The government’s electric car grant is designed to help drivers afford an EV, with financial assistance of up to £3,750 to help with the purchase price. And while most car makers are embracing the incentives and passing on the savings, one major manufacturer has angered buyers by ramping up its finance costs just days after receiving the full Tier 1 incentive on its best selling models.
Renault’s R4 and R5 were originally available with finance terms as low as 0% when the cars were originally launched, and these remained when they were eligible for the £1,500 Electric Car Grant. However, within days of being made eligible for the full Tier 1 government support of £3,750, Renault ramped the rate on Personal Contract Purchase (PCP) agreements up to 7.9% APR on the R5, with a 6.9% deal for the R4. This is despite the falling interest rates in the general economy and makes it the highest of all its competitors.
When the R5’s initial finance deals were announced in December 2024, offers for the 5 E-Tech included a 0% APR offer across the range if you could stump up a hefty 30% deposit and pay over a 24-month period. The brand’s initial 5.5% APR deals on smaller deposits and longer loan periods have also disappeared, making many versions of the car more expensive overall than it was before the grant was applied, if using finance for the purchase. At the time of writing, Renault’s other models all had lower finance rates, including the Megane E-Tech with a 0% PCP offer.
The repayments a year ago started at £249 per month for the R5 ‘evolution urban’ model with a £3,545 deposit and an agreed 6,000 miles per year. Now it costs £255 per month on the same terms, despite the grant. The same model with a lower deposit of £324 over 48 months was quoted at £324 per month, making the total cost of credit £3,576. Now the total is £333 per month, making the credit cost £4,862 – meaning the finance is £1,286 more over the duration. That swallows up most of the car’s £1,500 grant money.
The costs become more confusing with the bigger battery 'comfort' models. As the full grant only applies to versions with a French-built power packs - labelled as '+' models - Renault has been forced to discount the older cars it has in stock by £2,250 in order to match the price of the newer cars. While these stock R4s and R5s are available with immediate delivery and the discount seems initially generous, the specification is lower than the 2026 model year cars and they are still subject to the same higher 7.9% finance. It means that a 5 E-Tech electric iconic comfort range costs exactly the same per month - £409 after a £409 deposit over 48 months - as it did a year ago before grants were applied, whether you choose from stock or wait for the upgraded car.
The finance company – Mobilize Financial Services – is owned by Renault and shares its offices in the UK. To add to the confusion, Nissan’s Micra is based on the R5 and built in the same factory. The finance is also provided by Mobilize, but the finance APR is at the lower 5.49%. However, Nissan has only been able to secure the lower £1,500 grant for all versions of the Micra as they do not use the French-built battery fitted to the new “+” versions of the R5 which makes them eligible for the higher grant status.
The move is in contrast to rivals such as Stellantis, which have chosen to take a hit on the government's unusual and complex rules around the grant, reducing prices on some models so the versions with higher incentives don't become cheaper than models with a smaller battery or lesser performance.
A company spokesman denied that it was cashing in on the grant scheme, saying: “The competitive positioning of Renault's entire model range is regularly reviewed to ensure we offer compelling value in a highly dynamic market. This has led to changes to our offers across several vehicle lines this quarter, including Renault 4 and Renault 5. These changes in positioning coincide with the launch of new “+” versions of Renault 5 and Renault 4 which feature enhanced specification and different battery sourcing, which has supported eligibility for the £3,750 grant. These new versions are positioned competitively and logically alongside our existing stock of versions eligible for the £1,500 grant. We will continue to monitor and respond to the market as our stock position evolves. The Renault 5 has set new benchmarks in its sector, being ranked top EV in retail for three months of the year. Renault 4 adds to this momentum and saw Renault achieve a 49% mix of EV sales in October.”
The other car makers receiving the Tier 1 grants have not changed their finance rates and in some cases have made them more attractive. For example, the Ford Puma Gen-E has 0% offered on two year Ford Options deal or 1.9% with a more reasonable deposit – that has dropped from 2.9% since July 2025. MINI’s Aceman remains available at 4.9%, the same rate as in the summer before the grant was introduced.
Ginny Buckley, CEO of Electrifying.com, said: “Renault makes some brilliant EVs - the 4 and 5 are well designed, fun to drive and, until now, strong value. We’ve just named the Renault 4 our Electrifying.com Best Value EV of 2026, so it’s disappointing to see finance rates jump just as the car qualifies for the top-tier grant. It may be within the rules, but it’s not in the spirit of a scheme meant to make EVs more affordable - and is a reminder that a well-meaning policy can miss the mark if the rollout and guardrails aren’t right.”
