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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 is a specialist in helping readers to navigate the details of borrowing money to buy cars. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate from late 2021. They are committed to helping readers gain confidence to control their finances with clear, well-researched information that breaks down complex topics into manageable bites. The Bankrate promises
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If you have questions about money. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to be successful throughout their financial journey. Bankrate follows a strict , therefore you can be confident that our content is honest and reliable. Our award-winning editors, reporters and editors create honest and accurate content that will help you make the right financial choices. The content created by our editorial team is objective, factual and uninfluenced through our sponsors. We’re open about the ways we’re able to bring quality information, competitive rates and useful tools to you , by describing how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for the promotion of sponsored goods and, services, or by you clicking on certain hyperlinks on our site. Therefore, this compensation may affect the way, location and in what order 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 elements, such as our own website rules and whether the product is available in your region or within your self-selected credit score range could also affect how and where products appear on this site. Although we try to provide the most diverse selection of products, Bankrate does not include the details of every credit or financial item or product. 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). Making the switch to electric — or any alternative fuel vehicle is a good idea both for your pocket and the climate. But before setting out to the dealership , it’s wise to electric vehicle options and be aware of the differences in cost of ownership. What is an electric car? Electric cars have seen a huge rise in popularity in recent years, especially as the awareness of climate issues continues to evolve. This, along with steep gas prices have all resulted in drivers seeking to save money driving electric. Instead of the usual gas-powered vehicles that line the highways and parking areas, EVs have a motor which is powered by a battery. There are three types of electric vehicle. Hybrid electric vehicles (HEVs) are powered by an electric motor and the internal combustion engine HEVs are able to compete with the power of a gas-powered traditional vehicle with the benefit of improved performance and fuel efficiency. There is no charge for an HEV like some of the EVs it is compared to, however it charges the battery by the engine. There are many varieties of makes and models of HEVs in the marketplace. The top-rated models according to KBB include those like the Honda Accord Hybrid, the Toyota RAV4 Hybrid and the Hyundai Elantra Hybrid. Plug-in hybrid electric vehicle (PHEVs) Plug-in hybrids is exactly as it sounds, a hybrid vehicle that is charged through a plug. It is powered by an internal battery within the vehicle that is recharged via the external cables. PHEVs also use an alternative fuel, which is typically gasoline to power the internal combustion engine (ICE). This kind of vehicle utilizes electricity until it’s consumed and then taps the ICE capabilities. The options for PHEVs are smaller, but KBB’s top choices 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 increases the quality and is powered completely with an electric motorthere is no ICE or alternative fuel sources involved. These have a battery pack which powers the vehicle. It is charged in the same method to PHEVs. They are charged via a specialized outlet. While charging stations are accessible locally, it’s important to remember the added cost of a charging station when contemplating a fully electric. KBB’s top fully-electric choices include The Chevrolet Bolt EV, the Nissan Leaf and the Ford Mustang Mach-E. The cost of electric vehicles as compared to. gas vehicles Before you dive in the deep end of electric and hybrid cars it is important to understand the price differentiation between gas and electric. While it is true that driving an EV will have lower costs overall however, the initial cost could be an obstacle for many. Recently, purchasing a brand new car is costly regardless of the source of power. July 2022 was a record month for average transaction prices for new vehicles of over $48,000, as reported by . However, the price of an EV is still higher than that of a gasoline-powered vehicle. The KBB estimate for an EV is over $60,000 — which aligns with an average luxury vehicle price tag. It is expected that the EV market to reach 40 % by the year 2031 according to . This estimation is supported by more vehicles hitting the market. This increase in EV availability is an opportunity to equalize. If more people are considering buying electric cars their costs will drop. The evidence of this is already evident in the variety of new models entering the market. For the quarter that began in early 2022 4.64 percent of new vehicle registrations were EVs, and 7.18 percent of them were hybrids according to Experian’s report on automotive market trends. This made for a 60.4 percent increase for EVs in one quarter in 2022, and a 10.7 percent growth for hybrids. Cost to own electric vs. gas-powered cars Although the initial cost of the next car is crucial, you must also understand the expense of maintaining and keep the car for the lifetime of ownership. Look at the five-year cost-to-own comparision for two popular sedans , as per Edmunds. The first model, the 2022 Chevrolet Bolt EV, comes with a price tag of $31,955 and comes with a huge capacity, spacious cabin, and well-rated handling. The other, a 2022 Mazda 3, is a well-known gas-powered model with a price tag of $24,115. Both offer a premium interior as well as a smooth ride. a turbocharged engine. Think about how the costs accumulated over five years of car ownership influence which vehicle 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
The true cost of owning
$25,522
$31,277 Fuel On a basic scale, driving an electric vehicle means the end of having to fill up at petrol stations. A study conducted in 2020 it was found that EV owners spend an average of 60 percent less money to fuel their cars. The cost difference of gasoline between Chevy and the Mazda is even steeper than that average. However, getting the power you need to charge your electric vehicle isn’t as simple as choosing regular middle-priced or high-end. Electric vehicle charging is broken down into three different options that carry different costs and benefits. Level one charging. The most common method of charging and is accessible via the same outlet you would charge your phone using. They are the least efficient charging options and offer up to five and two miles charging per hour. Level two charging. These chargers, typically installed in garages are powered by the same electricity that your washing machine uses. You can gain between 10 and 20 miles of charge in an hour. Level 3 charging. Also called DC charging They are available in public spaces. They’re the fastest method and motorists can receive an 80 per cent charge within 20 minutes. Just as washing your machine multiple times in a row will increase your electricity bill, the additional cost incurred when charging at home can increase. This cost per month is added to the cost to install an at-home charger — which can range from $300 to $50,000 depending on the level that the charge. But keep in mind that most communities now have access to chargers, which means you do not have to shell out to install it right away. Check out , a free map of electric vehicle stations to find chargers in your area. You can finance your cargasoline or electric powered — simply apply online or in person to some lenders before settling on the green car may come with some added perks. For those who want to finance an electric car. These kinds of loans are typically offered by the credit union sector and tend to have lower interest rates than conventional auto loans. You may also qualify for , a financial incentive that is available in certain states of the U.S. You can benefit from a credit worth up to $7500, based on the state in which you reside. Insurance Insurance is an essential aspect of the ownership process that will protect you and your passengers. It follows the same method you would take to cover the standard vehicle options. It will include bodily injury, collision responsibility and comprehensive insurance. Like any other vehicle, your exact price will depend on several aspects. But, the insurance cost for an EV is typically more expensive than traditional gas-powered options. One reason could be the price of the car’s components. An accident of a minor nature could cause, for instance, in the need for a replacement battery — which can be over $15,000. Bankrate analyzed 12 vehicle models supplied by Quadrant Information Serves and discovered that, on average, premiums will be higher for electric cars. This is evident in the higher insurance costs projected for the Bolt as compared to Mazda 3. The pros and disadvantages of electrical vehicles electric vehicles may provide a drive that’s better for the environment and your wallet over the long term, but they’re not without disadvantages. Advantages of electric cars A few benefits to driving an electric car include the following: less maintenance. Electric vehicles require less trips to the mechanic, which means less money spent on costs like oil changes and brake system inspections. A lower cost for the life of the vehicle. The cost of owning a vehicle can be high, but EVs have a lower life cost. More sustainable to the planet. EVs do not release pollutants from tailpipes which is why they are more suitable for local air quality as well as overall greenhouse gas emissions. Advanced technology is available. Many newer electric car models include advanced control panels and mobile applications to manage and monitor the car. The cons of electric cars A few negatives associated with 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 costs. A fear of distance. Charging stations can be a bit scarce and far-fetched in some areas, leaving some drivers stressed while searching for a place to get energy. Faster vehicle depreciation. The deterioration of batteries and incentives for vehicles result in a rapid loss of value when it comes to electric cars. The cost of installing the charging station. If you prefer the convenience of the convenience of charging in your home installation can cost up to $50,000. Are electric cars the right choice for you? If your next set of wheels should be electric should be considered in the same way that you would pick which model or model of a traditional car is best for you.take into consideration your lifestyle and preferences. If your commute works with the available range 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 may be a great option. However, if committing to an all-electric EV is too much of a financial commitment you might want to think about an alternative, such as the hybrid or plug-in option if you’re set on buying. Hybrids and plug-ins generally be less expensive upfront and provide the savings advantages that a fully electric car does. Consider these main aspects when shopping for a car to make sure that the EV is worth the investment. The range of the vehicle If you’re accustomed to a lengthy commute to work and don’t have access to charging stations along the way or at your destination, consider the vehicle range that the car you are considering buying. The typical battery’s range will differ significantly based on the type of car. Make sure that you don’t buy a vehicle that isn’t able to easily charge for your regular outings. Access to chargers Prior to going to the dealership to browse, check for access to chargers in your neighborhood or look into the cost of installing and maintaining an in-home charging station. This involves weighing the level one, two, and three options with your needs. Your lifestyle Not only is it crucial to think about your lifestyle in terms of form but also terms of its function. EVs tend to operate differently than the ones you’re familiar with. Because they rely on regenerative braking, for instance, you will experience a slower brake but a smoother overall drive. The final result The cost to own an EV could be lower than a gas-powered option. Even with higher depreciation rates for vehicles and potentially higher insurance and financing, the less maintenance cost and the five-year period for owning an EV is a good choice. If you are a prospective car owner, it is important to consider which costs are important the most to you and whether EV will fit into your lifestyle. FAQs What is the time it takes to take to charge an electric car Based depending on the dimensions of the battery, charging could take as little as 30 minutes or 12 hours. It is recommended to recharge your electric car in smaller amounts rather than all at once in order to lessen the amount of time required to charge. What’s the price to recharge an electric car? While the specific price to charge will differ by location due to varying electric costs, the charge is determined by the available range and price per Kilowatt (kWh). In California for example, electricity averages around 18 cents for every kWh, so an EV with a range of 150 miles would be about $7 for a complete charge. How long do battery packs for electric vehicles last? Batteries found in an EV will last between 10 to 20 years before they are in need of a replacement.
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This article is written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers in navigating 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 since the end of 2021. They are passionate about helping readers gain the confidence to control their finances by providing precise, well-studied information that breaks down otherwise complicated topics into digestible pieces.
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