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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 details of 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 committed to helping readers gain the confidence to manage their finances by providing precise, well-researched and well-studied facts that break down complicated subjects into digestible pieces. The Bankrate promise
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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. This is the case for our mortgage or home equity products, as well as other home loan products. Other elements, such as our own rules for our website and whether the product is available within the area you reside in or is within your self-selected credit score range could also affect the manner in which products are featured on this website. While we strive to provide a wide range offers, Bankrate does not include details about every credit or financial product or service. One in four consumers who are considering buying a new car is buying a hybrid or electric car similar to gasoline-powered vehicles, according to (KBB). The choice of electric vehicles — or any alternative fuel vehicle — is a good idea for your pocket and the environment. However, before you go to the dealership , it’s sensible to consider electric vehicles and know the difference in cost of ownership. What is an electric car? The EV market has been growing in popularity over recent years and especially as the understanding of climate-related issues is growing. This, in conjunction with rising gas prices, has resulted in drivers seeking to save money driving electric. Unlike the typical gas-powered vehicles on the roads and in parking lots, EVs have a motor which is powered by batteries. There are three kinds of electric vehicle. The hybrid electric vehicle (HEVs) are powered by an electric motor as well as an internal combustion engine, HEVs have the power of a traditional gas-powered vehicle and the benefits of improved fuel economy. You do not charge an HEV as you would with its EV counterparts but rather the battery is charged through the engine. There are a large variety of brands and models of HEVs available on the market. Some highly rated options according to KBB include that of the Honda Accord Hybrid, the Toyota RAV4 Hybrid and the Hyundai Elantra Hybrid. Plug-in hybrid electric vehicles (PHEVs) A plug-in hybrid is exactly as it sounds it is a hybrid vehicle is charged through a plug. It is powered through a battery pack inside the vehicle and recharged via an external cable. The PHEVs can also utilize other fuels, typically gasoline, to power an internal combustion engine (ICE). This kind of vehicle utilizes an electric battery until it’s consumed and then taps the ICE capabilities. The options for PHEVs are less limiting, however KBBs standout options are that of Ford Escape SE Plug-in Hybrid as well as the Hyundai Tucson Plug-in Hybrid as well as the Kia Niro Plug-in Hybrid. Fully electric vehicles (EVs) Fully electric vehicle is a step up and is powered completely by an electric motor — no ICE or additional alternative fuel sources are required. These vehicles have a battery pack which powers the vehicle. It is charged in the same manner to PHEVs. EVs are charged through an outlet designed specifically for them. While charging stations can be found locally, it is crucial to consider the additional costs of a charging station, if you are considering a full EV. KBB’s top fully electric choices include those like the Chevrolet Bolt EV, the Nissan Leaf and the Ford Mustang Mach-E. Cost of electric as compared to. gas cars Prior to diving headfirst into the world of hybrid and electric cars, it is important to understand the price differentiation between electric and gas. While driving an EV may have lower overall costs but the initial price is an obstacle for some. Lately, buying a new car can be expensive regardless of its source of power. July 2022 saw record-breaking average transaction prices for new cars of more than $48,000, according to . However, the price of an EV is higher than that of a gasoline-powered vehicle. It is estimated by KBB estimates for an EV is more than $60,000- which aligns with an average price for a luxury car. But it is forecasted to be that the EV market to reach forty percent in 2031, according to . This prediction is supported by the increased number of vehicles that are entering the market. It is a good thing that this growth in EV availability is an opportunity to equalize. If more people are considering purchasing electric vehicles, the average cost will decrease. The evidence of this is already evident by the increasing number of new options that are being introduced to the market. For the quarter that began in early 2022 4.64 percent of new car registrations were for electric vehicles, and 7.18 per cent were hybrid vehicles, according to Experian’s report of automotive market trends. This resulted in a 60.4 percent increase for EVs over first-quarter 2022, and the same for hybrids, with a 10.7 percent increase for hybrids. Cost of owning electric vehicles vs. gas-powered cars Although the upfront cost of your next vehicle is important it is also important to consider the cost to maintain and keep the car for the course of its ownership. Take a look at the cost-to-own analysis for five years of two popular sedans , as per Edmunds. The first is a 2022 Chevrolet Bolt EV, comes in at $31,955 MSRP . It has a large range, spacious cabin and a well-rated handling. The secondmodel, 2022’s Mazda 3, is a popular gas-powered option with a price tag of $24,115. Both offer premium interiors with a smooth and comfortable ride as well as turbocharged engines. Take into consideration how the costs accumulated over five years of ownership influence which vehicle you’d like to purchase. 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 the most basic level, driving a fully electric vehicle will mean no more trips to petrol stations. A study conducted in 2020 it was found that EV owners will pay on average 60 percent less to fuel their cars. The difference in cost of gasoline between Chevy or the Mazda is more significant than the average. But getting power for your EV is not easy as simply choosing standard, midgrade or high-end. Electric vehicle charging is broken down into three different options that carry different costs and benefits. The first option is charging at a level one. This is the most commonly used form of charging and is accessible via the same outlet you would charge your cellphone with. They are the most slow charging options and offer up to five and two miles charge per hour. Level two charging. These chargers, typically installed in garages, use the same power that your washing machine would. It is possible to gain up to 20 miles charge in just one hour. Level 3 charging. Also called DC charging, these are available in public areas. They are the quickest alternative and users can get an 80 per cent charge within 20 minutes. Just as washing your washer several times in succession will increase your electricity bill and the extra cost from charging at home can be significant. The ongoing expense is added to the initial cost for installing an at-home charger — which can range from $300 to $50,000 dependent on the capacity that the charge. But keep in mind that many communities have access to chargers, meaning you might not have to shell out for installation right away. Visit a free EV station map, to find chargers in your region. Financing Although you can -gasoline or electric powered — just by applying online or in person to some lenders before settling on the best option, financing a green car may come with additional benefits. For those who want to finance electric cars. These types of loans are typically found through a credit union and typically offer lower rates of interest than traditional auto loans. There is also the possibility of qualifying 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 Insuring your car is an essential part of ownership that protects yourself as well as your family members. It follows the same method you would take to cover a conventional vehicle option. It will include bodily injury, collision insurance coverage, and liability. Like any other vehicle the price you pay will be determined by several factors. But, the insurance cost for an EV will typically cost more than gas-powered options. One reason is the price of the vehicle’s parts. An accident of a minor nature could result, for example, in the need for a battery pack replacement which could cost more than $15,000. Bankrate looked at 12 models of vehicles supplied by Quadrant Information Serves and discovered that, on average, premiums will be more expensive for electric cars. This is evident by the increased insurance cost projected for Bolt over the Mazda 3. Bolt as compared to Mazda 3. Pros and cons of electric cars electric vehicles may provide a drive that’s better for the environment as well as your wallet in the long term However, they do have downsides. Advantages of electric cars A few benefits to driving an electric car include the following: less maintenance. Electric vehicles require fewer visits to the mechanic, and that can result in less money spent on costs, such as oil changes and brake system checks. A lower cost for the life of the car. The cost of owning a vehicle can be high, but EVs carry a lower lifetime cost. They are better to the planet. Electric vehicles do not emit tailpipe air pollutants which is why they are better for local air quality as well as general emission of greenhouse gases. Advanced technology available. The latest models of electric cars come with advanced control panels and mobile apps that allow you to control and monitor the car. The cons of electric cars A few disadvantages of driving an electric car are: Higher cost to purchase. On average, buying an EV has a more expensive initial cost, which is close to $12,000, as per the average KBB July 2022 transaction prices. Range anxiety. Charging stations can be few and far between in some regions, which can leave motorists feeling anxious when looking for a spot to recharge their power. Faster vehicle depreciation. Vehicle incentives and battery degradation cause a quick loss of value for electric vehicles. Cost of installing the charging station. If you prefer the convenience of being able to charge at your own home, installing a charging station could cost you up to $50,000. Are electric cars the right choice for you? If your next set of wheels will be electric, it must be considered in the same way that you’d choose which model or model of a traditional car is best for you.be aware of your lifestyle and needs. If your commute is compatible with the range that an EV offers or if you like the sleek design and environmental benefits, then an EV could be an excellent choice. But if jumping into an all-electric EV is too big of a financial commitment, you may want to consider , or opt for an electric or hybrid if you’re set on buying. Hybrids and plug-ins generally cost less upfront and still provide the savings advantages that an electric vehicle does. Take note of these key factors when shopping to ensure that the EV is worth the investment. The range of your vehicle If you have a long commute to work , and do not have access to charging stations on the route and at the point you want to go, think about the range of the vehicle that the car you are considering buying. The battery’s range of use can differ significantly based on the model. Be careful not to purchase a car can’t be easily charged to go on your daily excursions. Chargers available before heading to the dealership to shop look for chargers in your area or think about the expense of installing and maintaining an at-home charger. This involves weighing the level one, two, and three options according to your needs. Your lifestyle. Not only is it important to consider your way of life in terms of style but also terms of its function. Electric vehicles tend to function differently from what you are accustomed to. Due to its reliance on regenerative brakes, for instance, you will experience a slower brake but a smoother overall drive. The final result The cost to own an EV can be less expensive than a gas-powered option. Even with a higher rate of depreciation as well as higher insurance costs and financing, the lower maintenance and five-year cost for owning an EV can make it a viable choice. As a car buyer, it is important to consider which costs are important most to you, and whether EV fits the rest of your lifestyle. FAQs What is the time it takes to take to charge an electric vehicle? Based on the size of your vehicle’s battery, charging can take as few as 30 minutes, or up to 12 hours. The best way to go is to fill up your EV in smaller increments instead of all at one time to reduce the charge time. What is the cost to recharge an electric car? While the exact price to charge will vary 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, electricity averages around 18 cents per unit so an EV that has a range of 150 miles will fall somewhere about $7 for a complete charge. What is the length of time the batteries in electric cars last? Batteries found in an EV can 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 is a specialist in helping readers in navigating the ins and outs of securely borrowing money to purchase cars. 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 confidence to manage their finances by providing concise, well-researched and well-organized details that cut complex topics into manageable bites.
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