The true cost of ownership: petrol, diesel, hybrid and electric cars

How do petrol, diesel, plug-in hybrid and electric cars really compare on running costs? We’ve crunched the numbers to find the cost of ownership – but the answer isn’t entirely straightforward.

If you’re unsure whether to choose a petrol, diesel, plug-in hybrid or electric car – and which one actually saves you the most money – you’re not alone. On paper, the answer can seem straightforward, but once you factor in fuel or charging costs, tax and depreciation, the picture gets a lot more complicated.

To cut through the confusion, we’ve run the numbers on three like-for-like models – the BMW X1/iX1, Peugeot 308/e-308 and Skoda Kodiaq/Enyaq – each available with petrol, diesel, plug-in hybrid (PHEV) and electric powertrains. We’ve compared them over a typical three-year ownership period to find out which comes out cheapest to run, and whether leasing might be the smarter option.

Here, we’ll look at the total cost of ownership (TCO) – the overall cost of buying, running, and maintaining a car throughout the time you own it.

If you just want to see the final results, click below. Otherwise, here are all the things you need to consider.

Click for full results

Starting price

First up, we’ll look at the starting price of each of these cars, assuming you’re paying for them outright. In reality, most buyers will finance their car through a loan or PCP deal, which means interest charges and fees will also need to be factored in. These can vary depending on the agreement, timing and prevailing interest rates.

So, for simplicity, we’ll start with the recommended retail price of a base-spec model for each car, assuming you’re paying in cash.

Car	Petrol	Diesel	PHEV	Electric
BMW X1/iX1	£37,540	£38,835	£42,875	£43,555
Peugeot 308/e-308	£28,495	£29,185	£33,600	£30,995
Skoda Kodiaq/Enyaq	£39,045	£41,335	£42,140	£39,520

While the starting price for an electric BMW iX1 is higher than its other fuel options, our findings show that the hybrid versions of the Peugeot 308 and Skoda Kodiaq are more expensive to buy outright – that’s even before you consider other costs.

But why is this the case? They’re often more expensive than their fully electric counterparts due to a combination of higher complexity, as well as tax incentives and government policies that tend to favour electric cars and help push EV prices down.

In fact, a recent analysis by think tank Energy and Climate Intelligence Unit (ECIU) found that plug-in hybrids cost, on average, £4,150 more than comparable electric models.

When factoring in the buying price of each car, petrol comes out cheapest across all three models, costing around £1,500 less on average than their diesel counterparts.

Road tax

So you’ve bought the car – next up is road tax.

For all cars first registered on or after 1 April 2017, you’ll pay a one-off rate in the first year, which is based on how much CO2 your car emits. This one-off rate can be checked in the official GOV.UK vehicle tax tables, and may also be shown on manufacturer or dealer information pages, but the official rates are published by the UK government. After that, most drivers pay a standard annual rate of £200.

If you’re going electric, it’s worth knowing EVs are no longer tax-free. From 1 April 2025:

• Existing electric cars (registered between April 2017 and March 2025) now pay the standard £200 a year.
• New electric cars also pay a £10 first-year rate, then move onto the standard £200 a year from year two.

There’s also an extra charge to be aware of for more expensive cars.

If your car costs £40,000 or more when new, you’ll pay a luxury car supplement, although this threshold is raised to £50,000 for electric cars. This is an extra £440 a year, charged from the second to the sixth year of the car’s life. After that period, you just go back to the standard rate of £200 per year.

With this in mind, here’s a full breakdown of how much you could pay in tax over three years:

Car	Petrol	Diesel	PHEV	Electric
BMW X1/iX1	£855	£960	£1,395	£410
Peugeot 308/e-308	£805	£960	£515	£410
Skoda Kodiaq/Enyaq	£960	£1,840	£1,395	£410

So, based on road tax alone, electric cars are the cheapest option over three years, saving you around £400 compared with a petrol car over the same period.

Fuel and charging costs

Now, this is where costs become a lot more complex, as they depend on fuel/motor efficiency, fuel costs and charging rates across home charging, public slow charging, and rapid charging.

For our analysis, we used national average fuel and petrol prices from RAC Fuel Watch, at the time of writing:

• Petrol: 157p per litre
• Diesel: 189p per litre

Keep in mind that fuel costs vary depending on where you live and the type of fuel station you use, whether that’s a motorway service station or a supermarket. The RAC Fuel Watch site provides a useful overview of fuel prices, as does the Fuel Finder website.

So, if you drive 8,000 miles per year, and take into account each car’s officially quoted miles per gallon, here’s the average cost of petrol and diesel over three years:

Car	Petrol	Diesel
BMW X1	£3,565	£3,737
Peugeot 308	£3,555	£3,606
Skoda Kodiaq	£3,726	£3,969

Between the two types of fuel, you can save between £100-£200 over three years by choosing petrol over diesel.

What about charging?

Charging costs are a little more complicated, as prices vary wildly depending on where you plug in. So we used three separate rates to better reflect differences depending on how you charge. Here are the average charging rates used in our analysis to calculate costs, as of the time of writing:

• Home charging: 8p/kWh (Octopus Energy/E.ON Next)
• Slow public charging (AC): 54p/kWh (Zapmap)
• Fast public charging (DC): 79p/kWh (Zapmap)

Here’s a breakdown of how much it could cost you to charge up your EV with home charging, public slow charging, and rapid charging over three years:

Car	Home charging	Public slow charging	Public rapid charging
BMW iX1	£457.14	£3,086	£4,514
Peugeot e-308	£468	£3,161	£4,624
Skoda Enyaq	£492	£3,323	£4,860

Costs for PHEVs are also different

To work out the running costs of the PHEV models, we factored in both fuel and electricity use.

For fuel, we used each car’s official MPG figure and assumed an average driving distance of 8,000 miles per year. This allowed us to estimate total fuel consumption over three years, which we then used to calculate the total cost based on the UK average fuel price.

For electric driving, we used the manufacturer’s claimed electric range and assumed the car is charged fully once a week, either at home or using a public slow charger. This helped us estimate the electricity used over the same three-year period. We didn’t account for rapid charging as most PHEVs don’t have these capabilities.

Finally, we combined the fuel and electricity costs to calculate the total average running cost for each car over three years. Here are the costs you can expect for each PHEV car over three years:

Car	Fuel	Home charging	Public charging	Total cost with home charging	Total cost with public charging
BMW X1	£1,262.28	£177.84	£1,196.21	£1,440.12	£2,458.49
Peugeot 308	£1,348	£183	£1,248	£1,531	£2,879
Skoda Kodiaq	£964	£250	£1,778	£1,214	£2,178

If you charge a PHEV weekly at home, it works out around £1,000 cheaper over three years compared with relying on public slow charging. However, our analysis shows that charging a fully electric car at home is still the cheapest option overall across the same period, when you factor in the fuel costs of a PHEV.

Depreciation

When you buy a car, you also have to consider its depreciation. This refers to the car’s loss in value over time, and this average loss can vary from model to model.

In its first year, depending on the car and lots of other variables, a car may lose 15-35% of its value in the first year. After that first big drop, the rate of depreciation tends to slow down to around 10-15% of the start of year two.

With this in mind, here’s a breakdown of how much you’ll lose on these cars over three years, based on valuation data from Cap HPI, a motoring body which monitors depreciation, assuming all vehicles are being traded in at a dealership in good condition.

Car	Petrol	Diesel	PHEV	Electric
BMW X1/iX1	£15,290	£14,685	£16,375	£23,455
Peugeot 308/e-308	£15,495	£15,185	£20,600	£18,495
Skoda Kodiaq/Enyaq	£16,045	£18,335	£16,140	£24,520

This isn’t great for electric cars. Our analysis of Cap HPI data shows that the BMW iX1 loses around 54% of its value over the course of three years, compared to a 41% drop in value for a petrol equivalent.

Electric cars depreciate faster due to rapid technology advancements and there’s still consumer anxiety regarding long-term battery health.

This is important to factor in when looking at your total cost of ownership because depreciation is the difference between what you paid and what you can sell it for, a large loss directly increases the total cost of owning the car.

How much will it cost you overall?

When we add up the road tax, fuel and charging costs and depreciation, here’s how much it would cost you to own these three cars over three years:

Car	Petrol	Diesel	PHEV using home charging	PHEV using public charging	Electric using home charging	Electric using slow charging	Electric using rapid charging
BMW X1/iX1	£19,710	£19,382	£19,210.12	£20,228.49	£24,322	£26,951	£28,379
Peugeot 308/e-308	£19,855	£19,751	£22,646	£23,711	£19,373	£22,066	£23,529
Skoda Kodiaq/Enyaq	£20,731	£23,264	£18,749	£20,277	£25,422	£28,253	£29,790

Our analysis shows that petrol cars are the cheapest to run over three years when you’re buying in cash. On the other hand, electric cars come out as the most expensive if you rely only on rapid charging.

Our findings also suggest that electric cars only make financial sense if you rely solely on home charging, and that you need to factor depreciation into your decision when considering an EV.

That said, if your heart’s set on an electric car, but you want to keep costs low, there’s another alternative to consider…

Is leasing a better option?

If you’re not overly fussed about owning a car long-term, then car leasing can be a great option if you like driving a new car every few years and want predictable, often lower monthly payments compared with other types of car finances.

We actually calculated this to see if it works out cheaper to lease these cars rather than buy them. For this, we factored in the same fuel and charging costs used when calculating costs for the cars if you were to buy them. Leasing costs were also taken from relevant lease deals through Carwow at the time of writing, based on a three-year term covering 8,000 miles per year.

Here are the results:

Car	Petrol	Diesel	PHEV using home charging	PHEV using slow charging	Electric using home charging	Electric using slow charging	Electric using rapid charging
BMW X1/iX1	£19,622.65	£26,621.14	£21,528	£22,546	£21,730.12	£24,358.73	£25,787.18
Peugeot 308/e-308	£13,904	£28,262	£22,621	£23,686	£23,136	£25,829	£27,292
Skoda Kodiaq/Enyaq	£16,749	£19,971.56	£15,243	£16,771	£13,792	£16,623	£18,160

The findings show that, over a three-year period, it’s generally cheaper to lease a petrol or electric car than to buy one outright.

Across all of the cars analysed, the petrol version of the Peugeot was the cheapest to lease over this period, saving almost £5,900 compared to buying a new one outright and factoring in running costs.

Our calculations suggest that you could save more than £11,600 over three years by leasing a Skoda Enyaq rather than buying one outright – even if you rely solely on rapid charging, which is typically the most expensive charging option.

The Enyaq was also found to be the cheapest overall between buying and leasing, with a total cost of ownership (TCO) of around £13,700.

Here are the differences in costs if you lease any of the cars analysed instead of buying them outright, taking into account all the running costs. Our analysis found that some lease deals were actually more expensive than buying outright, although this largely comes down to the lease offers available at the time of writing and the depreciation of the vehicle.

Car	Petrol	Diesel	PHEV	Electric
BMW X1/iX1	+£87	–£7,240	–£2,318	+£2,592
Peugeot 308/e-308	+£5,951	+£8,511	–£25	–£3,763
Skoda Kodiaq/Enyaq	+£3,982	+£3,292	+£3,506	+£11,630

It’s also worth remembering that road tax is included in monthly lease payments, so you won’t need to factor this into your overall running costs. You also don’t have to worry about depreciation, because you don’t own the car in the end. Taken together, these factors make leasing an electric car a particularly appealing option, and our analysis suggests it offers the best overall value.

Final verdict on costs

Our calculations show that owning an electric car without access to home charging rarely makes financial sense. However, if you can charge at home and secure a competitive lease deal, an EV offers the lowest total cost of ownership (TCO) over three years and 8,000 miles per year.

For drivers buying a car outright, petrol cars still come out as the most cost-effective option overall, particularly for those without home charging. Meanwhile, diesel is no longer the low-cost choice it once was. As news editor Jamie Edkins found when analysing the numbers, the savings simply aren’t there for most drivers anymore.

One important factor outside the scope of our calculations is company car tax. Thanks to favourable benefit-in-kind (BiK) rates, electric cars can still make strong financial sense for company car drivers.

Ultimately, the right choice depends on how you use your car and how you plan to pay for it. But for most private buyers today, petrol remains the safest all-round option, while EVs make the strongest case for drivers who can charge at home and take advantage of attractive lease deals.

Car change? Carwow!

Looking for a new set of wheels? With Carwow you can sell your car quickly and for a fair price – as well as find great offers on your next one. Whether you’re looking to buy a car brand new, are after something used or you want to explore car leasing options, Carwow is your one stop shop for new car deals.

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