Lower repair bills and the ability to charge vehicles cheaply at home are just two of the many ways EVs can keep your car costs in check.
By Liane Yvkoff, Financial IQ contributor
The way I see it, one of the best ways to save money on car costs is to stop buying gasoline. For the six years I owned my Subaru Outback, I spent anywhere between $30 and $55 each week on gas, depending on the state of the economy and whims of OPEC.
Once my family moved to a bigger home further away from schools and shopping centers, I knew I would be driving a lot more. So, I sold the Subaru and bought a plug-in hybrid (PHEV) and a fully electric vehicle (EV). Now, my trips to the gas station have dropped to once a month, if that.
As a writer who specializes in automobile coverage, I have an inherent interest in battery-powered vehicles—but I’m far from the only person embracing these fuel-efficient options. Adoption is small but quickly growing.
In fact, many auto industry analysts are signaling an end of the “ICE age.” Nearly all major manufacturers have announced plans to scale back drastically or outright halt the production of internal combustion engines (ICE). For instance, Volvo intends to phase out gasoline-powered passenger vehicles by 2030 and except for trucks, General Motors plans to do the same by 2035.
If buying an EV is something you’re considering, here are some things to keep in mind.
Prices are likely to come down
EV sales are gaining ground, but their relatively high sticker price keeps many people from opting in. Though EVs typically run about $10,000 more than their gas powered counterparts, according to TrueCar.com you can get into a new EV, like a Nissan Leaf hatchback with 152 miles of range, for about $28,000.
It’s currently more expensive for a manufacturer to produce an electric car than a comparable gasoline-powered vehicle — with a good chunk of that cost going toward the battery. But because of decreasing battery expenses, some analysts anticipate it will cost the same to build an EV as an ICE-powered variant by 2024. This could make EVs more accessible to buyers.
Incentives abound
The federal government offers up to $7,500 in tax credits to help make an EV purchase more affordable. And several states, cities and utility companies also provide their own incentives. For instance, some state and city programs include cash rebates, tax deductions, reduced registration fees, lower tolls or access to high-occupancy vehicle (HOV) lanes. When doing your research, be sure to read the fine print on any offers. Programs may have residency requirements, income caps and restrictions on which vehicles qualify.
On the charging station front, the federal government offers a tax credit of up to $1,000 for installation and 30% off a JuiceBox home charging station. Also, ask your utility company about any incentives they may offer, as well as for details on plans with low rates.
You have charging choices
EV chargers come in different categories. When buying a vehicle, many people receive a Level 1, 110-volt cord or charger system, which can plug into most conventional household outlets. I opted to install a Level 2, 240-volt charger. It enables my vehicles to gain up to 25 miles of driving range per hour (RPH) of charging when electricity rates are at their lowest cost.
A 240-volt charger offers a faster charge, but don’t feel obligated to get one. Many drivers use a 110-volt charging cable and also charge their vehicles using public stations. Through an overnight charge, Level 1 charging can replenish to 60 miles a day in range, which is enough for most people on most days, says Chris Harto, senior policy analyst for Consumer Reports.
Costs to use public charging stations can vary from free to approximately $.50 a kilowatt, depending on the network and location. Some manufacturers also throw in charging perks when you make a purchase, such as Ford’s two-year complimentary access to the more than North American charging stations in its Blue Oval Charge Network. However, keep in mind that while access to public charging is growing, it is still largely underdeveloped outside of major metropolitan areas.
Save on repairs
Another reason to consider an EV: Consumers save on average 50% of repair and maintenance costs compared to ICE-equipped vehicles, according to Consumer Reports. This adds up to more than $6,000 in savings over the life of a vehicle. PHEVs offer similar benefits. “A plug-in hybrid only uses its gasoline engine 25% to 50% of the time, and that puts less wear and tear on the powertrain components,” says Harto.
Do your due diligence
More interested than ever in purchasing an EV? Be sure to give any vehicle a try before you buy. Take advantage of extended at-home test drives from several different manufacturers to make sure you find the right fit for your lifestyle and any commute.
At the same time, watch for changing legislation that could increase or change federal incentives for prospective EV buyers. In the fall of 2022, for example, significant changes went into effect following the Inflation Reduction Act, so make sure to do your research.
If you’re on the fence, remember that you don’t have to go all in. Most plug-in hybrids can power 50% to 75% of their driving using electricity, resulting in significant fuel savings and have a lower total cost of ownership than full battery-electric vehicles.
Interested in buying an electric vehicle, plug-in hybrid or traditional gas-powered vehicle? Here’s what to consider before you head to the car lot.
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