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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 assisting readers in navigating the details of borrowing money to buy cars. 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 the confidence to take control of their finances by providing concise, well-studied facts that break down complicated topics into bite-sized pieces. The Bankrate promise
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Therefore, this compensation may affect the way, location and in what order items appear within listing categories in the event that they are not permitted by law. This is the case for our mortgage home equity, mortgage and other home loan products. Other factors, like our own rules for our website and whether a product is available in your region or within your personal credit score could also affect the way and place products are listed on this website. We strive to offer a wide range offers, Bankrate does not include information about every financial or credit item or product. One in four consumers who are considering buying a new car is buying a hybrid or electric vehicle similar to the traditional gas-powered vehicle as per (KBB). And choosing electric vehicles -- or any alternative fuel vehicle could prove worthwhile for your pocket and the environment. But before setting out to the dealership it is sensible to consider electric vehicles and be aware of the differences in terms of cost. What exactly is an electric vehicle? EVs have been exploding in popularity in recent years particularly as awareness of climate-related issues continues to evolve. This, along with the high cost of gas has caused drivers to save money by going electric. Instead of the usual gas-powered vehicles on the roads and in parking lots, EVs have a motor that is powered by a battery. There are three kinds of electric vehicles. Electric hybrid vehicles (HEVs) are powered by an electric motor and an internal combustion engine HEVs have the power of a gas-powered traditional vehicle with the benefit of improved efficiency in fuel consumption. There is no charge for an HEV the same way as the EVs it is compared to, however batteries are charged through the engine. There is a wide range of makes and models of HEVs that are available in the marketplace. The top-rated models as per KBB include the Honda Accord Hybrid, the Toyota RAV4 Hybrid and the Hyundai Elantra Hybrid. Plug-in hybrid electric vehicle (PHEVs) A plug-in hybrid is exactly as it sounds it is a hybrid vehicle can be charged by plugging it into. It is powered through batteries inside the vehicle that is charged through the external cables. They also make use of another fuel, usually gasoline for powering the internal combustion engine (ICE). This kind of vehicle utilizes an electric battery until it is used up and then taps into it's ICE capabilities. Options for PHEVs are a bit slimmer, but KBBs standout options are those of the Ford Escape SE Plug-in Hybrid, the Hyundai Tucson Plug-in Hybrid, and the Kia Niro Plug-in Hybrid. Fully electric vehicles (EVs) A fully electric vehicle increases the quality and is powered completely by an electric motor -there is no ICE or alternative fuel source involved. These have a battery pack which powers the vehicle. It is charged in the same method to PHEVs. Electric vehicles are charged using an outlet that is specifically designed for them. Although charging stations can be accessible locally, it's crucial to consider the additional cost for a station to charge if considering a full EV. KBBs favorite fully EV options include the Chevrolet Bolt EV, the Nissan Leaf and the Ford Mustang Mach-E. The cost of electric vehicles vs. gas vehicles Before you dive headfirst into the world of electric and hybrid cars it is essential to know the differences in price between electric and gas. Although driving an EV may have lower overall costs but the initial price can still serve as an obstacle for some. Recently, purchasing a brand new car is costly regardless of the source of power. July 2022 was a record month for average prices for transactions on new cars of more than $48,000, as reported by . However, the cost for an EV is still more expensive than a gas-powered option. According to the KBB estimates for an EV is over $60,000 -- which aligns with an average luxury car price. It is expected that by the EV market will reach 40 percent by 2031 according to . This prediction is supported by the increasing number of vehicles entering the market. It is a good thing that this rise in EV availability acts as an equalizer. As more drivers consider purchasing electric vehicles their costs will drop. The evidence of this is already evident in the variety of new options that are coming onto the market. For the quarter that began in early 2022 4.64 percent of all new vehicle registrations were electric vehicles, while 7.18 per cent were hybrid vehicles, according to Experian's report on the automotive market trends. This resulted in a 60.4 percent increase 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 cars While the initial cost of purchasing your next vehicle is important you should also consider the expense of maintaining and maintain the car over the life of ownership. Take a look at the cost-to-own analysis for five years for two top cars, according to Edmunds. The first, the 2022 Chevrolet Bolt EV, comes in at $31,955 MSRP . It offers a wide range, spacious cabin and an excellent handling rating. The second, 2022's Mazda 3, is a popular choice for gas powered vehicles with a price tag of $24,115. It comes with premium interiors as well as a smooth ride. an engine that is turbocharged. Take into consideration how the costs accrued over five years of vehicle ownership influence which vehicle you'd 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 At the most basic scale, driving an electric vehicle will mean the end of having to fill up at petrol stations. A study conducted in 2020 discovered that EV owners spend on average 60 percent less money to fuel their vehicles. The price difference for fuel between the Chevy as well as the Mazda is more significant than the average. However, getting power for your EV is not so simple as picking regular, midgrade or high-end. Electric vehicle charging can be broken down into three options that all carry different costs and benefits. One charging. The most commonly used form of charging and is accessible via the same outlet you would charge your smartphone using. They are the least efficient charging options that provide up to five and two miles charge per hour. Level two charging. These chargers, which are typically placed and located in your garage are powered by the same electricity as your washing machine. You can gain 10 to 20 miles of charge in just one hour. Level 3 charging. Also known as DC charging, these are available in public settings. They're the fastest option and drivers can receive the full charge of 80 percent in just 20 minutes. Just as running your washing machine several times in a row can cost you more electricity The additional expense from charging at home can add up. The ongoing expense is on top of the cost to install an at-home charger that could range from $300 to $50,000 dependent on the capacity of charge. However, keep in mind that many communities are now equipped with chargers, meaning you might not have to shell out for installation immediately. Check out , a free map of EV stations to see chargers in your area. Financing Although you can -- electric or gas powered -- just by applying 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 an electric car. These kinds of loans are usually offered through a credit union , and tend to offer lower rates of interest 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 amounting up to $7500, based on the state in which you reside. Insurance Insurance is a vital part of the ownership process that will protect you as well as your family members. This policy follows the same route you would take to cover the traditional vehicle option. It will include collision, bodily injury, responsibility and comprehensive insurance. And as with any vehicle, your exact price will be determined by various variables. But, insurance for an EV generally costs more than conventional gas-powered alternatives. The reason for this is due to the cost of the vehicle's parts. A minor accident can cause, for instance in the requirement for a replacement battery -- which can cost upwards of $15,000. Bankrate examined 12 car models supplied by Quadrant Information Serves and found that, on average, premiums will be 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. Pros and disadvantages of electrical cars EVs can provide a ride that's better for the environment and your pocket in the long term however, they're not without negatives. Advantages of electric cars A few advantages of driving an electric car are less maintenance. Electric vehicles require fewer visits to the mechanic, and that can result in less money spent on costs for oil change and brake system checks. Costs are lower over the lifetime of the vehicle. Car ownership can be costly, but EVs carry a lower lifetime cost. More sustainable to the planet. Electric vehicles do not emit pollutants from the tailpipe, making them more beneficial for the local air quality and overall carbon dioxide emissions. Advanced technology available. The latest models of electric cars have advanced control panels and mobile applications to manage and monitor the car. The cons of electric cars A few drawbacks that come with driving an EV include: Higher purchase cost. On average, buying an EV carries a steeper price upfront, averaging $12,000 more, according to KBB's average July 2022 transactions prices. Range anxiety. Charging stations can be few and far-fetched in some locations, leaving drivers feeling stressed when searching for a location to charge their energy. Faster vehicle depreciation. Battery deterioration and vehicle incentives create quick value loss for electric cars. Cost to install a charging station. If you prefer the convenience of charging in your home the installation could cost as much as $50,000. Are electric vehicles the best choice for you? If your next set wheels is electric, it should be considered similarly to how you'd choose the model or design of a classic car is right for you -- focus on your lifestyle and preferences. If your commute is compatible with the range that an EV offers or if you like the sleek design and environmental advantages, then an electric vehicle may be a great option. If however, jumping into an all-electric EV is too much of a financial investment, you may want to consider the option of a hybrid or plug-in if you're set on buying. Hybrids and plug-ins generally cost less upfront , but still provide the savings advantages that a fully electric car can offer. Take note of these key factors when shopping to ensure that you're choosing an EV is worth investing in. The range of your vehicle If you're on a long commute and aren't able to access chargers along the way as well at the destination you are heading to, take into consideration the range of the vehicle that the car you are considering buying. The typical battery's range will differ significantly based on the model. Make sure that you don't purchase a car that you cannot easily keep charged to go on your daily excursions. Access to chargers Prior to going to the dealership to browse, check for access to charging stations in your region or look into the cost of the installation and maintenance of an at-home charger. This means weighing the level one, two and three options according to your needs. Your lifestyle. Not only is it crucial to think about your life style in terms of appearance but also as a terms of its function. EVs tend to operate differently from what you are accustomed to. Because of its dependence on regenerative braking, as an instance, you will experience slower brakes, but a more smoother overall experience. The bottom line The true cost of owning an EV is less than a gasoline-powered vehicle. Even with higher depreciation rates for vehicles and potentially higher insurance and financing, the lower maintenance costs and the five-year time frame to own an EV is a good choice. As a car buyer it is crucial to consider which costs are important the most to you and if EV is compatible with your lifestyle. FAQs What is the time it takes to take to charge an electric car Depending on the size 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 increments instead of all at once in order to decrease the time to charge. What is the cost to charge an electric car? The exact cost for charging will vary based on location due to varying electricity costs, the price is based on the range available and cost per kilowatt (kWh). In California for example electric power is typically 18 cents per kWh, so an EV with a range of 150 miles would cost between $7 and $7 for a full charge. How long do the batteries in electric cars last? The batteries 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 with the details of borrowing money to purchase cars. Written 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 the confidence to control their finances by providing clear, well-researched facts that break down otherwise complex topics into manageable bites.
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