Step-by-step guide to PCP, HP, personal loan and leasing car finance. Real total cost comparison on a £22,000 car with APR, balloon payment and insurance group explained.
An electric company car had just 2% Benefit in Kind (BIK) rate in 2022–2024. It rises to 3% in 2025/26 and 4% in 2026/27 — still dramatically lower than 20-30% for petrol cars. On a £50,000 EV, a 40% taxpayer pays just £600/year in tax.
Fuel duty has been frozen at 52.95p per litre since March 2022 — and the Spring Statement 2026 extended that freeze again. But duty is only part of what you pay at the pump. Here's the full breakdown of what makes up petrol and diesel prices in 2025/26.
Car insurance groups run from 1 (cheapest to insure) to 50 (most expensive). A group 1 car can save a young driver £1,500–£3,000 per year compared to a group 30 vehicle. Here are the best group 1 and low-group cars available in the UK in 2026.
UK cars are quoted in MPG using the Imperial gallon (4.546 litres). EU cars use L/100km. The conversion is not obvious — and using US MPG figures by mistake makes every car look worse than it is. Here's the correct formula and a full conversion table.
PCP has the lowest monthly payment but the highest total cost if you keep the car. HP costs more per month but you own the car at the end. A personal loan (if you qualify for a good rate) often has the lowest total cost of all three.
PCP and HP car finance explained clearly: how monthly payments are calculated, what you're actually paying in interest, the voluntary termination right, and cheaper alternatives.
At 10,000 miles per year, an EV costs approximately £500–£700 to charge (home charging) versus £1,400–£1,800 to fuel a petrol car. But EVs cost more to buy and now pay VED from April 2025. Here's the full cost comparison.
Vehicle Excise Duty rates changed significantly from April 2025, and EVs now pay VED for the first time. Here's exactly how much road tax your car costs in 2026, by fuel type, age and first-year registration.
An electric-car salary sacrifice scheme can deliver a 30–45% effective discount on monthly lease payments for a higher-rate taxpayer. Here's the full worked example on a £55,000 salary and a Tesla Model 3.
