How much will you actually save with an electric car?

Electric cars drive savings at the pump and in the garage.

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Americans are coming around to the idea of electric cars, with over 200,000 purchased last year. Electric vehicles help you save at the gas pump and at the garage. High upfront costs have deterred some buyers, but government incentives and increasing charging stations have made owning an electric car affordable and manageable.

Compare how much you could actually save by going electric and whether it’s worth it for you.

What’s considered an electric car?

Electric vehicles can be pure electric, where the car is run completely from a battery.

There are combination hybrid-electric cars too. Hybrids use a combustion engine to start and then switch to electricity when the car reaches the right conditions. Plug-in hybrids use the electric battery charge first before switching to the hybrid engine.

Pure electric cars require a charge from the wall or charging station, and they also use regenerative braking to recharge the battery while driving. Hybrids charge the battery through regenerative braking and the engine alternator and don’t require you to plug them in to charge.

At the car dealer: tax savings

While the federal discount for hybrids is no longer available, you can still get the federal tax rebate on electric cars of up to $7,500.

Your state may also offer extra savings too, typically between $1,000 and $2,500. Some states offer even bigger savings, such as Utah, where you can save up to $18,000 for buying a new alternate-fuel vehicle.

Want to convert your gas-guzzler into a plug-in electric? If you live in Louisiana or Delaware, you could get a tax rebate that covers most of the cost of retrofitting any car to an electric car.

At the gas station pump: fuel savings

The average annual cost to fuel an electric car is $540, compared to $1,400 for a gas-powered car. Going electric would save $860 a year.

  • Cost per year to charge an electric car: $540
  • Cost per year to fill up a gas-powered car: $1,400

When would I break even on costs?

Does the higher price tag on electrics offset the fuel savings? That depends on your new car budget and how long you tend to keep cars before trading in.

If the average EV costs in the $30-35,000 range, and the average sedan costs around $20,000, that’s at least a $10,000 difference in upfront price. With a savings of $860 per year in fuel alone, you’d break even if you drive the car for a little more than 11 years. If you’re considering other cars in the $30,000 range like a Mini Cooper Countryman or a Nissan Maxima, you’d break even on fuel much sooner.

11 years might sound like a long time to drive the same car, but it actually matches the average time most US drivers keep a car before switching. If you keep the EV longer than 11 years, you’ll save even more. And that’s not even factoring in additional savings on car insurance and maintenance, which could see your break-even date arriving much sooner.

In the shop: savings on maintenance

It can be difficult to say exactly what the saving are on electric car maintenance costs. There’s less chance you’ll break down, and service packages are cheaper too.

Compared to gas-powered cars, EVs are more efficient in urban environments. EV engines are better at converting energy to movement, especially from a standing start. Regenerative braking uses the engine to slow the car as well as charge the battery.

Electric cars have fewer moving parts. An electric car does not need oil changes or cooling system flushes and will have much less wear on the brakes.

On the road: savings on car insurance

Electric cars and hybrids could enjoy discounts up to 10% on car insurance. Insurance providers appreciate these cars as low risk, since they tend to be safer and less likely to break down.

But watch out for other factors that could raise insurance costs for electric cars, such as a higher purchase price or more expensive replacement parts.

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Extra costs for electric cars to watch out for

The price will drop as the manufacturing capabilities of car companies improves and the price of parts decreases. It’s a case of paying a higher upfront price for lower running costs over the years.

If you’re in the market to spend $30 – $40,000 on a car, an electric vehicle can make sense. For everyone else, we’ll have to wait till the price becomes a little more affordable and charging stations are featured in every major parking lot.

Replacing an electric car’s battery

Electric cars cost less to maintain than combustion engine cars. The battery is one major electric vehicle component which is expensive and will need to be replaced after driving it for a certain period.

Batteries degrade over years, and after a decade, can only hold about half the original charge. There are tips for getting the most life from electric car lithium-ion batteries, such as keeping the charge at about 50%. However, degradation is inevitable, and electric car owners will have to deal with replacing an old battery at some point.

Electric car batteries typically have warranties for failure for either 8 years/100,000 miles or 10 years/150,000 miles, depending on your state. Batteries cost $10,000 on average to replace when out of warranty, though that number depends on your model. For example, the Nissan Leaf battery cost is typically closer to $5,000, while the Chevy Bolt can cost as much as $15,000 for a full battery replacement.

What are the pros and cons of driving an electric car?

As well as the cost savings from gas and vehicle maintenance, there are other things to consider.

  • Charging a car is cheaper than fueling it with gas or diesel.
  • Maintenance costs are typically lower for EVs.
  • Electric cars could qualify for insurance discounts.
  • Electric cars produce low or no emissions on the road if charged from a renewable source.
  • Charging stations aren’t available everywhere, limiting your road trip distance.
  • You’ll need a place to charge your car, such as a garage.
  • Electric cars cost more to buy than petrol run vehicles.
  • Replacing your EV’s battery could cost thousands out of warranty.

Bottom line

When comparing an electric car to a traditional gas-powered vehicle, the initial sticker price differences might have you thinking twice. But you’ll find savings on fuel, maintenance and car insurance that could offset the initial higher cost.

If you’re looking for a way to save money on your commuting costs while reducing your carbon footprint, an EV could be the right vehicle for you.

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