From tax rebates to auto loan discounts to lowering your monthly fuel costs, there are plenty of reasons to buy an electric vehicle. At the same time, electric cars, trucks and SUVs come with their own financial considerations, too. If you’re thinking about purchasing a hybrid or full-electric vehicle, here are a few financial pointers to keep in mind.
Electric and hybrid vehicle owners are now eligible for a federal tax credit of up to $7,500, although the final amount you qualify for depends on the make and model of the car. The credit applies to vehicles purchased new, or anytime after 2010. Drivers who own an all-electric model will likely qualify for the entire $7,500, but plug-in hybrid models can also net a few thousand dollars. In Massachusetts, EV drivers can also take advantage of a state rebate of up to $2,500 for an all-electric vehicle or $1,500 for a plug-in hybrid model.
Reducing your monthly gas budget is a major incentive for buying an electric vehicle. The data shows that people who drive an electric car spend approximately 60 percent less on gas as compared to those who drive a traditional vehicle. However, your exact savings will differ depending on which vehicle you drive—and you’ll also need to factor in the increased household utility bill if you’re in an electric vehicle that needs to be charged at home.
Auto Loan Discounts
Choosing to purchase an electric vehicle may qualify you for a discounted rate on your car loan, as lenders increasingly seek new ways to reward borrowers for making green decisions. HUECU, for example, offers a Green Auto Loan rate discount of 0.25% for members of the Credit Union who purchase a hybrid or electric vehicle.
Typically, it’s more expensive to insure an electric vehicle. This higher price reflects the higher value of the car, meaning that if your electric vehicle is stolen or damaged, the insurance company will be prepared to pay out what it’s worth. If you’re concerned about the cost of car insurance, consider calling up a few different providers and asking for a quote. This could also be a good opportunity to save money by bundling together your car insurance with home or renters insurance.
Repairs & Maintenance
There’s no firm agreement amongst car owners on whether it’s more or less expensive to maintain and repair an electric vehicle. EV owners don’t need to worry about exhaust, emissions or spark plug issues, but battery packs are expensive to repair and replace. In the end, your repair cost will depend on a huge number of factors: the car make, the environment where you’re driving, how many miles the car comes with if purchased used, and so on. You might speak with a local mechanic you trust and get their opinion on electric vehicles, including which makes and models they see needing the most repairs, and if there are any other issues for EV cars to be aware of while driving in your particular climate.
Many car owners make the decision to switch to electric in order to reduce their carbon footprint. It’s impossible to put a price on this particular aspect of EV ownership, but it’s safe to say that if protecting the environment is a passion, you’ll be able to make a positive impact every day by owning an electric vehicle. The US Department of Energy has an online greenhouse gas emissions calculator that can tell you more about your estimated emissions with a traditional gas-powered vehicle as compared to an electric car.