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Could an electric vehicle slash your motoring costs?

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Low-emission vehicles are cheaper to run and incur lower tax rates, says a new campaign set up to promote electric cars. But the government plans to cut incentives.

Petrol pump

British motorists are being urged to buy cars with very low carbon emissions in a bid to save money while cutting their environmental impact.

A new campaign, Go Ultra Low, has been set up by the motor industry and the government to promote "ultra-low emission vehicles" – those that use electric for at least some of their power requirements, and which emit less than 75g of carbon dioxide per kilometre.

Billions in savings

In total, UK motorists are missing out on almost £25 billion in annual savings by not using such cars, the campaign says.

This is based on research which shows that the average cost to fuel a petrol or diesel car is around 12p per mile, as compared with just 2p per mile for an ultra-low emission vehicle.

At present, cars with emissions of less than 100g/km pay zero vehicle excise duty, also known as road tax.

Vehicles with ultra-low emissions of less than 75g are also exempt from congestion charges in areas such as central London.

New London charge

And from 2020, London is introducing an "ultra-low emission zone" in the current congestion charge zone – this means that vehicles which emit more than 75g of CO2 will face even higher fees for entering the area.

Double decker bus

Hetal Shah, head of the Go Ultra Low campaign, says: "After buying a house, a car is the second most expensive purchase that most of us will ever make.

"Consumers are therefore looking for an option that gives them better value for money on an ongoing basis.

"With fuel costs from just 2p per mile, no road tax, no congestion charge and free parking in many locations, electric cars certainly present a compelling proposition."

Higher purchase costs

"Added to that, there are now a whole host of electric vehicles available to suit any lifestyle, from city run-arounds and family hatchbacks to 4x4s and sports cars."

The Go Ultra Low website has a section devoted to helping choose the most suitable ultra-low emission vehicle.

These include plug-in hybrid cars such as the Toyota Prius (which costs from £28,245) and the Mitsubishi Outlander (£28,249) as well as 100% electric vehicles like the Nissan Leaf (£21,490) and Renault ZOE (£18,443).

Toyota Prius

Toyota Prius

Mitsubishi Outlander

Mitsubishi Outlander

Nissan Leaf

Nissan Leaf

The campaign says that while such cars may be more expensive to buy, this can soon be offset by lower running costs.

'Changing incentives'

Shah adds: "Put simply: the more you drive, the more you save."

However, motoring organisations say that upcoming government changes to the vehicle excise duty (VED) system will remove some of the incentives to go green.

From 2017, the VED exemption for newly registered ultra-low emission vehicles will be removed, and only zero-emission cars will escape road tax.

Edmund King, AA president, says: "The current graduated VED system works well and encourages drivers to opt for more fuel-efficient vehicles.

Reforms go 'too far'

"While our members realised that the system needed to be reformed they think the proposed system will not encourage the take up of lower-emission vehicles.

"In the new VED system, only pure electric or hydrogen fuel cell cars will qualify for the lowest band.

"We believe the current system could have been reviewed to give more incentives for those that opt for lower-emission vehicles.

Simon Williams at the RAC adds: "While the cost-per-mile benefits of ultra-low emission vehicles are plain to see, the government is actually reducing or removing many of the financial incentives to encourage their take-up in the first place – which will be frustrating for anyone thinking of buying a new car.

As well as changes to the VED system – which will not apply to cars registered before April 2017 – the government’s universal plug-in grant scheme is also due to end this year, Williams says.

"The Office for Low Emission Vehicles is planning a replacement ‘tiered’ system, but with only months to go before this is due to be introduced, full details of which vehicles will attract the greatest grants are still unconfirmed."

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