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8 minutes read. Published August 15, 2022
Authored by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers with the ways and pitfalls of borrowing money to buy an automobile. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since late 2021. They are committed to helping readers gain confidence to manage their finances through providing precise, well-researched and well-studied facts that break down complex topics into manageable bites. The Bankrate guarantee
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If you have questions about money. Bankrate can help. Our experts have helped you understand your money for over four decades. We are constantly striving to provide our readers with the professional guidance and tools required to succeed throughout life’s financial journey. Bankrate adheres to a strict code of conduct , which means you can be sure that our content is honest and reliable. Our award-winning editors and journalists produce honest and reliable content to help you make the best financial decisions. Our content produced by our editorial team is factual, objective, and not influenced by our advertisers. We’re honest about the ways we’re in a position to provide quality content, competitive rates and useful tools to you , by describing how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for the promotion of sponsored goods andservices or by you clicking on certain hyperlinks on our site. So, this compensation can influence the manner, place and when products appear within listing categories and categories, unless it is prohibited by law. We also offer mortgage home equity, mortgage and other home loan products. Other factors, such as our own rules for our website and whether a product is available in 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. While we strive to provide an array of offers, Bankrate does not include details about every financial or credit product or service. One-in-four new car buyers are now considering buying a hybrid or electric vehicle just as they would with gasoline-powered vehicles as per (KBB). The choice of electric — or an alternative fuel vehicle can prove to be worthwhile both for your pocket as well as the environment. But before setting out to the dealership it is wise to electric vehicle options and know the difference in terms of cost. What exactly is an electric vehicle? Electric cars have seen a huge rise in popularity over recent years particularly as awareness of climate issues continues to evolve. This, combined with and steep gas prices have all led to drivers looking to save money by going 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 types of electric vehicle. Electric hybrid vehicles (HEVs) 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 efficiency in fuel consumption. It is not possible to charge an HEV like some of its EV counterparts but rather batteries are charged through the engine. There are a large variety of brands and models of HEVs that are available on the market. A few of the top choices as per KBB include that of the Honda Accord Hybrid, the Toyota RAV4 Hybrid and the Hyundai Elantra Hybrid. Plug-in hybrid electric vehicle (PHEVs) A plug-in hybrid is, as the name suggests it is a hybrid vehicle is charged through a plug. It’s powered by a battery pack inside the vehicle and recharged via another cable. They also make use of other fuels, typically gasoline for powering their internal combustion engines (ICE). The vehicle makes use of electricity until consumed and then taps the ICE capabilities. The options for PHEVs are a bit slimmer, but KBB’s most popular choices include those of the Ford Escape SE Plug-in Hybrid and the Hyundai Tucson Plug-in Hybrid as well as the Kia Niro Plug-in Hybrid. Full electric cars (EVs) Fully electric vehicle ups the ante and is powered completely by an electric motor- no ICE or additional alternative fuel sources are required. These have a battery pack that powers the vehicle and is charged in the same method to PHEVs. Electric vehicles are charged using an outlet designed specifically for them. While charging stations are located in the local area, it is important to remember the added cost for a station to charge when considering a full EV. KBB’s top fully electric options include the Chevrolet Bolt EV, the Nissan Leaf and the Ford Mustang Mach-E. The cost of electric vehicles as compared to. gas cars Prior to diving headfirst into the world of hybrid and electric vehicles, it is important to understand the price differentiation between electric and gas. While driving an EV can come with less overall cost however, the initial cost can still serve as a roadblock for many. In recent times, purchasing a new car is costly regardless of the power source. July 2022 was a record month for average transaction prices for new cars of more than $48,000, as per . However, the cost for an EV is still higher than that of a gasoline-powered vehicle. The KBB estimate for an EV is more than $60,000that’s in line with an average luxury vehicle price tag. But it is forecasted by the EV market will reach 40 percent by 2031, according to . This estimate is backed by the increasing number of vehicles entering the market. And, fortunately, this increase in EV availability is an opportunity to equalize. If more people are considering purchasing electric cars and electric cars, the cost of them will decrease. This is evident in the number of new models coming onto the market. For the quarter that began in early 2022, 4.64 percent of new car registrations were EVs, and 7.18 per cent were hybrid vehicles, as per Experian’s report of automotive market trends. This made for a 60.4 percent growth in EVs in first-quarter 2022 and a 10.7 percent growth for hybrids. Cost of owning electric vehicles as compared to. gas cars While the initial cost of purchasing your next vehicle is vital, you should also consider the costs involved in maintaining and maintain the car over the life of 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 with a price tag of $31,955 and offers a wide capacity, spacious cabin, and well-rated handling. The other, the 2022 Mazda 3, is a popular choice for gas powered vehicles with a lower MSRP of $24,115. It comes with premium interiors with a smooth and comfortable ride as well as an engine that is turbocharged. Consider how the following costs accrued over five years of car ownership affect which model you would prefer. 2022 Chevrolet Bolt EV
2022 Mazda 3
Vehicle depreciation
$8,767
$6,700
Taxes and fees
$2,603
$1,814
Financing
$2,921
$2,309
Fuel
$2,283
$11,255
Insurance
$5,411
$3,941
Repairs
$731
$666
Maintenance
$2,806
$4,592
Cost of ownership for the real thing
$25,522
$31,277 Fuel On the most basic scale, driving an electric vehicle means the end of having to fill up at gasoline stations. In a 2020 study, found that EV owners spend an average of 60% less to fuel their vehicles. The difference in cost of fuel between the Chevy or the Mazda is even steeper than the average. However, getting power for your electric vehicle isn’t easy as simply choosing standard high-end, mid-range or premium. Electric vehicle charging is broken down into three different options that come with different costs and advantages. Level one charging. This is the most commonly used method of charging and is available through the same outlet you would charge your smartphone with. They are the slowest charging option and offer anywhere between 2 and 5 miles charge per hour. Level two charging. These chargers, usually installed and found in your garage utilize the same power that your washing machine would. You can gain up to 20 miles charging in just an hour. Level three charging. Also called DC charging, these are available in public spaces. They are the quickest alternative and users can get an 80 per cent charge within 20 minutes. As washing your machine multiple times in succession will cost you more electricity and the extra cost by charging at home could increase. The ongoing expense is in addition to the initial cost to set up an at-home charging station — which can range between $300 and $50,000, depending on the level of charge. However, keep in mind that many communities have access to chargers, so you may not have to shell out for installation immediately. Visit a free map of EV stations to locate chargers within your area. Financing Although you can -gasoline or electric powered — just apply online or in person with a few lenders before picking the best option, financing a green car can come with additional benefits. For those who want to finance their electric vehicle. These kinds of loans are typically found through a credit union , and tend to have lower interest rates than traditional auto loans. There is also the possibility of qualifying for , a financial incentive 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 Insurance is an essential aspect of owning a vehicle that safeguards you and your passengers. carries the same approach you’d use to cover the traditional vehicle option. It will cover bodily injury, collision liability and comprehensive coverage. And as with any vehicle, your exact price will be determined by various variables. But, insurance for an EV is typically more expensive than traditional gas-powered options. One reason is the price of the vehicle parts. An accident of a minor nature could result, for example in the requirement for a battery pack replacement — something that can cost more than $15,000. Bankrate examined 12 car models supplied by Quadrant Information Serves and found that on average the cost of insurance will be higher for electric vehicles. This is demonstrated by the higher insurance costs forecast for Bolt over the Mazda 3. Bolt in comparison to the Mazda 3. The pros as well as cons for electric vehicles electric vehicles may provide a drive which is healthier for the planet and your wallet over the long haul, but they’re not without disadvantages. Pros of electric cars Some advantages to driving an electric car include less maintenance. Electric cars require less trips to the mechanic which means lower costs for expenses, such as oil changes and brake system checks. Lower cost over the life of the vehicle. Car ownership can be costly, but EVs come with a lower cost. They are better for the environment. They do not release pollutants from the tailpipe, making them more beneficial for the local air quality and overall emission of greenhouse gases. Advanced technology can be found. A lot of the latest electric cars come with advanced control panels as well as mobile apps that allow you to control and monitor the vehicle. Cons of electric cars Some disadvantages of driving an EV include: Higher purchase cost. On average, buying an EV carries a steeper price upfront, averaging $12,000, as per KBB’s average July 2022 transaction costs. A fear of distance. Charging stations can be few and far in certain areas, leaving some drivers feeling stressed when searching for a place to get electricity. Faster vehicle depreciation. Battery deterioration and vehicle incentives cause a quick loss of value for electric cars. Cost of installing an electric charging station. If you prefer the convenience of the convenience of charging in your home the installation can cost up to $50,000. Is an electric car right for you? if your next set of wheels should be electric should be considered similarly to how you would pick which model or model of a classic car is the best fit for you- focus on your lifestyle and requirements. If your commute works with the range that and the range of options an electric vehicle offers, or if you are a fan of the sleek look and environmental benefits, then an EV could be an excellent choice. If however, jumping into an all-electric EV is too much of a financial commitment, you might want to look into the option of the hybrid or plug-in option when you’re planning to purchase. Hybrids and plug-ins generally be less expensive upfront and offer the same money-saving benefits that a fully electric car can offer. Take note of these key factors when shopping to ensure that the EV is worth your investment. The range of your vehicle If you have a long commute and don’t have access to charging stations on the route and at the point you want to go, take into consideration the range of the car you are considering buying. The typical battery’s range will differ significantly based on the type of car. Be careful not to purchase a car that isn’t able to easily charge for your daily outings. Chargers available before heading to the dealer to look around make sure you have access to chargers in your area or look into the cost of installation and upkeep of an at-home charger. This is a way of weighing the levels one, two and three options according to your needs. Your lifestyle It is not only it important to consider your life style in terms of appearance but also in function. Electric vehicles tend to function differently than the ones you’re familiar with. Due to its reliance on regenerative braking, for instance, you will experience slower brakes, but a more comfortable overall driving experience. The bottom line The true cost to own an EV could be lower than a gasoline-powered vehicle. Even with a higher rate of depreciation and potentially higher insurance and financing costs, the lower maintenance costs and the five-year time frame for owning an EV is a good choice. As a car buyer it is essential to decide which expenses matter the most to you and whether EV will fit into your life. FAQs What is the time it takes to take to charge an electric car? Based upon the capacity of your vehicle’s battery, charging can take as little as 30 minutes or 12 hours. A recommended best practice is to recharge your electric car by smaller portions instead of all at one time to reduce the amount of time required to charge. What is the cost to recharge an electric vehicle? While the exact price for charging will vary based on the location due to different electricity costs, the price is determined by the range available and cost per kilowatt (kWh). In California for example the average electricity price is 18 cents per unit which means that an electric car with a range of 150 miles would cost between $7 and $7 for a full charge. How long will the batteries in electric cars last? Batteries found in an EV will last between 10 to 20 years before they require a complete replacement.
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Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers to navigate the ways and pitfalls of 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 from late 2021. They are dedicated to helping readers gain confidence to take control of their finances through providing precise, well-studied details that cut otherwise complex subjects into bite-sized pieces.
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