Is It Still Smart to Buy an Electric Car While Gas Prices Are Low?

By Carrie Kirby on 9 June 2016 0 comments

With no end in sight for low gas prices, electric and hybrid cars face a harder value proposition. It can take a decade or more for some hybrids to pay for their higher price tag through fuel savings, according to the U.S. Department of Energy. (I'm looking at you, Toyota Highlander.)

So should you bother considering an electric or hybrid vehicle when car shopping? Of course, they are always going to be the better choice for the earth, but not all of us are noble enough (or wealthy enough) to pay more to do the right thing. Here are some alternative car advantages that still might turn your head in the era of cheap gas.

Cost Per Mile Is Still Lower

There are a few hybrids on the market whose fuel savings will still pay for the premium in three years or less — such as the 2016 Toyota Avalon Hybrid, which sells for $1,500 more than the regular Avalon and gets 40 miles to the gallon (compared to the standard version's 26). FuelEconomy.gov estimates that a hybrid Avalon would save you $575 on gas per year at a price of $2.30 per gallon, paying back the difference in two and a half years.

Plug-in hybrids and fully electric cars save even more at the pump, and even though you have to pay for the electricity to fuel them, it usually amounts to much less. Bonus if you can plug in your car at work and slurp up free juice all day.

Tax Incentives and Rebates

The federal tax credit of up to $7,500 for new plug-in cars is still available, and various states will kick in as well. For instance, California's Clean Vehicle Rebate Project pays you up to $6,500 to buy a new zero-emission or plug-in car. A 2016 Kia Soul electric vehicle, which sells for about $30,000, qualifies for a $7,500 tax credit and a $2,500 California rebate, making its effective price only $20,000 — not much more than a standard Kia Soul sells for.

Check with your electric utility about rebates they may offer to offset the cost of charging your vehicle, too. You may also be able to get an incentive to help pay for the cost of installing a charger for an EV or plug-in hybrid, which can cost $600–$700 for the charger, plus more for installation.

Perks

With congested freeways in the LA and Bay Areas, many Californians have purchased plug-in cars mainly for the privilege of driving in the carpool lane even when they drive alone. In addition to California, a number of other states, including Arizona, Florida, and New York, are letting alternative fuel vehicles drive in the high-occupancy vehicle lane no matter how many people are in the car. But read the fine print of your state's program before purchasing to make sure your vehicle choice is eligible and that there are still stickers available; California has already maxed out the available exemptions for some vehicle categories.

Other perks that states and municipalities are offering include inspection exemptions, free parking at meters, and registration discounts.

Less Maintenance

Plug In America, a nonprofit electric car advocate, puts it this way: "There's no engine, transmission, spark plugs, valves, fuel tank, tailpipe, distributor, starter, clutch, muffler, or catalytic converter (in an electric vehicle). So you can expect significantly lower maintenance costs."

EVs don't require oil changes, and of course, you never have to stand at a gas pump in the rain, breathing fumes and hoping you don't spill gasoline on your clothes.

Pleasant to Drive

The silent operation of EVs and hybrids in electric mode make listening to music or an audiobook on the road a dream. Many drivers also enjoy the peppy pickup of an electric engine.

Drawbacks

Let's be honest, though: If owning an electric vehicle or hybrid were perfect, everyone would already own one. For all-electric vehicles, the biggest drawback still holding buyers back is range. Most EVs top out at around 100 miles before needing to charge. A full charge takes at least four hours with the fastest chargers, meaning that most people use them mainly for commuting, and keep a gas-powered car for weekend getaways.

Hybrids don't have the range issue, but they do share another worry with EVs: battery replacement. A hybrid battery can cost $2,500 or more, and may need to be replaced at the 90,000 to 150,000-mile mark. With that in mind, it's kind of like the premium you pay for a hybrid vehicle is a recurring charge, not a one-time thing. Some carmakers are offering long battery warranties to assuage that worry. Even without a battery warranty, you should take the lower overall maintenance costs of an EV into account when calculating whether an eventual battery replacement makes the car too expensive in the long run.

Have you considered an electric automobile? What factors swayed your decision?

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