With fuel subsidy ending, do electric vehicles mean long-term savings?

two people charging a green electric car and saving money on petrol

This week will see the end of the federal government’s temporary fuel excise reduction on 28 September, 2022. Projections see fuel prices rising up to 25.3c per litre, which will see a 60L tank of petrol increase by roughly $15.18. 

The reductions were a six month measure put in place to ease consumer stress as fuel prices surged amidst political unrest in Ukraine, an upcoming federal election, and Covid-19 supply chain issues. Despite pressure to extend these measures with the cost-of-living crisis, the reinstatement of the full fuel excise has many Aussies feeling as though they will not be able to afford to fill up their tanks.

While the ACCC is prepared to monitor abnormal increases in the immediate aftermath of the 28th, the increasing cost of fuel prompts the question: are electric vehicles (EVs) cheaper in the long run?

Do you stand to save with an electric vehicle?

The limited range of EV models in Australia - and higher ticket price - means that upfront costs can be much higher than equivalent petrol-powered vehicles. This can be a major deterrent for consumers, along with limited infrastructure to support EV charging and the high cost of energy.

That said, EVs - especially battery electric vehicles, or BEVs - have been shown to be considerably cheaper to run than comparable combustion engine cars (especially if charged off peak or paired with renewable energy to charge). The Electric Vehicle Council estimates the average running cost of a fuel car at $14/km, while the average EV works out to roughly $4/km. Research by Evenergi estimated a $5,000 gap in ownership costs between comparative EV and petrol vehicles over 5 years.

These savings aren’t just at the pump, but also at the mechanic. With EVs having far less moving parts than a conventional engine, you can save up to 40% on maintenance fees. Of course, it’s hard to get a hold of any new car at the moment, let alone an EV - but it is being increasingly incentivised

How do I buy an electric vehicle?

If you are looking into making the switch to an EV, you might want to consider car loans designed specifically for electric and hybrid electric vehicles. With lofty goals to phase out new petrol vehicles in favour of green cars, many lenders offer some of their best interest rates on loans for electric vehicles or cars that meet sustainability standards.

In the meantime, if petrol is your pick, try to keep a cap on costs. Certain brands offer membership discounts that can end up being worthwhile when added up. You can also keep an eye on a petrol price cycle tracker, as well as individual apps for different states (NSW, SA, WA, Tas, QLD, NT - not currently offered by Vic or ACT) to avoid getting overcharged.

Did this story get your engines revved? Check out our picks for Mozo’s best car loans to find some top performers. Stop by our green finance hub to find more ways saving can be sustainable.

Compare low interest car loans - last updated 23 February 2024

Search promoted car loans below or do a full Mozo database search. Advertiser disclosure
  • New Car Loan - Special

    Home Owner Discount, Including Demo, Variable, Secured

    Interest rate
    comparison rate
    Monthly repayment
    6.24% p.a.
    7.36% p.a.based on $30,000
    over 5 years

    Low variable car loan rate for purchasing new and demo vehicles from dealers. Personalised loan amounts between $5,000 and $150,000. Flexible repayment options. Choose between the 3 to 7 year loan terms. Good credit history. Stable employment history and Australian citizenship or PR required.

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 6.24% would cost $35,880.27 including fees.

    Compare
    Details
  • New Car Loan - Special

    Home Owner Discount, Including Demo, Fixed, Secured

    Interest rate
    comparison rate
    Monthly repayment
    7.09% p.a.
    8.21% p.a.based on $30,000
    over 5 years

    Eligible for homeowners only. Low fixed car loan rate for purchasing new and demo vehicles from dealers. Early payout options available. Winner of Mozo's Experts Choice Car Loan 2021 award^. Good credit history. Stable employment history and Australian citizenship or PR required.

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 7.09% would cost $36,598.64 including fees.

    Compare
    Details
  • Used Car Loan

    Fixed, Secured, No vehicle age limit

    Interest rate
    comparison rate
    Monthly repayment
    6.57% p.a.
    7.19% p.a.based on $30,000
    over 5 years

    Get a competitive fixed interest rate on a secured used car loan of up to $75,000 depending on your credit score. No vehicle age limits. Easy online application. Fast pre-approval. Pre-approved funds held for up to 3 months. No monthly account keeping fees, no exit fees and no early repayment fees. Flexible weekly, fortnightly or monthly repayments on terms from 1 to 7 years.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.57% would cost $35,528.12 including fees.

    Compare
    Details
  • New Car Loan - Special

    Including Demo, Variable, Secured

    Interest rate
    comparison rate
    Monthly repayment
    7.74% p.a.
    8.85% p.a.based on $30,000
    over 5 years

    Low variable car loan rate for purchasing new and demo vehicles from dealers. Extra low rate for qualifying homeowners. Personalised loan amounts between $5,000 and $150,000. Flexible repayment options. Choose between the 3 to 7 year loan terms. Good credit history. Stable employment history and Australian citizenship or PR required.

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 7.74% would cost $37,153.94 including fees.

    Compare
    Details
  • Clean Green Car Loan

    New or Used, Fixed, Secured

    Interest rate
    comparison rate
    Monthly repayment
    7.29% p.a.
    8.41% p.a.based on $30,000
    over 5 years

    Get a 1% discount on your car loan interest rate if you buy a qualifying green car. Winner of Mozo's Experts Choice Green Car Loan 2021 award^. Good credit history. Stable employment history and Australian citizenship or PR required.

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 7.29% would cost $36,768.95 including fees.

    Compare
    Details

* WARNING: The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

^See information about the Mozo Experts Choice Personal Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.