Almost 20% of the UK cannot afford even the cheapest electric vehicle through finance, new research has revealed.
The study by car insurance experts CarInsurance.ae used ONS survey data to compare the average monthly income in each area with the estimated cost per month of financing a new electric car. The study based the figures on the 20/4/10 rule for financing a car, which recommends a 20% deposit, a four-year loan, and monthly repayments no higher than 10% of monthly income.
The figures revealed that 78 areas in the UK could not finance even the cheapest new electric vehicle (EV) based on the average salary of the area.
The cheapest EV on the market, the Skoda CITIGOe iV, which retailed at £15,000, is too expensive for almost 20% of the UK. With an estimated finance repayment of £269.75 per month, 78 areas in the UK cannot afford to finance the vehicle with 10% of their monthly income.
Blackpool residents have the lowest average income of any area in the UK, with an annual income of £27,052. Following the 20/4/10 rule, 10% of the monthly salary equates to £225.43 available for monthly repayments – £44.32 short of the funds needed for the Skoda. Nottingham is another area that falls short on affordable monthly repayments, with 10% of an average resident’s monthly income amounting to £237.04.
The average salary in the majority of UK areas means that a typical individual can afford to spend between £270 and £343 per month on finance repayments, resulting in a total of three electric vehicles being a viable financial option. Along with Skoda’s addition to the EV market, the VW e-Up! and the recently discontinued SEAT e-Mii are the most affordable electric cars in the UK.
71 areas in the UK can afford only the Skoda CITIGOe, including the Isle of Wight, Portsmouth and Sheffield. Both the VW e-Up! and SEAT e-Mii retail for £16,000, which means that 134 areas are able to afford only the three cheapest EVs on the market.
Kensington and Chelsea residents can afford the greatest number of EVs on the market, a total of 37. Following the 20/4/10 rule, the London borough’s average annual income of £89,827 would enable someone to finance an EV for an estimated £748.56 per month. The most expensive car in the suitable financing range is Audi’s Q4 e-Tron, retailing for £40,750, resulting in monthly repayments of £732.82.
