Now may not be the best time to purchase a new (or frankly used) vehicle due to record high sticker prices and record low dealer stock. But if you are in the market (and best of luck to you if so!) for a new car, truck, or SUV and can’t wait for manufacturer-suggested retail prices (MSRPs) to drop, it might be time to consider buying electric.
Recent research from the climate policy think tank Energy Innovation Policy and Technology LLC found that electric vehicles are cheaper to buy and maintain monthly than their fossil-fueled counterparts — in almost every state — right off the lot. The report states that most new EVs are cheaper to own from the day they are driven off the lot, even when the sticker price is considerably higher. Consumer savings are even greater if the EV incentives currently proposed in Congress are included.”
How? When determining the expense of owning an electric vehicle versus a conventional car, researchers considered what consumers look for when purchasing a new car, and it’s often not the price on the sticker.
People shopping for cars want to make sure they won't blow their monthly budget paying for and maintaining their new purchase. “What does the average consumer look at? Our research is mostly focused on that question — how people purchase cars, how they finance them,” Robbie Orvis, the lead researcher and author of the study, told Bloomberg. “The day you drive it off the lot, you don’t want to spend more on an EV.”
To determine what type of car is more affordable, one that runs on gas or EV, the research team weighed the following recurring costs: state taxes and fees, state and federal rebates and tax credits, fuel costs, financing costs, maintenance costs, and insurance costs. The federal government offers a tax credit of up to $7500 for new EV purchases, and a number of states offer incentives as well.
The team found during the financing term that in most U.S. states, owning and maintaining an EV is less costly than a gas-fueled vehicle, especially now when gas prices are skyrocketing with no end in sight.
And two EV models were cheaper to own than the gas-run equivalent in every state: the electric Ford F-150, a pickup truck, and the electric Hyundai Kona SEL, an SUV. After the financing term is over and the vehicle is paid off, owning an EV is cheaper in every state.
The only catch? If you’re looking to purchase an electric car and you want to take advantage of the generous federal tax credit, you should do so soon.
The credit for two EVs — the Ford F-150 and the Nissan LEAF — is set to expire this year. Credits for other EV makes and models will be ending soon as well, as car manufacturers reach the 200,000 vehicle cap for the credit. House Democrats voted to extend the credit, but Senate Republicans have stonewalled any attempts at an extension. So if you’re looking at gas prices and dread watching the price tick up higher and higher as you fill your tank, getting into an EV now, before the tax credits expire, will definitely save you even more in the long run.