Petrol prices have climbed roughly 41p a litre since February, while diesel has surged by around 57p due to the conflict between the US and Iran, adding approximately £23 to the cost of filling an average family car's 55-litre tank with petrol and £32 for diesel vehicles. The sharp increases in fuel costs have accelerated drivers' appetite to switch to electric vehicles, with analysis by Insider Car Deals shared exclusively with This is Money showing that new petrol car sales are down 4.4 per cent compared with last year - some 35,600 units - while diesel deliveries have dropped almost 8 per cent to 83,500 between January and the end of October. Battery electric vehicle sales, by contrast, are up 30 per cent, with plug-in hybrids accelerating by 40 per cent.
Despite the decline in orders for conventional cars, dealers are doing the opposite of what might be expected. Average discounts on new petrol cars have fallen from 10.8 per cent in February to 10.2 per cent in November, while diesel discounts have slipped from 9.7 per cent to 8.5 per cent. Hybrid discounts have remained flat at 11.3 per cent. The AA's latest EV Readiness Index shows that 60 out of 100 UK drivers are now considering switching to electric vehicles, up from 47.5 a little over a year ago. Electric cars now account for a third of all new cars joining Britain's roads, yet average EV discounts have narrowed from 13 per cent at the start of the year to 11.1 per cent today.
The motor industry's trade body has estimated that carmakers have been forced to slash EV prices for years, reportedly costing manufacturers £5 billion annually. With demand now growing, manufacturers are looking to recover some of those losses by trimming discounts. However, switching to an electric car does not automatically guarantee a saving, even with fuel prices remaining high. Insider Car Deals compared five popular models with petrol or diesel options alongside fully electric alternatives, calculating monthly personal contract purchase payments based on typical discounted prices and manufacturer finance terms, plus monthly fuelling bills based on annual mileage of 7,000 miles.
The findings showed mixed results across different models. The electric Ford Puma costs £113 a month less than the petrol Puma, Britain's best-selling new car over the past three years, when charged at home on a domestic tariff, and remains £25 a month cheaper even using more expensive public rapid chargers. The electric BMW iX1 proved £82 a month cheaper than the diesel X1 with home charging, but became £19 a month more expensive relying solely on public chargers. However, the petrol Vauxhall Corsa delivered the biggest saving for the fossil-fuel model, with the petrol version £47 a month cheaper than the electric version when charged at home, widening to £150 a month without home charging access.
For motorists wanting to secure savings on petrol, diesel and hybrid models, substantial discounts remain available. Analysis shows an average discount gap of £1,124 across ten cars examined. The Vauxhall Grandland family SUV offers the biggest savings, with buyers able to negotiate up to nearly two fifths off the retail price. The petrol Peugeot 2008 can be haggled down by more than 25 per cent, while rare discounts on Mercedes models mean buyers of the CLA Coupe petrol can save up to £7,750.
For UK savers and borrowers, the narrowing discounts on both petrol and electric cars mean the true cost of vehicle ownership through finance deals is rising across the board, while the monthly running costs of switching to electric remain uncertain depending on home charging access.