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8 min 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 to navigate the ways and pitfalls of borrowing money to purchase an automobile. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since the end of 2021. They are committed to helping readers gain confidence to take control of their finances through providing precise, well-researched and well-studied information that breaks down complicated subjects into digestible pieces. The Bankrate guarantee
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Therefore, this compensation may influence the manner, place and in what order products appear within listing categories and categories, unless it is prohibited by law for our mortgage home equity, mortgage and other products for home loans. Other elements, such as our own website rules and whether or not a product is available within the area you reside in or is within your own personal credit score may also influence how and where products appear on this site. While we strive to provide the most diverse selection of products, Bankrate does not include the details of every financial or credit product or service. One in four consumers who are considering buying a new car is buying a hybrid or electric car similar to the traditional gas-powered vehicle According to (KBB). The choice of electric — or an alternative fuel vehicle — can prove to be worthwhile 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 and especially as the understanding of climate-related issues is growing. This, combined with and the high cost of gas has resulted in drivers seeking to save money by driving electric. Instead of the usual gas-powered vehicles that line the highways and parking areas, EVs have a motor 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 the internal combustion engine, HEVs have the power of a gas-powered traditional vehicle but with the added benefit of better fuel economy. It is not possible to charge an HEV as you would with its EV counterparts but rather the battery is charged via the engine. There are a large variety of models and makes of HEVs available for sale. A few of the top choices according to KBB include the Honda Accord Hybrid, the Toyota RAV4 Hybrid and the Hyundai Elantra Hybrid. Plug-in hybrid electric vehicle (PHEVs) Plug-in hybrids is, as the name suggests it’s a hybrid car that is charged through a plug. It’s powered by batteries inside the vehicle, which is recharged via an external cable. They also make use of an alternative fuel, which is typically gasoline for powering an internal combustion engine (ICE). The vehicle makes use of electricity until it is consumed and then taps it’s ICE capabilities. The choices for PHEVs can be a bit slimmer, but KBBs standout options include that of Ford Escape SE Plug-in Hybrid as well as the Hyundai Tucson Plug-in Hybrid, and the Kia Niro Plug-in Hybrid. Fully electric vehicles (EVs) Fully electric vehicle ups the ante and is completely powered with an electric motorthere is no ICE or alternative fuel source involved. They have a battery that powers the vehicle and is charged in the same way to a PHEV. They are charged via an outlet designed specifically for them. While charging stations can be located in the local area, it is essential to be aware of the extra costs that a charger will cost when contemplating a fully electric. KBBs favorite fully EV choices are those like the Chevrolet Bolt EV, the Nissan Leaf and the Ford Mustang Mach-E. The cost of electric vehicles in comparison to. gas cars Prior to 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 may have lower costs overall but the initial price could be an obstacle for many. Recently, purchasing a brand new vehicle is expensive no matter what the power source. July 2022 saw record high average transaction prices for new vehicles of over $48,000, as per . But the average price for an EV is higher than the gas-powered alternative. According to the KBB estimation for the EV exceeds $60,000which is in line with the average luxury car price. However, it is predicted that the EV market will grow to 40 percent by 2031, according to . This estimate is backed by the increasing number of vehicles entering the market. And, fortunately, this rise in EV availability is an equalizer. When more consumers are looking into purchasing electric vehicles their costs will drop. The evidence of this is already evident by the increasing number of new options that are entering the market. In the first quarter of 2022 4.64 percent of new vehicle registrations were EVs, and 7.18 per cent were hybrid vehicles, according to Experian’s report on the automotive market trends. This resulted in a 60.4 percent growth for EVs over one quarter in 2022 and a 10.7 percent growth for hybrids. Cost of owning electric vehicles in comparison to. gas-powered cars Although the upfront cost of your next vehicle is important it is also important to consider the expense of maintaining and maintain the car over the course of its ownership. Look at the five-year cost-to-own comparision of two popular sedans , as per Edmunds. The first is 2022 Chevrolet Bolt EV, comes in at $31,955 MSRP . It has a large space, a spacious cabin and well-rated handling. The second, the 2022 Mazda 3, is a well-known gas-powered model with a lower MSRP of $24,115. It comes with premium interiors 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 car ownership will affect the type of vehicle you would prefer. 2022 Chevrolet Bolt EV
2022 Mazda 3
Vehicle depreciation
$8,767
$6,700
Fees and taxes
$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 will mean no more trips to gasoline stations. A study conducted in 2020 found that EV owners will pay, on average, 60% less to fuel their cars. The price difference for fuel between the Chevy as well as the Mazda is much higher than the average. However, getting the power you need for your electric vehicle isn’t as simple as choosing regular high-end, mid-range or premium. The charging process for EVs can be divided into three options that all come with different costs and advantages. Level one charging. This is the most commonly used method of charging and is accessible via the same outlet that you charge your cellphone with. They are the slowest charging option that provide anywhere between 2 and 5 miles charge per hour. Level two charging. These chargers, which are typically placed and found in your garage utilize the same power that your washing machine would. You could get between 10 and 20 miles of charging in just an hour. Level three charging. Also known as DC charging, these are available in public spaces. They’re the most efficient option and drivers can receive an 80 per cent charge in just 20 minutes. As running your washing machine several times in a row will add to your electric bill, the additional cost incurred from charging at home can be significant. This cost per month is on top of the initial cost to install an at-home charger that could range from $300 to $50,000, according to the size of charge. Keep in mind that many communities are now equipped with chargers, which means you do not need to pay to install it right away. Take a look at the free map of electric vehicle stations to locate chargers within your region. Finance Although you are able to finance a careither gas or electric powered — apply online or in person to some lenders before settling on the green car may come with certain benefits. serve drivers looking to finance their electric vehicle. These types of loans are typically found through the credit union sector and typically have lower interest rates than traditional auto loans. You may also qualify for financial incentives that is available in certain states of the U.S. You can benefit from a credit amounting as high as $7,500, contingent on your home state. Insurance Insurance is an essential aspect of ownership that protects yourself as well as your family members. This policy follows the same route you would take to cover the standard vehicle options. It will cover collision, bodily injury, responsibility and comprehensive insurance. As with all vehicles, your exact price will depend on various variables. But, the insurance cost for an EV generally costs more than conventional gas-powered alternatives. One reason is the price of the car’s components. A minor accident could cause, for instance, in the need to replace a battery pack — which can be over $15,000. Bankrate looked at 12 models of vehicles supplied by Quadrant Information Services and concluded that, on average premiums are more expensive for electric cars. This is demonstrated by the increased insurance cost expected for Bolt over the Mazda 3. Bolt as compared to Mazda 3. The pros and cons of electric cars Electric vehicles can offer a vehicle that’s better for the environment and your wallet over the long term however, they’re not without negatives. The advantages of electric vehicles Some benefits to driving an electric car include: Less maintenance. Electric cars need less trips to the mechanic and that can result in lower costs for expenses for oil change and brake system inspections. A lower cost for the life of the car. Car ownership can be costly however EVs come with a lower cost. More sustainable environmentally. EVs do not release pollutants from tailpipes and are therefore more beneficial for the local air quality and overall carbon dioxide emissions. Advanced technology is available. A lot of the latest electric cars have advanced control panels and mobile apps that allow you to control and monitor the car. The cons of electric cars A few negatives associated with driving an electric vehicle are: Higher cost to purchase. In the average, purchasing an EV carries a steeper price upfront, averaging $12,000 more, based on KBB’s July 20, 2022 average transactions prices. A fear of distance. Charging stations can be a bit scarce and far between in some locations, leaving drivers feeling stressed when searching for a spot to recharge their electricity. Faster vehicle depreciation. Vehicle incentives and battery degradation create quick value loss for electric cars. Cost of installing an electric charging station. If you prefer the convenience of charging at home, installation can cost up to $50,000. Are electric cars the right choice for you? If your next set wheels is electric, it should be considered similarly to how you’d pick which model or style of a traditional car is the best fit for yoube aware of your lifestyle and needs. If your commute works with the range that the EV provides or you like the sleek design and environmental advantages, then an electric vehicle could be an excellent choice. If however, jumping into the full EV is too much of a financial investment, you might want to think about the option of the hybrid or plug-in option in the event that you’re considering buying. Hybrids and plug-ins generally cost less upfront , but still carry some of the money-saving advantages that an electric car can offer. Take note of these key aspects when you are shopping to make sure that the EV is worth your investment. The vehicle range If you’re accustomed to a lengthy commute to work and don’t have access to charging stations on the way and at the point you want to go, take into consideration the range of the vehicle that the new vehicle you’re considering purchasing. The typical battery’s range will differ significantly based on the car model. Make sure that you don’t buy a vehicle that you cannot easily keep charged for your regular outings. Access to chargers Before going to the dealership to browse look for charging stations in your region or think about the expense of installing and maintaining an in-home charging station. This means weighing the level one, two, and three options according to your needs. Your lifestyle It is not only important to consider your way of life in terms of style but also the way of function. Electric vehicles tend to function differently from what you are accustomed to. Because of its dependence on regenerative braking, as an instance, you could expect slower brakes but smoother overall drive. The final word: the price of owning an EV could be lower 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 to own an EV can make it a viable choice. For a potential car buyer, it is important to decide which expenses matter most to you, and if EV will fit into your lifestyle. FAQs How long does it take to charge an electric car Depending upon the capacity of your vehicle’s battery, charging can be as short 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 once in order to lessen the charge time. How much does it cost for charging an electric car? While the exact price to charge will vary by location due to varying electricity costs, the price is determined by the available range and price per Kilowatt (kWh). In California for instance electric power is typically 18 cents per kWh which means that an electric car with a range of 150 miles would fall somewhere about $7 for a complete charge. How long do electric car batteries last? The batteries in an EV can last between 10 to 20 years before they need a full replacement.
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The article was written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers in navigating the details 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 since the end of 2021. They are dedicated to helping readers gain the confidence to take control of their finances through providing precise, well-studied details that cut complex topics into manageable bites.
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