a certain number of miles, up to 100, depending on the vehicle. It limits their practical use for many motorists.
The Government-backed Plugged-In Places scheme will see around 9,000 charge points in place across the country by March next year. That network will increase the prospects of being able to travel greater distances in an electric car.
But that doesn't get over the problem of battery charging time. Typically, electric cars take between six and eight hours to charge fully. However some electric vehicles can use rapid charge points, where they can be charged in half an hour.
But rather than the cheap-to-run pure electric cars, hybrids are more likely to make an impact for drivers in the short term. Plug-in hybrids revert to using diesel when the battery range is reached. But with the range topping 10 miles, they can be perfect for environmentally and cash-conscious City drivers.
In fact the average individual journey length in the UK is currently 8.6 miles, well within the range of a plug-in hybrid.
With electric cars and hybrids currently more expensive than traditional petrol or diesel vehicles, the initial cost of buying a greener vehicle can also put people off. But with the cars using expensive lithium batteries which typically account for 25 per cent of the cost of a vehicle, there has been little that motor manufacturers can do to cut prices.
But there was positive news this week in the Bloomberg New Energy Finance Report. It revealed that battery prices fell 14 per cent in the first three months of this year. Further price falls, and the greenest and cheapest-to-run cars may yet prove a good buy.
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