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8 min read published August 15 2022
Writer: Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in helping readers to navigate the details of taking out loans to buy a car. 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 committed to helping readers gain confidence to control their finances with precise, well-researched and well-studied information that breaks down otherwise complicated subjects into digestible pieces. The Bankrate guarantee
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This compensation could influence the manner, place and when products are listed in the event that they are not permitted by law. This is the case for our mortgage or home equity products, as well as other home lending products. Other factors, like our own rules for our website and whether the product is offered in your region or within your personal credit score can also impact the manner in which products are featured 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 products or services. One-in-four new car buyers are now considering purchasing an or hybrid similar to the traditional gas-powered vehicle as per (KBB). Making the switch to electric -- or any alternative fuel vehicle is a good idea for both your wallet and the environment. Before you head to the dealership , it's sensible to consider electric vehicles and be aware of the differences in the cost of ownership. What exactly is an electric vehicle? Electric cars have seen a huge rise in popularity in recent years particularly as awareness of climate-related issues continues to grow. This, combined with and the high cost of gas has led to drivers looking to save money by going electric. In contrast to the gas-powered cars that are commonly lining highways and parking lots, EVs have a motor that is powered by a battery. There are three kinds of electric vehicle. Hybrid electric vehicles (HEVs) powered by an electric motor as well as an internal combustion engine, HEVs boast the strength of a gas-powered traditional vehicle with the benefit of improved performance and fuel efficiency. It is not possible to charge an HEV as you would with the EVs it is compared to, however it charges the battery by the engine. There are a large variety of makes and models of HEVs available on the market. The top-rated models according to KBB are 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 just as it sounds it is a hybrid vehicle is charged through a plug. It is powered by a battery pack inside the vehicle, which is charged through the external cables. PHEVs also use another fuel, usually gasoline, to power an internal combustion engine (ICE). This type of vehicle uses electricity until it's consumed and then taps its ICE capabilities. The choices for PHEVs can be smaller, 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. Fully electric vehicles (EVs) A fully electric vehicle increases the quality and is entirely powered by an electric motorthere is no ICE or alternative fuel source involved. These vehicles have a battery pack that powers the vehicle and is charged in the same way to a PHEV. EVs are charged through a specialized outlet. 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 if you are considering an all-electric. KBB's top fully-electric options include the Chevrolet Bolt EV, the Nissan Leaf and the Ford Mustang Mach-E. Price of electric vs. gas cars Prior to diving deep into the world of electric and hybrid cars it is essential to know the price differentiation between electric and gasoline. While it is true that driving an EV can come with less overall cost, the upfront price tag could be an obstacle for many. In recent times, purchasing a new car can be expensive regardless of its source of power. July 2022 was a record month for average transaction prices for new cars that exceeded $48,000, according to . However, the price of an EV is higher than that of a gasoline-powered vehicle. According to the KBB estimates for an EV is more than $60,000that's in line with an average price for a luxury car. But it is forecasted to be that the EV market will grow to 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 acts as a potential equalizer. When more consumers are looking into purchasing electric vehicles their costs will go down. The evidence of this is already evident in the variety of new options that are entering the market. For the quarter that began in early 2022, 4.64 percent of new vehicle registrations were for electric vehicles, and 7.18 per cent were hybrid vehicles, according to Experian's report of automotive market trends. This made for a 60.4 percent growth in EVs over the first quarter of 2022, and the same for hybrids, with a 10.7 percent increase for hybrids. Cost of owning electric vehicles in comparison to. gas cars While the initial cost of your next vehicle is important you should also consider the costs involved in maintaining and own the vehicle over the life of ownership. Take a look at the cost-to-own analysis for five years for two popular sedans , as per Edmunds. The first, 2022 Chevrolet Bolt EV, comes in at $31,955 MSRP . It offers a wide space, a spacious cabin and an excellent handling rating. The secondmodel, a 2022 Mazda 3, is a well-known gas-powered model with a lower MSRP of $24,115. Both offer premium interiors with a smooth and comfortable ride as well as an engine that is turbocharged. 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
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
The true cost of owning
$25,522
$31,277 Fuel On the most basic scale, driving an electric vehicle means that there will be no need to the gas station. In a study for 2020, it was found that EV owners will pay on average 60% less to fuel their vehicles. The difference in cost of gas between Chevy and the Mazda is much higher than the typical. But getting power to charge your electric vehicle isn't as simple as choosing regular high-end, mid-range or high-end. Electric vehicle charging can be divided into three choices that come with different costs and advantages. One charging. This is the most common form of charging and is accessible via the same outlet you charge your smartphone with. They are the least efficient charging options and provide anywhere between 2 and 5 miles charge per hour. Level two charging. These chargers, usually installed and found in your garage, use the same power that your washing machine would. It is possible to gain between 10 and 20 miles of charge in just one hour. Level 3 charging. Also known as DC charging These are accessible in public areas. They're the fastest method and motorists can receive an 80 per cent charge within 20 minutes. As running your washing machine several times in a row will cost you more electricity and the extra cost from charging at home can be significant. This ongoing cost is added to the cost for installing an at-home charger that can vary from $300 to $50,000, dependent on the capacity that the charge. Keep in mind that many communities have access to chargers, which means you do not have to shell out for installation right away. Check out , a free EV station map, to locate chargers within your region. Finance Although you are able to finance a careither gas or electric powered -- simply by applying on the internet or in person with a few lenders before picking the , financing a green vehicle can provide some added perks. serve drivers looking to finance their electric vehicle. These kinds of loans are usually offered through a credit union and tend to offer lower rates of interest 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 worth up to $7,500, depending on the state in which you reside. Insurance Insuring your vehicle is an essential part of owning a vehicle that safeguards you and your passengers. carries the same approach that you'd take to protect the standard vehicle options. It covers bodily injury, collision responsibility and comprehensive insurance. As with all vehicles the cost will depend on various variables. But insurance for an EV is typically more expensive than gas-powered options. The reason for this is due to the cost of the car's components. An accident of a minor nature could result, for example having to pay for a battery pack replacement -- which can be upwards of $15,000. Bankrate looked at 12 models of vehicles supplied by Quadrant Information Serves and discovered that, on average premiums are higher for electric cars. This is demonstrated by the higher insurance rates forecast for the Bolt over the Mazda 3. Pros and disadvantages of electrical vehicles electric vehicles may provide a drive that is better for the environment as well as your wallet in the long run however, they're not without downsides. The advantages of electric vehicles Some advantages to driving an electric car include: Less maintenance. Electric vehicles require less trips to the mechanic, which can mean less money spent on costs, such as oil changes and brake system checks. Lower cost over the life of the car. Vehicle ownership can be expensive, but EVs come with a lower cost. More sustainable environmentally. They do not release tailpipe air pollutants and are therefore more beneficial for the local air quality as well as overall emission of greenhouse gases. Modern technology is available. Many newer electric car models come with advanced control panels and mobile applications to manage and monitor the vehicle. Cons of electric cars Some disadvantages of driving an electric vehicle include: higher cost of purchase. In the average, purchasing an EV carries a steeper price upfront, averaging $12,000, as per the average KBB July 2022 transaction prices. A fear of distance. Charging stations can be a bit scarce and far in certain 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 when it comes to electric cars. Cost of installing the charging station. If you prefer the convenience of the convenience of charging in your home the installation could cost as much as $50,000. Is an electric car right for you? If your next set of wheels is electric, it should be thought of in the same way that you'd pick which model or style of a traditional car is right for you -take into consideration your lifestyle and needs. If your commute works with the range that the EV provides or you like the sleek design and environmental benefits, then an electric car might be the best option. However, if committing to a full EV is too much of a financial commitment you might want to think about an alternative, such as the hybrid or plug-in option when you're planning to purchase. Hybrids and PHEVs typically cost less upfront , but still provide the savings advantages that a fully electric vehicle does. Be aware of these aspects when you are shopping to make sure that you're choosing an EV is worth investing in. The vehicle range If you're accustomed to a lengthy commute to work and don't have access to charging stations on the way as well at the destination you are heading to, think about the range of the vehicle that the car you are considering buying. The typical battery's range will vary greatly depending on the type of car. Make sure that you don't purchase a car you cannot easily keep charged to go on your daily excursions. Chargers available before heading to the dealer to look around look for chargers in your area or consider the cost of the installation and maintenance of an at-home charger. This means weighing the level one, two and three options based on your requirements. Your lifestyle. Not only is it crucial to think about your way of life in terms of style but also function. Electric vehicles tend to function differently from what you are accustomed to. Due to its reliance on regenerative braking, as an instance, you could expect slower brakes, but a more smoother overall experience. The final word: the cost to own an EV could be lower than a gasoline-powered vehicle. Even with steeper vehicle depreciation as well as higher insurance costs and financing costs, the lower maintenance cost and the five-year period to own an EV makes it a promising choice. For a potential car buyer, it is important to consider which costs are important most to you, and if EV is compatible with your life. FAQs How long does it take to charge an electric vehicle? Depending depending on the dimensions of your vehicle's battery, charging can take as little as 30 minutes or as long as 12 hours. A recommended best practice is to fill up your EV in smaller amounts instead of all at one time in order to decrease the amount of time required to charge. How much does it cost to recharge an electric vehicle? While the exact price for charging will vary based on location due to varying electric costs, the charge is determined by the available range and price 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 around $7 for a full charge. How long will electric car batteries last? Batteries found in an EV can last between 10 and 20 years until they require a complete replacement.
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This article is written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers to navigate the ways and pitfalls of taking out loans to purchase cars. Written 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 concise, well-researched and well-organized facts that break down complex topics into manageable bites.
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