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By: AgFed Credit Union

Welcome to AgFed Credit Union's MoneyDig blog! 

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Affordable Sustainability - All You Need to Know About Electric Vehicles

 Oct 03, 2023
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With prices still rising on just about everything, and the cost of fuel stubbornly refusing to budge, electric vehicles (EVs) are more popular than ever. The idea of never having to pay for gas again is awfully tempting to the average cash-strapped American, but those cars don’t come cheap! 

Of course, in addition to the anticipated savings on fuel, EVs offer their owners a clean, emissions-free ride. 

Let’s take a closer look at EVs, their initial and ongoing costs, and factors to consider before springing for this expensive, but environmentally friendly, car. 

How much do EVs cost? 

EVs come in a wide range of prices, with the Chevy Bolt starting at just $26,500 and BMW’s M60 xDrive, arriving this fall, going for a whopping $85,095. Prices on EVs are based on their range, or how far they can drive on a single battery charge, as well as their durability, performance, styling and size. In general, as with most cars, you get what you pay for and the more expensive EVs will last longer and perform better than their cheaper counterparts. 

Many EV owners have taken advantage of government incentives to help cover the cost of their vehicle. With a chunk of the price covered by Uncle Sam, the EV becomes much more affordable. Plus, many states also offer their own tax credits, rebates, reduced registration fees and access to carpool lanes. 

In addition, many corporations and businesses are promoting EV adoption by incorporating electric vehicles into their fleets. This not only showcases their commitment to sustainability but also encourages consumers to follow suit.

Finally, there’s good news coming for EV pricing. Manufacturers are bringing down their prices as battery technology improves. Prices on Tesla and Ford, for instance, have already dropped in 2023, and more models are expected to get cheaper with time. 

Electric vehicle maintenance

In general, EVs have a lower maintenance cost than their gas-powered cousins. According to Consumer Reports, an owner of an EV can expect to save more than $6,000, on average, over the lifespan of the car relative to a traditional vehicle. Lots of common maintenance issues for cars, such as replacing or repairing spark plugs, transistors and oil, are irrelevant to EVs. This translates into easier and less expensive maintenance for electric vehicles across the board. 

Electricity costs

While one of the primary draws of EVs is the monthly savings on fuel costs, keeping your EV running will not be completely free. You’ll need to pay for the electricity it costs to run your car, and with prices rising on all commodities – energy included – it can cost a pretty penny. It’s hard to put an exact price tag on charging an EV, though, as energy costs will vary by state and are always fluctuating. However, it’s good to make note of these cost-saving energy measures:

  • Charging your EV overnight or on the weekend will cost you less than charging it during weekday afternoons and/or evenings. 
  • Some utility companies offer special plans for EV owners. It’s worth a call to find out if there are any savings available to you before buying an EV.
  • It’s best not to charge your battery to 100% unless absolutely necessary (such as before a long trip with few charging stations along the way), as this can degrade the battery and cause a negative charge.

Will I qualify for a tax incentive for my electric vehicle?

The government incentive of $7,500 for EVs has prompted thousands of buyers across the country to make the leap toward electric-powered cars. But the good times are running out and many car models are no longer eligible for the full federal incentive. To see if your chosen car makes the cut, check out the IRS’s most recently updated list of vehicles that qualify for the incentive program. Expect this list to grow shorter as strict criteria for manufacturers, including a supply chain based in North America, makes it difficult for car makers to keep their vehicles on the coveted list. 

Another way to check tax credit eligibility for a specific car is by looking up the vehicle’s identification number (VIN) on the Energy Department’s website

Before ruling out a tax incentive, be sure to check for any additional cuts or rebates from your state government. Lots of states are offering their own incentives for going electric, and it’s best to do your research before paying for an EV to ensure you’re getting all the credits and rebates you possibly can. 

Is it a good time to buy an electric vehicle?

The jury is out on this one, as consumers are eager to start saving on fuel costs, but sky-high prices on EVs drive them back to traditional car sales. The promise of newer, more updated EVs is also keeping buyers waiting for something better. Finally, energy is at a record high now, so keeping an EV running now won’t be cheap. There’s no telling where the market will go, though, so it’s anyone’s guess if prices will really fall enough to justify a wait. 

Electric vehicles are growing increasingly popular as consumers seek creative ways to balance their budgets during times of sky-high prices. Use this guide to make an informed decision that may benefit your wallet, and the environment, too. 

Your Turn: Have you purchased or are considering purchasing an electric vehicle? Tell us about it in the comments!

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