You've found the perfect car - but the sticker price is only the beginning. Fuel, insurance, road tax, servicing, and depreciation can double or even triple what you actually spend. This guide breaks down the true cost of car ownership in the UK for 2026, comparing a Tesla Model 3 against a Ford Focus - and shows you exactly where EVs win, and where they still face challenges.
What Is Total Cost of Ownership (TCO)?
Total Cost of Ownership is the full financial picture of running a vehicle over a set period - typically 3 to 5 years. It goes far beyond the purchase price to include:
- Depreciation - the largest single cost for most drivers
- Fuel or electricity
- Insurance
- Vehicle Excise Duty (VED / road tax)
- MOT and servicing
- Finance costs (if applicable)
- Tyres and consumables
When you calculate TCO properly, the cheapest car to buy is rarely the cheapest car to own. Let's look at a real-world comparison.
Tesla Model 3 vs Ford Focus: 5-Year TCO Comparison
We've taken two popular family cars - the Tesla Model 3 Long Range (£42,990) and the Ford Focus 1.0 EcoBoost 125 ST-Line (£27,995) - and compared every major cost over 5 years, assuming 10,000 miles per year.
| Cost Category | Tesla Model 3 (BEV) | Ford Focus (ICE) |
|---|---|---|
| Purchase price | £42,990 | £27,995 |
| Depreciation (5 yrs, ~73% BEV / ~60% ICE) | £31,383 | £16,797 |
| Fuel / electricity (50,000 miles) | £2,205 | £8,875 |
| Insurance (avg. 5 years) | £4,500 | £3,750 |
| VED (road tax, 5 years) | £3,075 | £1,200 |
| MOT (4 x from year 2) | £220 | £220 |
| Servicing (5 years) | £750 | £2,250 |
| Tyres (5 years) | £800 | £600 |
| Total 5-year TCO | £43,933 | £33,692 |
| Monthly cost (TCO / 60) | £732/mo | £562/mo |
Assumptions: 10,000 miles/year. Electricity at Ofgem cap 24.5p/kWh, Tesla efficiency 4.5 miles/kWh. Petrol at 142p/litre, Ford Focus 40mpg combined. VED: Tesla at £190/yr standard rate + £425/yr expensive car supplement (list price >£40k) for years 2–6. Insurance estimated from ABI averages. Servicing: BEV annual check-up; ICE annual service with major service at year 3. Data: March 2026.
Breaking Down the Key Costs
Fuel and Electricity
This is where EVs shine most clearly. At the Ofgem price cap of 24.5p/kWh, driving 100 miles in a Tesla Model 3 costs roughly £2.72. The same journey in a Ford Focus costs £5.68 at 142p/litre - more than double. If you charge on a cheap overnight tariff such as Octopus Go (7.5p/kWh), that 100-mile cost drops to just 83p.
Conversely, using public rapid chargers (BP Pulse charges up to 69p/kWh) pushes the cost to around £7.67 per 100 miles - comparable to petrol. The lesson: home charging is where EV economics are most compelling.
Depreciation
Depreciation remains the Achilles heel of electric vehicles. The average BEV loses around 73% of its value over 5 years, versus 60% for petrol cars. For a £42,990 Tesla Model 3, that represents over £31,000 in lost value - roughly £524 per month simply sitting in your driveway. Certain models buck this trend (see our dedicated depreciation guide), but it is a critical factor in any honest TCO calculation.
VED (Road Tax) from April 2025
Electric vehicles lost their VED exemption in April 2025. From that point, EVs registered after April 2017 pay the standard rate of £190/year. Cars with a list price above £40,000 - including many popular EVs - also attract the Expensive Car Supplement of £425/year for the first five years after registration. This adds up to £615/year for premium EVs, making VED a meaningful cost that simply did not exist before 2025.
Servicing and MOT
EVs have significantly fewer moving parts: no oil changes, no cambelt, no exhaust system, no clutch. Annual EV servicing typically runs £150–200, versus £300–600 for a petrol car depending on the model. Over 5 years, this saves the EV driver roughly £1,500.
Insurance
EV insurance remains somewhat higher than equivalent petrol cars, primarily due to higher repair costs for battery systems and specialist bodywork. Expect to pay roughly 10–20% more on average. This gap is narrowing as insurers gain more claims data.
Benefit-in-Kind (BiK): The Business Driver's Game-Changer
For company car drivers, the TCO picture looks very different. BEVs attract a BiK rate of just 2% in 2026 - compared to 20–37% for petrol and diesel cars. On a £42,990 Tesla Model 3, a higher-rate (40%) taxpayer pays just £344/year in company car tax. The equivalent Ford Focus at 20% BiK would cost over £2,240/year. If you're a company car driver, an EV is almost certainly the financially correct choice.
The Verdict: Who Should Buy What?
- Company car drivers - BEV wins overwhelmingly thanks to 2% BiK. Don't hesitate.
- High-mileage private drivers with home charging - EV savings on fuel make strong sense above ~12,000 miles/year.
- Low-mileage urban drivers - Petrol or hybrid may have a lower 5-year TCO due to depreciation dominating.
- Budget-conscious buyers - A 2–3 year old used EV avoids the steepest depreciation and can offer excellent value.
The true cost of any car depends heavily on your specific circumstances: mileage, charging access, tax position, and how long you plan to keep the vehicle. Use our TCO calculator to run the numbers for your exact situation - it takes less than two minutes.
Sources: Ofgem energy price cap Q1 2026 (24.5p/kWh), RAC Fuel Watch (petrol 142p/litre March 2026), DVLA VED rates April 2025, ABI insurance data, What Car? True MPG. Depreciation based on Cap HPI and Glass's Guide residual values. All figures approximate and for illustrative purposes. CzymPojade.pl TCO engine, calibrated March 2026.