Young drivers are choosing to pay £16,000 more for electric vehicles (EVs) as a first car to take advantage of lower tax rates compared to petrol and diesel models. A recent survey by MoneySuperMarket found that 47% of young drivers prefer driving electric cars, with 32% willing to delay driving altogether to save for an EV. The decision comes as Vehicle Excise Duty (VED) rates increased in April, making petrol and diesel vehicles more expensive to tax while electric cars pay the lowest rate.
Key Findings
- 47% of young drivers want to drive an electric car
- 32% of under 25-year-olds would delay driving to save for an EV
- 38% refuse to drive a petrol or diesel as their first car
The average electric car remains three times more expensive than petrol or diesel models, and insurance costs for young drivers are also higher at £1,881 per year compared to £1,621 for conventional vehicles. Despite these costs, many young drivers are prioritizing sustainability. One young driver told The Telegraph, “I am happy to hold off until I can afford an electric car rather than get on the road more quickly in a petrol car.”
Insurance and Tax Implications
Sara Newell, director of insurance at MoneySuperMarket, noted that while EVs are more expensive, insurance costs are starting to drop as more models become available. However, about 70% of EV drivers will face the Expensive Car Supplement of £425 annually if their vehicle was priced over £40,000 when new. This tax applies to both new and used EVs registered from April.
Chris Rosamond from Auto Express criticized the application of this tax to EVs, calling it “unfair” given the significant sums involved. The supplement can total £2,125 over five years for vehicles originally priced over £40,000.
As the market evolves, young drivers continue to show a strong preference for electric vehicles despite the higher upfront costs and additional taxes. The trend reflects both environmental concerns and a desire to minimize long-term expenses through lower tax rates.
