Owning an electric car can help cut down on gas expenses. However, the initial upfront cost has kept this part of the car market small, according to J.D. Power and Associates.
J.D. Power’s Inaugural Electric Vehicle Ownership Experience Study found that owners of all-electric vehicles pay a premium of $10,000 on average. Those who buy plug-in hybrids pay a $16,000 premium on average. When using average fuel costs, AEV owners would need an average of 6.5 years to make up for that premium, while PHEV owners need 11 years.
“The payback period is longer than most consumers keep their vehicle,” said Neal Oddes, senior director of the green practice at J.D. Power and Associates. “The bottom line that is that the price has to come down, which requires a technological quantum leap to reduce the battery type.”
Despite the high premium, many consumers choose these types of vehicles to save money on gas. According to the study, 45 percent of respondents said the economics benefits of fuel savings draw them to electric vehicles. Owners of electric vehicles report an $18 increase in their utility bill for charging their car. However, that is offset by the $147 they would have paid for gas in the same period.
Those shopping for an electric car will need to balance the benefit between a high premium and lower gas cars. For people who don’t want to buy an electric car, there are ways to save money when shopping.
Shop Mid-Month, Buy End-Month
The best deals on cars typically come at the end of the month or model year of a car, according to MoneyNing. However, you want to shop in the middle of the month to avoid pushy salesmen that could force you to buy more than you need. Beginning research in the middle of the month allows you to compare multiple cars and find the best price. This could help you save money and keep you from dipping into your emergency fund because you went over budget.
Consider Buying Used
If buying a new car isn’t important, going used could save you a lot of money. According to the source, most cars depreciate 30 to 40 percent after the first two years off the lot. With most cars still in good shape after two years, you could find yourself a good deal on a nice used car.