Electric cars are largely known by different factors in different circles. For environmentalists, they don’t use gasoline. For political minds, they help reduce the dependency on foreign oil by lessening the appetite for petroleum. For auto enthusiasts, they are renowned for their instantaneous torque and low center of gravity. But virtually everyone can agree that over the life of the vehicle, EVs can help save their owners money.
How exactly may not be obvious, but GoBankingRates, which offers advice and tips on personal finance among other things, compiled a list of factors that help explain how EVs can be cheaper in the long run compared to conventional internal combustion engines.
1. Commuter Costs
Plug In America estimates that the average U.S. driver could save around $1,600 per year on fuel when comparing the costs based on an average gas price of $3.53 per gallon, GoBankingRates said. In turn, those savings would cover “more than three months of auto loan payments, which average $467,” according to data published by Experian. Granted, those who have longer commutes might not be suited for today’s generations of EVs, but provided your daily commute is less than 50 miles or so, you could stand to save a lot of money in fuel savings.
2. Tax Credits and Rebates
The U.S. federal government has an incentive program that can give up to $7,500 in tax rebates for those who purchase electric vehicles in efforts to spur demand for the cars and help reduce our dependence on oil. Outside of that, various states will offer further incentives, and in some states, buyers can count on as much as $10,000 in tax incentives for going electric. This is also partially due to the inherent expensive nature of EVs (at least upfront), and makes the price difference between comparable vehicles easier to bear.
3. Maintenance Costs 35 Percent Less on EVs
This shouldn’t come as a surprise to many, but as we all know, internal combustions engines have many, many moving parts and a lot that can go wrong. Without spark plugs, transmissions, radiators, oil filters, exhausts, valves, timing belts, injectors, fuel filters, and other gasoline-specific components, there’s a lot less work that EVs require. Outside of tires, brakes, and suspension, there are few systems on electric vehicles that will require routine maintenance like an internal combustion engine will, and over time, that will save drivers a fair bit of coin. Did we mention that they don’t need regular oil changes either?
4. Electric Cars Are Coming Down in Price
Electric cars are still somewhat expensive; a Nissan Leaf costs about $22,000 at minimum after tax rebates are applied, which is considerably more than, say, a Nissan Versa Note, which costs less than $15,000 and is comparable in terms of utility and size. However, electric cars are becoming more affordable as the technology catches up to scale. The Mitsubishi MiEV, which is pictured, is the most affordable EV on the market, and can be had for well under $20,000 (though it offers less than 70 miles of range). With a $35,000-$40,000 Tesla on the way, it’s likely only a short matter of time before gasoline cars and EVs will cost roughly the same on a comparable basis. By comparison, the General Motors EV1 two-seater had a price tag of $33,995 in 1997 (though it was exclusively leased) — $50,400 in today’s dollars.
5. Less Sales Tax
GoBankingRates quoted Green Fleet Magazine as estimating the average sales tax on gasoline at about $0.50 per gallon. While saving $5.00 on a 10-gallon fill-up might sound somewhat negligible (many drivers can put in close to twice that), that can add up in a big way on a yearly basis, and even more so over the life of the vehicle. On top of the tax charged when refueling, many states — Washington among them — offer zero or less sales tax on the actual purchase of the car, in addition to the tax rebates that buyers can get on federal and state levels.
6. Less Incidental Spending
This is less of an issue since pay-at-the-pump services started being offered, but before then (and today, too), many drivers had to walk into the store itself where they are tempted with snacks, cigarettes, drinks of all kinds, trinkets, accessories, car washes, coffee, and so on. Like the sales taxes, these are negligible expenses on an isolated basis, but when the whole stop is taken out of the equation, it can have significant benefits to your bottom line over time.
7. Rising Gas Prices Simply Don’t Matter Anymore
Gas prices rose by 143.4 percent since 2000, GoBankingRates said, quoting information from the Department of Energy, which also noted that the cost of power increased by 46.9 percent. While it’s unfortunate that the rise in cost occurred at all, the fact that it has grown so considerably less on a percentage basis while the price of gasoline has taken off implies that power costs — and by definition what it will cost to charge your EV at home — are more stable and less likely to spiral out of control.