Will Buying an Electric Car Save Money?

Electric Car Photograph - Do Electric Cars Save Money?

When it comes to saving money buying an electric car may be something a person considers. But is it really worth the money for the possible savings? Prices do seem to be coming down on some models of electric cars. However, it does not look as though a majority of consumers have bought into the idea of something less than pure gasoline or diesel engines.

For someone looking to get out of debt or save more money, an electric car might appear to be a good purchase. Spending much less on gasoline could potentially put more money back into the pocket of a driver. But are we really at a point yet where it makes sense to convert over to a pure electric mode of transportation?

There are many differences in opinion on making an electric car purchase to save money. Nevertheless, I am in the opinion that electric cars are just not where they need to be yet in order for me to want to buy one. Here are some of the reasons why going electric does not yet quite make sense.

Cost of an Electric Car

Initial Price

New Electric Car

Cost is the number one deterrent for buying an electric vehicle. It is estimated that buying an electric car can cost around $10,000 more than a comparable gas model. This is, of course, comparing a new model automobile. Buying new in most circumstances does not make sense for most people in the first place. If you have the cash to buy new and are in a position to do so, be aware that it will cost more for the initial purchase of an electric car compared to a similar model gasoline vehicle.

Drivers of electric cars are more likely to lease them. But leases are just a bad idea for almost everyone. Doing this ends up paying more for a car than it would have cost to purchase one. The real issue with a lease is the savings for purchasing an electric car really do not start until about 50,000 miles. Leasing for 3 years there really won’t be much savings. It may look that way on the surface, but total all of the costs and it just isn’t there.

Here are a few cost examples of purchasing a new 2019 electric car from Edmunds.

Hyundai Kona MSRP $36,450-$44650
Tesla Model 3 $35,000-$58,000

A comparable gasoline-powered car can be purchased for much less.

Honda CRV MSRP $24,350-$34,150
Toyota Camry MSRP $23,845-$34,600

Prices of electric cars are slowly starting to come down. Although, they have not yet gotten to the amount that it makes sense for a lot of people. Sure, there are tax credits available sometimes that might make up part of the extra cost. Furthermore, there is a saving in gas. But it will take several years to make up the savings difference.

Used Electric Car

Depreciation is a real issue with buying just about any automobile. Most electric cars depreciate even faster than ones that run on gasoline. This is a real factor with both buying new and used. Unless purchasing a highly collectible car, any other category depreciates at a rapid rate.

The gas-powered car will depreciate much slower in most cases than an electric car. At resale time this will make a difference. The reason electric cars fall in value more than a gas vehicle is they are not highly desirable being used. Also, battery life starts to diminish on a used electric car. Once batteries need replacement it can be very costly going into $5000 or more.

When the cost comparisons are made in favor of an electric vehicle it does not appear that depreciation is often taking into consideration. All cars will typically go down in value as they age, but electric ones fall even further.

Maintenance

There is a real valid argument to electric cars being less expensive to maintain. There is no oil to changes or spark plugs that have to be replaced. Also, things like timing belts and head gaskets won’t have issues either. Brakes will also often last longer due to the electric motor slowing the car down. However, things like wiper blades and tires will still need to be replaced.

The issue with the maintenance of an electric car that I believe not many people talk about is if there is an issue it will not be cheap. A majority of mechanics that are mom and pop shops work regularly on gas-powered cars. There may be some that will work on electric cars. However, they will not have the experience and knowledge a mechanic at the dealership has in most cases.

Electric cars can be less expensive to maintain. But if there is an issue, they can also be more costly to repair.

The truly knowledgeable mechanics for electric vehicles will most often be at the dealership. If you have ever compared the costs of maintenance at a dealership to an independent mechanic, you know there can be a big difference. Dealerships almost in all cases charge more than the corner mechanic.

I have even spoken to a few independent mechanics about working on electric vehicles. They have commented that it is not a skill that is quite yet widely learned.

Batteries

As I previously mentioned, when the batteries go in an electric car and need to be replaced it will be costly. This should not be a really big concern because most of the electric car batteries are made to run at least eight years and 100,000 miles. They do not really just fail, but their range is slowly reduced with age. As the battery gets older an electric car cannot be driven as far as it once could.

Weather is also a factor for battery life. If you live in an extremely hot or cold climate, the life of an electric car battery can be even less than normal use. This is something that should be taken into consideration with purchasing one.

Being that I am almost always in favor of buying a used vehicle, the battery degradation of an electric car and reduced range over time is a real deterrent. According to Plugincars, some owners of the Nissan Leaf are already reporting battery power loss with just 30,000-40,000 miles on their car. I have always considered a car just broken in around 50,000 miles. With an electric car battery already starting to lose power at such low mileage, it shows that the range on a charge will indeed decrease over time.

Although electric car proponents say the batteries last for 100,000 miles or more, the miles it can be driven start to diminish over time. With a comparable gas vehicle, it will still keep going the distance it needs to drive with higher mileage.

Range

Electric cars have come a long way with the range they can drive without needing a charge. A Chevy Bolt is said to get a 238-mile range with an average 240-volt nine-hour charge. This should handle any normal commute to work and around town. But what if you need to drive further?

There are more charging stations popping up around the country, but if the need comes up to drive a long distance there is an issue. It will have to be mapped out on where to pick up a charge along the way.

The issue with the range of an electric car is the accessibility of charging it. For $200-$700 a charging station can be installed at home. But what about having to drive 1000 miles across the country? Charging stations are not readily available compared to a gas station.

The freedom of being able to gas up just about anywhere is a big advantage to a gasoline powered car. If an electric car is your only car and there is a need to have to drive a long distance, there is some planning involved with having charges along the way.

Having just one vehicle as an electric one could create some real obstacles if the need arises to travel a far distance. This will cost more money out of pocket having to either rent a car or spend the money to fly. A gas-powered vehicle is more convenient with more options as of right now.

It Might Not Be Long Before an Electric Car is a Good Deal

Since more electric cars are starting to be produced, they are getting better. As technology is advanced the range of electric cars can be driven is improving. This in combination with the availability of more charging stations at some point will start to sway more buyers to purchase an electric automobile. Once these things occur and the initial price is more comparable to a gas-powered car, they will begin to become more attractive and an available option for more people.

Looking at the comparisons of an electric car compared to gasoline there are savings on maintenance and fuel with electric. Also, there are tax incentives in many circumstances. Yet, it seems at this time there is almost a wash with the extra money it costs to purchase electric. It can take several years for savings to begin. Combine the unknown cost of maintenance with the resale value of electric cars and there might not be much saved.

If purchasing an electric vehicle seems like good savings, it might just be the case if used as a second car. Running daily errands and commutes an electric car might be a good option, but having a gas-powered car in the garage would still also be a need for most people. A better option might be to buy a hybrid. These are often a little more costly than a conventional gas-powered engine, but there are some savings with still having gas convenience and range.

What is Your Opinion?

Everything I have read in the last year or so on electric cars always appears to claim savings. In spite of this, I don’t quite buy into it yet. There is evidence on savings in gas and maintenance, but I am not so sure about the total overall cost with depreciation and overall maintenance.

Even as the technology and costs of having an electric vehicle make it a better choice, electric cars may never completely replace gas powered. The oil and gas industry has a real stake in ensuring cars powered by traditional gasoline stay on the road.

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