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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 specializes in assisting readers to navigate the ins and outs of securely taking out loans to buy an automobile. Written 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 take control of their finances through providing precise, well-researched and well-studied facts that break down complicated topics into bite-sized pieces. The Bankrate promises
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If you have questions about money. Bankrate has answers. Our experts have been helping you manage your money for over four decades. We are constantly striving to give our customers the right advice and tools needed to succeed throughout life’s financial journey. Bankrate adheres to a strict code of conduct , so you can trust that our content is honest and precise. Our award-winning editors and reporters produce honest and reliable content that will 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 open about the ways we’re able to bring quality content, competitive rates and helpful tools for you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or through you clicking certain hyperlinks on our website. So, this compensation can influence the manner, place and in what order items are displayed within the categories of listing, except where prohibited by law. This is the case for our mortgage, home equity and other home loan products. Other factors, like our own proprietary website rules and whether or not a product is available within your region or within your self-selected credit score range can also impact the way and place products are listed on this site. Although we try to provide a wide range offers, Bankrate does not include details about every credit or financial products or services. One-in-four new car shoppers now consider purchasing an or hybrid just as they would with the traditional gas-powered vehicle as per (KBB). The choice of electric — or an alternative fuel vehicle can prove to be worthwhile for both your wallet as well as the environment. However, before you go to the dealership it is recommended to research electric car options and understand the difference in cost of ownership. What is an electric car? EVs have been exploding in popularity in recent years particularly as awareness of the environmental issues continues to evolve. This, along with rising gas prices, has led to drivers looking to save money driving electric. Instead of the usual gas-powered vehicles that line the highways and parking areas, EVs have a motor that is powered by a battery. There are three types that are electric cars. Hybrid electric vehicles (HEVs) powered by an electric motor and the internal combustion engine HEVs boast the strength of a traditional gas-powered vehicle but with the added benefit of better performance and fuel efficiency. There is no charge for an HEV as you would with its EV counterparts but rather it charges the battery through the engine. There is a wide range of brands and models of HEVs available in the marketplace. The top-rated models as per 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 you plug in to charge. It is powered by an internal battery within the vehicle that is recharged by the external cables. They also make use of another fuel, usually gasoline, to power the internal combustion engine (ICE). The vehicle makes use of the electric charge until it is consumed and then taps the ICE capabilities. The choices for PHEVs can be less limiting, however KBBs standout options include those of the Ford Escape SE Plug-in Hybrid as well as the Hyundai Tucson Plug-in Hybrid as well as the Kia Niro Plug-in Hybrid. Electric vehicles that are fully electric (EVs) The fully electric vehicle is a step up and is powered completely with an electric motorthere is no ICE or alternative fuel source involved. These vehicles have a battery pack that powers the vehicle . It is charged in the same method to PHEVs. They are charged via an outlet that is specifically designed for them. Although charging stations can be located in the local area, it is crucial to consider the additional expense of a charging station if considering a full EV. KBBs favorite fully EV choices are the Chevrolet Bolt EV, the Nissan Leaf and the Ford Mustang Mach-E. Cost of electric vs. gas cars Before diving headfirst into the world of hybrid and electric cars, it is essential to know the differences in price between electric and gasoline. While it is true that driving an EV will have less overall cost, the upfront price tag is an obstacle for many. In recent times, purchasing a new car can be expensive regardless of its power source. July 2022 saw record-breaking price for new cars that exceeded $48,000, according to . However, the cost for an EV is higher than that of a gasoline-powered vehicle. According to the KBB estimates for an EV exceeds $60,000which is in line with the average price for a luxury car. It is expected that to be that the EV market will reach 40 percent by 2031, according to . This estimation is supported by the increasing number of vehicles entering the market. This increase in EV availability is an equalizer. As more drivers consider purchasing electric vehicles their costs will go down. This growth is already clear in the number of new options that are coming onto the market. The first quarter in 2022, 4.64 percent of new vehicle registrations were electric vehicles, while 7.18 percent of them were hybrids as per Experian’s report on automotive market trends. This made for a 60.4 percent growth for EVs over one quarter in 2022, and the same for hybrids, with a 10.7 percent growth for hybrids. Cost to own electric vs. gas vehicles While the initial cost of your next vehicle is important you must also understand the expense of maintaining and maintain the car over the course of its ownership. Look at the five-year cost-to-own comparision for two popular sedans according to Edmunds. The first, a 2022 Chevrolet Bolt EV, comes with a price tag of $31,955 and has a large range, spacious cabin and a well-rated handling. The other, a 2022 Mazda 3, is a popular gas-powered option with a lower MSRP of $24,115 that offers premium interiors as well as a smooth ride. an engine that is turbocharged. Think about how the costs accrued over five years of vehicle 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 no more trips to the gas station. A study conducted in 2020 found that EV owners will spend on average 60 percent less to fuel their cars. The cost difference of fuel between the Chevy as well as the Mazda is even steeper than that average. But getting power for your electric vehicle isn’t as simple as choosing regular middle-priced or premium. Electric vehicle charging can be divided into three options that all come with different costs and advantages. One charging. This is the most commonly used form of charging and is accessible through the same outlet you would charge your smartphone with. They are the least efficient charging options that provide anywhere between 2 and 5 miles charging per hour. Level two charging. These chargers, typically installed and located in your garage utilize the same power as your washing machine. It is possible to gain between 10 and 20 miles of charging in just an hour. Level 3 charging. Also called DC charging They are available in public spaces. They’re the most efficient method and motorists can receive the full charge of 80 percent in only 20 minutes. Just as running your washing machine several times in succession will increase your electricity bill, the additional cost incurred when charging at home can increase. This cost per month is added to the initial cost to set up an at-home charging station that can vary from $300 to $50,000 dependent on the capacity of the charger. However, keep in mind that many communities now have access to chargers, so you may not be required to pay for installation right away. Take a look at the free map of electric vehicle stations to see chargers in your local area. Finance Although you are able to finance a car- electric or gas powered — apply online or in person with a few lenders before picking the green car may come with additional benefits. For those who want to finance an electric car. These types of loans are typically found through a credit union and generally offer lower rates of interest than conventional auto loans. You could also be eligible 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 your home state. Insurance Insuring your car is a vital part of the ownership process that will protect you along with your passengers. carries the same approach you would take to cover the standard vehicle options. It will cover bodily injury, collision responsibility and comprehensive insurance. As with all vehicles, your exact price will be based on a variety of aspects. But insurance for an EV is typically more expensive than traditional gas-powered options. One reason could be the price of the vehicle parts. A minor accident could result, for example, in the need for a replacement battery which could be over $15,000. Bankrate looked at 12 models of vehicles supplied by Quadrant Information Serves and discovered that, on average, premiums will be higher for electric vehicles. This is evident by the higher insurance rates projected for the Bolt over the Mazda 3. Pros as well as cons for electric vehicles electric vehicles may provide a drive which is healthier for the planet and your pocket in the long run however, they’re not without disadvantages. The advantages of electric vehicles Some benefits to driving an electric car are the following: less maintenance. Electric cars need fewer trips to the mechanic, which can mean lower costs for expenses, such as oil changes and brake system inspections. A lower cost for the life of the car. Car ownership can be costly however EVs carry a lower lifetime cost. More sustainable environmentally. EVs do not release pollutants from tailpipes and are therefore more suitable for local air quality as well as overall emission of greenhouse gases. Modern technology is can be found. Many newer electric car models come with advanced control panels as well as mobile apps to control and monitor the car. The cons of electric cars A few disadvantages of driving an electric car include: Higher purchase cost. In the average, purchasing an EV comes with a higher price upfront, averaging $12,000, as per KBB’s July 20, 2022 average transaction costs. The fear of range. Charging stations can be a bit scarce and far-fetched in some locations, leaving motorists feeling anxious when looking for a place to get power. Faster vehicle depreciation. The deterioration of batteries and incentives for vehicles create quick value loss when it comes to electric cars. The cost of installing a 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 of wheels is electric, it should be considered in the same way that you’d choose the model or design of traditional vehicle is best for you.be aware of 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 electric car may be a great option. But if jumping into a full EV is too much of a financial commitment, you might want to think about the option of a hybrid or plug-in when you’re planning to purchase. Hybrids and plug-ins generally be less expensive upfront and offer the same money-saving advantages that an electric car can offer. Take note of these key aspects when shopping for a car to make sure that you’re choosing an EV is worth your investment. The range of the vehicle If you’re on a long commute to work and don’t have access to charging stations on the way or at your destination, think about the range of the car you are considering buying. The typical battery’s range will differ significantly based on the car model. Be careful not to purchase a car you cannot easily keep charged to go on your daily excursions. Access to chargers Before going to the dealer to look around look for chargers in your neighborhood or think about the expense of the installation and maintenance of 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 life style in terms of appearance but also as a the way of function. Electric vehicles tend to function differently than what you may be used to. Due to its reliance on regenerative braking, as an instance, you could expect slower brakes but more smoother overall experience. The final result The cost to own an EV can be less expensive than an alternative powered by gas. Even with steeper vehicle depreciation as well as higher insurance costs and financing costs, the lower maintenance cost and the five-year period for owning an EV makes it a promising option. As a car buyer it is crucial to decide which expenses matter the most to you and whether EV will fit into your lifestyle. FAQs How long does it take to charge an electric vehicle? Based depending on the dimensions of the battery, the process can take as few as 30 minutes or as long as 12 hours. It is recommended to fill up your EV in smaller amounts instead of all at once in order to lessen the charge time. What’s the price to charge an electric car? While the exact price to charge will differ by region due to the different electricity costs, the price is determined by the range available and cost per Kilowatt (kWh). In California for instance the average electricity price is 18 cents for every kWh, therefore an electric vehicle with a 150-mile range would fall somewhere around $7 for a full charge. What is the length of time electric car batteries last? The batteries found in an EV will last between 10 and 20 years until 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 specializes in assisting readers to navigate the details of borrowing money to purchase an automobile. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate from late 2021. They are passionate about helping readers gain confidence to manage their finances with concise, well-researched and well-organized facts that break down complicated topics into digestible pieces.
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