Petrol, diesel, hybrid, plug-in hybrid or electric – which is the cheapest to own?

You might think that the lower running costs of an electric or hybrid car will make it the cheapest ownership prospect. We reveal that’s not always the case...

Mazda CX-5 2019 Right hand cornering shot

Large and luxury SUVs

Audi’s Q7 is one of the biggest and priciest luxury SUVs to own. However, although the plug-in hybrid version costs nearly £10,000 more to buy, it works out to be a more reasonable £4191 more expensive over three years, thanks to its improved fuel economy. 

Of course, such low consumption is only achievable if you top up the batteries every day and stick to short journeys. It won’t be achievable if you do lots of long, high-speed journeys with the batteries depleted. 

Used Volvo XC90 15-present

The plug-in hybrid version of Volvo’s XC90 is lighter on the wallet than the D5 diesel, even though it costs nearly £12,000 more to buy. Like the Q7, the reason for this is the improved fuel economy provided by running on battery power part of the time. 

However, when you compare more affordable SUVs, the hybrids aren’t really cheaper to own. The Toyota RAV4 Hybrid and Mitsubishi Outlander PHEV are more expensive to buy and insure than the petrol Peugeot 5008 and diesel Mazda CX-5, and their fuel/charging costs don’t swing the overall cost of ownership in their favour. 

In fact, the heavier depreciation of the Outlander (it retains only 36% of its value after three years) costs its owner nearly £20,000 in that time. In its favour, it does have significantly better economy than the RAV4, which is hampered by small batteries and a sizeable 2.5-litre petrol engine. 

The 5008 is easily the cheapest to insure, but it can’t match the economy of the CX-5, which will cost a good £1300 less to fuel. 

Make and model List price Target price Depreciation Insurance, servicing and road tax Fuel cost Total 3yr cost
1. Mazda CX-5 2.2d 150 SE-L Nav £26,995 £24,819 £11,861 £3280 £4507 £19,648
2. Toyota RAV4 Hybrid 2.5 Icon £29,010 £26,704 £11,619 £3486 £5691 £20,796
3. Peugeot 5008 1.2 Puretech 130 Allure £27,430 £27,430 £13,989 £2728 £5864 £22,581
4. Mitsubishi Outlander PHEV Juro £34,255 £34,255 £19,525 £3314 £3232 £26,071
5, Volvo XC90 T8 AWD Momentum £62,570 £57,783 £23,995 £5584 £4425 £34,004
6. Volvo XC90 D5 AWD Momentum £50,985 £46,530 £21,038 £5650 £6823 £33,577
7. Audi Q7 3.0 TDI 272 quattro S line £57,785 £53,143 £24,251 £6362 £6402 £37,015
8. Audi Q7 e-tron 3.0 TDI 258 quattro £67,550 £62,894 £31,821 £5444 £3941 £41,206


Peugeot 5008

Why does it cost more to insure alternatively fuelled vehicles? 

Cars with the latest technology, such as new hybrid systems and electric motors, can be far more expensive to buy than their conventionally powered counterparts. And this is one factor that can push up the cost of insurance. 

In fact, recent studies have revealed that electric cars are as much as 60% pricier to insure than their petrol and diesel rivals. And indeed, looking at the models in our comparison tables, the electric version of the Volkswagen Golf costs nearly twice as much to cover for three years than the petrol model, while the electric Hyundai Ioniq is costlier than its hybrid and plug-in hybrid siblings. 

Insurers state that the extra cost of electric car premiums is due to a number of factors, including their higher purchase and parts prices and the need for specialist kit to work on them. They say this will level out as more people go electric. 

In the meantime, our advice is to check cars’ insurance groups before you buy so you can opt for ones, such as the Volkswagen Up, that don’t have far higher groups for their electric models. 

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