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8 minutes read. Published August 15 2022
Written by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in helping readers with the ins and outs of securely borrowing money to buy cars. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are committed to helping readers gain the confidence to manage their finances with precise, well-researched and well-studied information that breaks down otherwise complex topics into manageable bites. The Bankrate promises
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This compensation could impact how, where and when products are listed in the event that they are not permitted by law for our mortgage, home equity and other home lending products. Other factors, like our own website rules and whether the product is available within the area you reside in or is within your self-selected credit score range could also affect the way and place products are listed on this site. We strive to offer an array of offers, Bankrate does not include information about every financial or credit product or service. One in four new car shoppers now consider buying a hybrid or electric car just as they would with gasoline-powered vehicles as per (KBB). The choice of electric vehicles — or any alternative fuel vehicle could prove worthwhile both for your pocket and the environment. Before you head to the dealership it is sensible to consider electric vehicles and understand the difference in the cost of ownership. What is an electric car? EVs have been exploding in popularity in recent times, especially as the awareness of climate issues continues to evolve. This, along with rising gas prices, has resulted in drivers seeking to save money driving electric. Unlike the typical gas-powered vehicles on the roads and in parking lots, EVs have a motor which is powered by batteries. There are three kinds that are electric cars. The hybrid electric vehicle (HEVs) are powered by an electric motor as well as an internal combustion engine HEVs have the power of a traditional gas-powered vehicle with the benefit of improved fuel economy. There is no charge for an HEV the same way as its EV counterparts but rather it charges the battery by the engine. There is a wide range of makes and models of HEVs in the marketplace. Some highly rated options as per KBB include the Honda Accord Hybrid, the Toyota RAV4 Hybrid and the Hyundai Elantra Hybrid. Plug-in hybrid electric cars (PHEVs) Plug-in hybrids is, as the name suggests it is a hybrid vehicle is charged through a plug. It’s powered by an internal battery within the vehicle, which is recharged by the external cables. They also make use of other fuels, typically gasoline to power the internal combustion engine (ICE). The vehicle makes use of an electric battery until it’s consumed and then taps the ICE capabilities. The choices for PHEVs can be smaller, but KBB’s most popular choices are that of Ford Escape SE Plug-in Hybrid, the Hyundai Tucson Plug-in Hybrid, and the Kia Niro Plug-in Hybrid. Full electric cars (EVs) Fully electric vehicle increases the quality and is powered completely with an electric motor- no ICE or additional alternative fuel sources involved. They have a battery that powers the vehicle and is charged in the same manner to PHEVs. EVs are charged through an outlet designed specifically for them. While charging stations can be located in the local area, it is important to remember the added cost of a charging station when considering a full EV. KBBs favorite fully EV choices include The Chevrolet Bolt EV, the Nissan Leaf and the Ford Mustang Mach-E. Cost of electric in comparison to. gas cars Before diving in the deep end of hybrid and electric vehicles, it is crucial to comprehend the price differentiation between gas and electric. Although driving an EV will have lower overall costs but the initial price is an obstacle for some. Lately, buying a new car can be expensive regardless of the source of power. July 2022 saw record-breaking average prices for transactions on new cars of more than $48,000, as per . However, the cost for an EV is still more expensive than a gas-powered option. The KBB estimates for an EV exceeds $60,000that’s in line with an average price for a luxury car. But it is forecasted the EV market to reach 40 % by the year 2031 according to . This estimate is backed by the increased number of vehicles that are entering the market. And, fortunately, this growth in EV availability serves as a potential equalizer. When more consumers are looking into purchasing electric cars and electric cars, the cost of them will drop. This growth is already clear by the increasing number of new models being introduced to the market. For the quarter that began in early 2022, 4.64 percent of new vehicle registrations were EVs, and 7.18 percent were hybrids, according to Experian’s report on the automotive market trends. This made for a 60.4 percent growth for EVs over the first quarter of 2022, and a 10.7 percent growth for hybrids. Cost of owning electric vehicles in comparison to. gas-powered cars Although the initial cost of purchasing the next car is crucial, you must also understand the costs involved in maintaining and keep the car for the course of its ownership. Consider the five-year cost-to-own comparison of two popular sedans according to Edmunds. The first model, the 2022 Chevrolet Bolt EV, comes in at $31,955 MSRP . It comes with a huge range, spacious cabin and a well-rated handling. The secondmodel, 2022’s Mazda 3, is a popular gas-powered option with a price tag of $24,115. It comes with an elegant interior with a smooth and comfortable ride as well as a turbocharged engine. Think about how the expenses accumulated over the course of five years of vehicle ownership affect which model you would prefer. 2022 Chevrolet Bolt EV
2022 Mazda 3
Taxes and fees
The true cost of owning
$31,277 Fuel On the most basic scale, driving an electric vehicle means no more trips to the gas station. In a study for 2020, discovered that EV owners will spend on average 60 percent less to fuel their vehicles. The price difference for fuel between the Chevy or the Mazda is more significant than the average. However, getting power to charge your electric vehicle isn’t easy as simply choosing standard middle-priced or premium. The charging process for EVs can be divided into three options that all have different benefits and costs. Level one charging. This is the most commonly used method of charging and is available through the same outlet that you charge your cellphone with. They are the slowest charging option and provide between two and five miles of charge per hour. Level two charging. These chargers, typically installed and located in your garage are powered by the same electricity as your washing machine. You could get between 10 and 20 miles of charge in just one hour. Level three charging. Also called DC charging, these are available in public areas. They’re the most efficient option and drivers can receive an 80 per cent charge in just 20 minutes. Similar to how running your washing machine several times in a row can increase your electricity bill, the additional cost incurred when charging at home can be significant. This ongoing cost is on top of the initial cost to set up an at-home charging station that can vary from $300 to $50,000, dependent on the capacity that the charge. But keep in mind that most communities have access to chargers, so you may not be required to pay for installation immediately. Visit a free map of EV stations to find chargers in your local area. You can finance your cargasoline or electric powered — apply on the internet or in person with some lenders before settling on the , financing a green car may come with additional benefits. serve drivers looking to finance an electric car. These kinds of loans are usually offered through a credit union , and tend to have lower interest rates than conventional auto loans. You may also qualify for financial incentives which is offered in certain states in the U.S. You can benefit from a credit amounting as high as $7,500, contingent on the state you reside in. Insurance Insuring your vehicle is a vital part of the ownership process that will protect you and your passengers. It follows the same method you would take to cover the traditional vehicle option. It will include bodily injury, collision insurance coverage, and liability. As with all vehicles, your exact price will be determined by various factors. However, insurance for an EV is typically more expensive than gas-powered options. One reason is the price of the car’s components. A minor accident could cause, for instance, in the need for a battery pack replacement — which can be more than $15,000. Bankrate examined 12 car models that were provided by Quadrant Information Services and concluded that, on the average premiums are higher for electric cars. This is evident in the increased insurance cost expected for the Bolt in comparison to the Mazda 3. The pros as well as cons for electric cars electric vehicles may provide a drive that is better for the environment as well as your wallet in the long run However, they do have disadvantages. Advantages of electric cars A few advantages to driving an electric car are the following: less maintenance. Electric cars need fewer trips to the mechanic, and that can result in less money spent on costs, such as oil changes and brake system checks. Lower cost over the life of the vehicle. The cost of owning a vehicle can be high however EVs come with a lower cost. More sustainable to the planet. EVs do not release pollutants from the tailpipe and are therefore better for local air quality as well as overall emission of greenhouse gases. Modern technology is is available. A lot of the latest electric cars have advanced control panels as well as mobile apps to control and monitor the car. There are cons to electric cars. Some disadvantages of driving an electric vehicle include: higher cost of purchase. On average, buying an EV comes with a higher initial cost, which is close to $12,000 more, based on the average KBB July 2022 transaction costs. The fear of range. Charging stations are often few and far in certain areas, leaving some drivers feeling stressed when searching for a location to charge their energy. Faster vehicle depreciation. Battery deterioration and vehicle incentives cause a quick loss of value when it comes to electric vehicles. The cost of installing the charging station. If you prefer the convenience of the convenience of charging in your home installation could cost as much as $50,000. Are electric vehicles the best choice for you? If your next set of wheels will be electric, it must be considered in the same way that you’d pick the model or design of traditional vehicle is the best fit for youtake into consideration your lifestyle and requirements. If your commute works with the range that an EV offers or if you are a fan of the sleek look and environmental benefits, then an EV may be a great option. However, if committing to an all-electric EV is too much of a financial commitment, you might want to look into the option of a hybrid or plug-in if you’re set on buying. Hybrids and PHEVs typically cost less upfront , but still provide the savings advantages that an electric vehicle does. Consider these main aspects when shopping for a car to make sure that an EV is worth investing in. The vehicle range If you’re accustomed to a lengthy commute to work and aren’t able to access chargers along the route and at the point you want to go, consider the vehicle range that the new vehicle you’re considering purchasing. The average battery range can vary greatly depending on the type of car. Be sure you do not buy a vehicle that you cannot easily keep charged for your regular outings. Access to chargers Before going to the dealer to look around make sure you have access to chargers in your area or consider the cost of installing and maintaining an in-home charging station. This is a way of weighing the levels one, two and three options according to your needs. Your lifestyle. Not only is it important to consider your way of life in terms of style but also as a function. Electric vehicles operate in a different way than what you may be accustomed to. Because they rely on regenerative brakes, for example, you can expect slower brakes but more comfortable overall driving experience. The final word: the price of owning an EV can be less expensive than an alternative powered by gas. Even with a higher rate of depreciation and possibly higher insurance and financing costs, the lower maintenance cost and the five-year period for owning an EV is a good choice. If you are a prospective car owner it is essential to decide which expenses matter most to you, and whether EV is compatible with your lifestyle. FAQs What is the time it takes to take to charge an electric car? Depending depending on the dimensions of the battery, the process can take as few as 30 minutes or as long as 12 hours. The best way to go is to charge your electric vehicle in smaller amounts instead of all at one time in order to decrease the time to charge. What is the cost to recharge an electric car? While the exact price to charge will differ by region due to the different electric costs, the charge is based on the range available and cost per Kilowatt (kWh). In California for instance electric power is typically 18 cents for every kWh therefore an electric vehicle with a range of 150 miles would be about $7 for a complete charge. What is the length of time the batteries in electric cars last? The batteries in an EV can last between 10 to 20 years, until they are in need of a replacement.
The article was written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers in navigating the ins and outs of securely taking out loans to purchase a car. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are passionate about helping readers gain confidence to take control of their finances with precise, well-studied facts that break down otherwise complex subjects into bite-sized pieces.
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