Petrol cars typically offer the lowest upfront purchase price, with EVs being on the higher end. However, long-term ownership costs are strongly influenced by depreciation. EVs shed close to 60% of their value over five years. This may be influenced by ongoing improvements in battery technology, which can affect the resale appeal of older models. In contrast, standard petrol vehicles experience an average five-year depreciation of about 45%. Conventional hybrids generally retain value well, losing roughly 40% over the same timeframe. For fleet buyers, hybrids may offer better resale value than many EV or petrol alternatives.
Using a standard baseline of 15,000 kilometres driven per year, daily operating expenses vary significantly across popular medium-SUVs:
The EV (Tesla Model Y RWD): Consuming 14.6 kWh per 100 km, it requires 2,190 kWh annually. Based on a conservative residential electricity rate of 33 cents per kWh, home charging costs approximately $723 per year. Drivers relying primarily on public fast chargers may experience charging costs closer to petrol running expenses.
The Petrol (Mitsubishi Outlander ES 2WD): Consuming 7.5 litres per 100 km, it requires 1,125 litres annually. At $2.00 per litre, annual fuel costs are approximately $2,250.
EV running cost savings are often strongest when charging primarily occurs at home with drivers who use dedicated off-peak electricity tariffs potentially reducing charging costs further. Conversely, petrol vehicle running costs remain highly sensitive to volatile fuel prices. Hybrids provide a more consistent middle ground, particularly in stop-and-go urban driving where regenerative braking maximises the electric motor’s efficiency without the need to plug in.
Because EVs have fewer moving parts, scheduled maintenance is consistently cheaper. However, EVs are becoming more expensive to insure. Premium increases are partly linked to labour shortages for specialised EV technicians and ongoing spare-parts supply constraints.
Traditional petrol vehicles generally require more frequent mechanical servicing, while established repair networks can help support more predictable insurance costs.
Hybrids generally sit between petrol vehicles and EVs in terms of maintenance and insurance costs. Their regenerative braking systems extend the lifespan of consumable parts, and while hybrid premiums increased by 6.6% recently, they generally avoid extreme insurance spikes.
The Fringe Benefits Tax (FBT) exemption remains a critical financial incentive. Currently, battery electric vehicles under the $91,387 threshold are eligible, making novated leases highly attractive. Petrol cars and standard hybrids do not receive this benefit.
Eligibility requirements should be reviewed carefully, as FBT exemptions do not apply to all vehicle types. As of 1 April 2025, PHEVs permanently lost their FBT exemption. With the loss of this advantage, the financial appeal of a PHEV may reduce for some drivers, particularly when the vehicle is used primarily in petrol mode rather than electric mode.
Securing the most cost-effective vehicle depends entirely on driving habits:
The team at Prosperity Smart Drive is here to help you make the most of novated leasing. Reach out to us today to see how much you could save.
