Five ways to get an EV in the UK
Every route to an EV involves a different combination of monthly cost, total cost, and whether you own the car at the end. The right choice depends on your tax situation, how much cash you have, and how long you plan to keep the car.
1. Salary sacrifice
If your employer offers a salary sacrifice scheme, this is almost certainly the cheapest way to drive a new EV. You give up a portion of your gross salary in exchange for a leased car, and because the payments come before tax and National Insurance, the real cost is dramatically lower than it looks.
The Benefit in Kind (BIK) rate for electric cars is 4% in 2026/27. It rises to 5% in 2027/28, 6% in 2028/29, and 7% in 2029/30. Even at 7%, that's far below the petrol BIK rate of 37%. For a 40% taxpayer on a car with a list price of £45,000, the BIK tax works out to roughly £75 per month at the 4% rate.
A gross lease payment of £500 per month effectively costs a 40% taxpayer around £300 after tax and NI relief. Insurance, servicing, and road tax are typically included in the package. That makes salary sacrifice the biggest saving of any option on this page.
The catch: you don't own the car. You need an employer who offers a scheme. And if you leave your job, the lease terms transfer or you may need to return the car. For most employed people who plan to change cars every three to four years, it's still the obvious winner.
2. Personal lease (PCH)
A personal contract hire gives you fixed monthly payments with no option to buy the car at the end. Typical terms are 48 months with an 8,000 miles per year allowance. You hand the car back at the end and walk away.
The main drawback is that you pay from net (after-tax) salary, so there's no tax advantage. Running costs like insurance, tyres, and servicing are separate. Monthly payments are predictable, which some people value, but per pound spent this is more expensive than salary sacrifice for the same car.
PCH makes sense if you want a new car, don't want the hassle of selling it later, and your employer doesn't offer salary sacrifice. Beyond that, the numbers rarely favour it.
3. PCP (personal contract purchase)
PCP is the most common way people finance new cars. Monthly payments are lower than hire purchase because you're only paying off part of the car's value. At the end of the term, you face a balloon payment (typically 40% to 50% of the car's original price) if you want to keep it.
You'll need a deposit, usually 10% or more, and you'll go through a credit check. Interest rates vary, but expect 6% to 9% APR on most EV PCP deals in 2026. The optional final payment gives you flexibility: you can buy the car, hand it back, or use any equity as a deposit on your next PCP.
PCP works well if you want flexibility and lower monthly payments, but over four years the total cost (including interest) is higher than buying outright. And if you do pay the balloon, you've paid significantly more than the cash price.
4. Buying used outright
No monthly payments. No interest. No mileage limits. You own the car from day one and can sell it whenever you like. For many people, this is the lowest total cost option over four or more years.
A three-year-old EV with 24,000 miles on the clock typically still has 90% to 95% of its original battery health. The steepest depreciation has already happened in the first three years, so you lose less value going forward. A used Nissan Leaf or MG4 can be found for well under £15,000.
The trade-off is you need the cash upfront (or a personal loan, which adds interest). You also take on maintenance and warranty risk, though EVs have far fewer moving parts than petrol cars. HonestRange shows you real range and cost for used models, so you know exactly what you're getting.
5. Hire purchase (HP)
Hire purchase spreads the full cost of the car over monthly instalments. Unlike PCP, there's no balloon payment. You own the car once you've made the final payment.
Monthly payments are higher than PCP because you're paying off the entire value, not just the depreciation. Interest applies throughout. HP makes sense if you want to own the car at the end but can't pay the full amount upfront. Over four years, the total cost sits between buying outright (cheapest) and PCP (most expensive due to the balloon and interest structure).
The honest comparison table
Based on a £35,000 new EV or a £14,000 used equivalent. Salary sacrifice figures assume a 40% taxpayer. All figures are approximate monthly net cost to you after tax effects, over a 48-month term.
| Option | Monthly net cost | 4-year total | Own it? |
|---|---|---|---|
| Salary sacrifice | ~£300 | ~£14,400 | No |
| Personal lease | ~£450 | ~£21,600 | No |
| PCP | ~£350 + balloon | ~£31,000 | Optional |
| Used outright | £0 | ~£14,000 | Yes |
| Hire purchase | ~£500 | ~£24,000 | Yes |
Salary sacrifice and personal lease figures are for a £35,000 new car. Used outright is a £14,000 three-year-old car. PCP total includes the balloon payment if you choose to buy. Figures exclude insurance and running costs unless noted.
When salary sacrifice is the obvious choice
If all three of these apply, salary sacrifice is almost certainly your best option: you're employed and your employer offers a scheme, you're a higher-rate (40%) or additional-rate (45%) taxpayer, and you plan to change cars every three to four years.
The tax savings are substantial. A 40% taxpayer saves roughly 40% on the gross lease cost through income tax relief, plus around 12% through National Insurance savings. That turns a £500 per month car into something closer to £300. Even a 20% taxpayer saves meaningfully, though the gap between salary sacrifice and other options is smaller.
Check whether your employer offers a scheme. If they don't, it's worth asking. The employer saves on NI contributions too, so it costs them nothing to set one up. For more on the tax side, see our EV grants and incentives guide.
When buying used wins
Buying a used EV outright is the lowest total cost option if you have the cash and plan to keep the car for five years or more. You avoid interest entirely, and the depreciation curve flattens after year three. A £14,000 used EV that you keep for five years might cost you £8,000 in depreciation total. A salary sacrifice scheme over the same period costs £14,400 or more, and you hand the car back.
The used market has matured significantly. Cars like the Nissan Leaf, Renault Zoe, MG4, Hyundai Kona Electric, and Volkswagen ID.3 are readily available with decent range and battery health. Browse used EVs on HonestRange to see real-world range figures based on physics, not WLTP optimism.
BIK rates roadmap: 2026 to 2030
The government has published BIK rates for electric cars through to 2029/30. Here's the trajectory:
- 2026/27: 4%
- 2027/28: 5%
- 2028/29: 6%
- 2029/30: 7%
For comparison, a typical petrol car sits at 37% BIK. Even at 7%, electric cars are taxed at a fraction of the petrol rate. That gap makes salary sacrifice and company car schemes exceptionally attractive for EVs. The rates are locked in by legislation, so there's no risk of a sudden jump before 2030.
The comparison people miss: used Leaf vs salary sacrifice Tesla
This is the one that surprises people. Compare a £14,000 used Nissan Leaf bought outright with home charging against a £500 per month salary sacrifice Tesla Model 3 (net cost around £300 per month for a 40% taxpayer).
Over four years, the salary sacrifice Tesla costs roughly £14,400 in net payments, plus BIK tax of about £75 per month (£3,600 over four years). That's around £18,000 total, and you hand the car back.
The used Leaf costs £14,000 upfront. Home charging on an off-peak EV tariff might add £40 per month for a typical driver, so £1,920 over four years. Insurance and road tax add perhaps £1,500 over the period. Total: roughly £17,400, and you still own a car worth maybe £8,000 to £9,000.
The out-of-pocket totals are remarkably close. But with the Leaf, you end up with an asset. With the Tesla, you get a nicer car for the same period but nothing at the end. Neither answer is wrong. It depends on whether you value driving a new, longer-range car or keeping costs as low as possible over the long term.
For the full picture on charging costs and tariffs, see our EV vs petrol running cost comparison.
What about the EV grant?
The plug-in car grant for new vehicles ended in 2022 and hasn't returned. But there are still grants for home charger installation (up to £350 through OZEV for eligible applicants), workplace charging schemes, and local authority incentives. These apply regardless of how you finance the car. See the full list in our EV grants and incentives guide.
The bottom line
Salary sacrifice is the cheapest way to drive a new EV if you're eligible. Buying used outright is the cheapest way overall if you have the cash and plan to keep the car. PCP and personal lease sit in between, with PCP offering flexibility and personal lease offering simplicity. Hire purchase makes sense if you want to own the car but need to spread payments.
Whatever route you choose, the running cost depends mostly on how and where you charge. That matters more than the finance method. Start with the car pages to see what each model really costs to run.