Comparing rates before refinancing your car loan is a key way to avoid leaving money on the table. Rate shopping can help you land a deal on auto loan refinancing that offers as much savings as possible, which can free up cash in your budget to spend on other…
Electric vehicles vs. gas cars: Which one comes out on top?
The choice of whether to buy EVs or traditional fuel cars is a difficult decision for many current and future car owners.
Some argue that it’s better to go with the electric option because they are eco-friendly and can save you money in the long run. However, others argue that the high initial cost of purchasing an EV makes them not worth the investment. So who’s right and who’s wrong?
The question of whether electric cars are more expensive than gas-powered vehicles is a hotly debated topic. Let’s explore the common price concerns that consumers face when it comes to choosing between the two.
Do Electric Cars Cost More Than Gas Cars?
According to Kelly Blue Book, as of November 2021, the price tag for an EV is $56,437 whereas the average price of a new car in the United States right now is $47,000.
However, many are predicting that the cost of EV ownership will eventually drop, especially as the cost of batteries decreases and dedicated production lines are introduced in automakers’ plants. By 2027, they may even be cheaper to make than traditional fossil fuel-powered vehicles.
To address the dire global warming issue, governments are starting to provide incentives for potential EV owners. In fact, new plug-in hybrids and EVs purchased after 2010 may be eligible for tax incentives of up to $7,500. It’s important to note that this credit doesn’t apply to all makes and models, so make sure your dream car qualifies for this federal tax credit. Some qualified vehicles include the BMW i8, Toyota Prius plug-in hybrid, and Nissan Leaf.
Cost to fill up: electricity vs. gas
Is it worth switching over to cleaner vehicles to save money on fuel costs? Studies show it may actually be more expensive to charge an electric vehicle than to fill up a traditional car with gas. Here’s why.
A new study from the Anderson Economic Group found that although EVs offer a wonderful driving experience, there are four hidden monetary costs that make the average cost per mile for electric vehicles more expensive than traditional (internal combustion engine) cars:
- Commercial and residential electric power costs: Commercial chargers impose kWh fees that are double or even triple the cost of charging EVs at home. And since some EV owners don’t charge their vehicles at home, their fueling costs can quickly add up.
- EV registration taxes: Since the retail price of electricity does not include taxes to build and maintain roads like the retail price of gasoline, some states have decided to impose registration tax on EVs. Texas, for example, imposes a fee between $190 to $400 on EV owners to make sure they also pay a road tax burden.
- Cost of chargers and their installation: When you buy an electric car, the manufacturer will most likely supply you with a Level 1 charger for home charging needs. But these types of chargers can take a long time to charge. This is why many EV owners often upgrade to a Level 2 charger, which charges much faster, but it’s also much more expensive. According to the U.S. Department of Energy, a Level 2 EVSE system can cost anywhere from $400 to $6,500. And that’s not including the installation which can cost an additional $600 to $12,700.
- Deadhead miles to drive to a faster charger: Charging stations are still not as prevalent in rural areas of the United States so EV owners often have to drive “deadhead miles” to access fast commercial chargers while on the road.
Anderson also pointed out how many commonly-cited studies failed to include these hidden costs in their report, and how it ultimately skewed the cost of EV charging. For example, studies like The Electric Car report found the monthly EV charging cost to be 40 euros (about $43) below the fuel costs for traditional vehicles. But the study did not take into account the fact that EV drivers often have to use more expensive commercial chargers when they’re away from their residential chargers.
So far, the data suggests electric vehicle maintenance costs less than maintenance for a gas-powered car.
A recent study by AAA found the annual cost of maintenance is around $939 for electric cars — $330 cheaper than gas-powered vehicles. According to Consumer Reports, the lifetime repair and maintenance costs of EVs are $4,600 cheaper to maintain.
Why is there such a big difference? The simple answer is, electric cars have fewer parts that can wear down or break. For example, electric cars do not need a transmission, oil filters, or spark plugs. Electric cars also have regenerative braking, which recycles energy from braking to recharge the battery, so there is less need for brake repairs. And since the battery, motor, and associated electronics require little-to-no repairs, you don’t have to worry too much about expensive maintenance costs.
One thing that has held many consumers back is a worry about how long batteries last before needing a battery replacement.
The average life expectancy of an electric car battery is about 10 to 20 years — more or less the same life expectancy as gasoline-powered cars which can last upwards of 200 thousand miles, or around 12 years.
Is It Better To Buy Electric or Gas Car?
All in all, it’s important to be practical and take your driving habits into consideration before making a choice. Some people may prefer the environmental benefits of electric cars. While others might appreciate the convenience of not having to stop at a charging station every few miles when on a road trip.
There are pros and cons to both options, so it’s important to weigh all the factors beforehand. Ultimately, the decision of whether or not to buy a gas-powered car depends on your individual needs and priorities.