Learn what buying an electric car will really set you back. Get informed on the unforeseen expenditures that can occur when purchasing this type of car.
The allure of never having to worry about filling up your gas tank may tempt you to consider switching to an electric vehicle. There are, however, some concealed expenses you should think about before committing to a new arrangement. Once you include in all the costs associated with having an electric vehicle, you’ll have a good idea of what to budget for.
The average costs of owning an electric vehicle are broken down in this guide by category, and we even cover certain charges you might have overlooked. At the conclusion, we talk about whether or not you save money by driving an electric car and how long it takes to notice these savings.
What Are The Hidden Costs of Owning an Electric Car?
The purchase price minus the available incentives is the first hidden cost of owning an electric vehicle. There is also the matter of the car’s insurance, maintenance, and repair costs. To make a well-informed investment selection, you need also consider charging expenses and depreciation.
For a deeper dive into the nitty-gritty of electric car ownership’s shadier side, read on.
1. Sale Price
There weren’t many affordable options for electric automobiles when they initially appeared on the market. Despite being more expensive than a similarly equipped gas-powered vehicle, electric vehicles (EVs) have grown more accessible in recent years.
The base price of a 2022 MINI Cooper SE is $29,900, whereas the base price of a Cooper with a gas engine is only $22,900. Furthermore, the base price of a 2022 Hyundai Kona Electric is $34,000 while the base price of a 2022 Hyundai Kona with a gas engine is only $21,300. That’s a significant gap that needs to be taken into account.
One other factor to think about is a federal tax credit for electric vehicles. Some vehicles may be eligible for the maximum $7,500 tax credit. Even though you’ll be paying it up front, if your vehicle qualifies, you’ll be able to deduct that sum from your total costs.
2. Car Insurance
Insurance premiums will also increase to reflect the larger price tag. Your premiums will go up in direct proportion to the amount your insurer will have to shell out on your behalf in the event of an accident. Insurance companies factor in the higher costs associated with working on EVs and the difficulty in obtaining replacement components for them.
You could be paying 20% or more of your monthly car payment in insurance costs. However, before you buy the automobile, you may acquire a free quote from firms so you know precisely what you’re looking at.
The electric vehicle will have lower maintenance costs than the gas-powered vehicle over time. There will be less maintenance required because fewer parts will need to be replaced. Since there is no need to change the oil or perform tune-ups, EVs can skip these scheduled maintenance checks. The suspension, tires, and brakes all need to be checked and serviced at regular intervals, so you still have some commitments to keep.
It’s also important to plan for repairs. Less maintenance is likely to be required for the EV, but the cost may be greater overall. Some of the parts and mechanics needed to fix the vehicle are hard to come by. As a result, you can expect to pay more than usual for maintenance and fixes.
Battery replacement expenses should also be included in. Since the batteries in new EVs are covered by a warranty for at least 8 years or 100,000 miles, you won’t have to give it any thought if you decide to sell your vehicle before then. It might cost you anything from $6,000 to $21,000 to replace the battery in your electric vehicle. Leasing an electric vehicle battery may cost between $50 and $150 monthly.
4. Charging Costs
Even though electric vehicles don’t use gas, they still require power to function. Battery charging at a public charging station may cost between $0.25 and $0.65 per kilowatt hour. Some charging stations are free, while others, especially those in prime locations, can cost a pretty penny. Time spent charging at a public station should be considered as well. A full charge for an electric vehicle can take up to thirty minutes, whereas a gas fill-up takes only five.
Overnight charging at home is far more cost-effective. While this is a viable option, it does necessitate the installation of charging infrastructure for the EV. How much it will cost to install a charger in your home is determined by several factors, including the type of charger you choose and any structural changes that must be done. Depending on the specifics, a Level 1 charging station could cost between $250 and $750 with installation, while a Level 2 charger could run anywhere from $500 to $2,000 plus labor.
After setting up the home charger, you’ll need to factor in the associated electricity costs. The cost of electricity varies widely across the country, averaging about $0.15 per kilowatt-hour (kWh). Charging at home every night might add $40–$75 to your monthly electricity cost. In all likelihood, this will work out to be cheaper than gas.
In comparison to a gas-powered car, the value of your EV will decrease at a far quicker rate. However, a comparable used automobile could fetch between 50 and 70 percent of its original price on the secondhand market, whereas an EV’s resale value could fall below 40 percent.
The battery is the deciding factor in price. Auto owners are aware that their vehicle’s battery will eventually need to be replaced as the vehicle matures. We’ve established that this is an outlay that can be very costly, eating up a sizable portion of your emergency fund. Because demand is not as high as with a gas-powered car, the resale value is likewise lower.
The Hidden Costs Of Electric Car Batteries
Leasing the batteries used in electric vehicles is one solution to the sustainability problem. To maximize their reuse, manufacturers can benefit from this. Despite the cheaper overall vehicle selling price, the owner will be charged a monthly fee. The monthly fee ranges from $68 to $135, depending on the vehicle and driving habits.
It’s important for those who own electric vehicles to think about the ancillary expenses associated with keeping their vehicle charged. While a home charging station is ultimately more cost-effective than using a public charging station, there is still an up-front cost involved. Location and station mobility affect infrastructure costs. Installing might cost homeowners $300 to $2,200.
According to HotCars, the average cost of a residential charge is $7. It will cost more than twice as much for homeowners to take advantage of public charging stations. In California, it will cost roughly $16 to fast charge a vehicle with a range of 150 miles.
Customers have high expectations for the range of electric vehicles. This means more expensive and bulkier batteries. Larger batteries are heavier, which reduces the efficiency and performance of the vehicle.
Does Having an Electric Car Save Your Money?
If you’re trying to save money by purchasing an EV, you could be taken aback by all these additional costs. There may be expenses in the future for which you have not planned, such as increased insurance premiums or electricity prices. It’s also possible to be taken aback by the EV’s initial purchase price, which is sometimes several thousand dollars greater than that of a similarly equipped gas-powered vehicle.
So, why do some think EVs are a good financial move? Truth be told, there are numerous methods to cut costs while using an electric vehicle. You may avoid filling up your petrol tank, which is convenient given the recent increase in gas costs. As an added bonus, it will require far less upkeep than a gas-powered vehicle. Manufacturer rebates and tax credits can further reduce the final cost of your purchase.
All of these characteristics make it simple to cut costs by switching to an EV. The savings, however, won’t become worthwhile until much later in your ownership. To avoid this, you shouldn’t invest in an EV for occasional use. To break even, you need to keep the vehicle for at least a few years. Further, you can feel good about yourself for contributing to environmental improvement, which is, after all, the primary motivation for using an EV.