There is no shortage of articles listing which cars qualify for the Electric Car Grant. Which?, Auto Trader and Carwow all maintain lists and update them weekly, and they do it better than a site like this one could. So this is not that article.
The question those lists leave unanswered is the one that actually decides what you buy: does £3,750 off a new EV make it cheaper to own than the same car three years old? A discount only matters relative to the alternative, and the alternative for most people is the used market. So I ran the numbers.
The short answer is no, and it is not close.
What the grant is, briefly
- Launched in July 2025, ending a three-and-a-half year gap since the Plug-in Car Grant was scrapped in 2022.
- Two bands: £3,750 for cars scoring well on the government's sustainability criteria, £1,500 for those that do not.
- Price cap of £37,000 list price. Anything above is excluded entirely.
- New cars only. Used cars do not qualify, which is the whole tension in this article.
- The dealer applies it at the point of sale. There is nothing to claim.
- It runs to 2030, or until the funding is exhausted, whichever comes first.
The comparison
Take a car with a £30,000 list price that qualifies for the full grant, so you pay £26,250. Compare it against buying the same model three years old for £13,500, which is roughly what a car of that price loses in three years at current used EV rates.
| Kept for | New with grant | Used, 3 years old | Difference |
|---|---|---|---|
| 3 years | £10,890 lost | £5,209 lost | Used cheaper by £5,681 |
| 5 years | £16,420 lost | £7,510 lost | Used cheaper by £8,910 |
| 8 years | £21,217 lost | £9,821 lost | Used cheaper by £11,395 |
Per year of ownership, the new car costs £3,630 over three years, improving to £2,652 if you keep it eight. The used car costs £1,736 falling to £1,228. Keeping either for longer helps, which is the usual advice and it holds. But the new car never catches up.
Why £3,750 cannot close the gap
Because the grant is a one-off discount and depreciation is a percentage of a much larger number.
A £30,000 car losing 20% in its first year sheds £6,000. The grant is worth £3,750. The discount is gone inside the first eight months of ownership, and then the car carries on depreciating on the same curve it would have anyway.
Run it without the grant and new is £9,431 worse over three years. With the grant that falls to £5,681. So the grant closes about 40% of the gap and reverses none of it. That is real money and worth having. It is not a reason to buy new instead of used.
When new does make sense anyway
Depreciation is not the only thing you are buying, and this is where the honest answer gets less tidy.
- Salary sacrifice changes everything. If you can lease an EV through your employer, the income tax and National Insurance savings dwarf anything discussed here, and the comparison above simply does not apply. Check whether your employer offers a scheme before reading any further.
- Warranty and battery risk. A new car comes with a full manufacturer warranty and a battery with no history. A six-year-old EV at the end of your ownership period is outside most battery warranties. That is a genuine risk you are being paid to take, and some people reasonably decline it.
- You want a specific car that barely exists used. The grant applies to models launched recently. If you want a Renault 5 or a Citroen e-C3, there is not much of a used market yet.
- Efficiency and charging speed improve. A 2026 car will typically use less energy per mile and charge faster than a 2023 one. Over high mileage this narrows the running-cost side of the comparison, though not by enough to overturn the figures above.
One thing nobody can tell you yet
The grant may be quietly reshaping the used market it is being compared against.
If a large share of new EVs sell for £3,750 below list, that discount eventually flows into used values, because a three-year-old car is priced against what a new one actually costs rather than its nominal list price. Grant-eligible models could therefore depreciate harder than the figures above suggest, which would widen the gap further, not narrow it.
That is a reasonable inference rather than an observed fact, and the scheme is too young to prove either way. Treat any confident claim about what the grant does to residuals in 2029, including that one, with suspicion.
Bottom line
The Electric Car Grant is worth having and worth checking eligibility for, but it is a discount on the most expensive way to own a car, not a route to the cheapest one. On depreciation alone a three-year-old EV costs roughly half as much to own over any period you choose, and the grant recovers about 40% of that difference. Buy new for the warranty, the salary sacrifice treatment or the specific car, and take the grant gratefully when you do. Do not buy new because of the grant.
Put both cars into the calculator with your own mileage, tariff and ownership period.
All ownership figures are calculated from the stated depreciation assumptions rather than quoted from anywhere, so you can reproduce or challenge them yourself.