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Electric vehicles are known for being pricey, but there are ways to take the edge off that sticker shock. Here are five ways to keep EV costs down.
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Everyone knows that electric vehicles can help the environment by reducing dependence on fossil fuels, but unfortunately, we also have to think of our wallets when purchasing a new vehicle. And that’s one area where gas-powered vehicles are still winning by a mile. It costs about $2,800 more to purchase a new EV than a new gas-powered vehicle, according to Cox Automotive, and while that represents a significant drop from years past, it’s still a lot for many people.
Fortunately, there are things drivers can do to reduce the upfront and ongoing costs of owning an EV so they can purchase one now. Here are five of them.
1. Buy used
There aren’t that many used EVs on the market yet, since EVs themselves haven’t been around all that long. But some are starting to come up, and they’re significantly cheaper than new models. Before investing in a new EV, it doesn’t hurt to take a stroll through your local used car dealership lots to see if there are any used models for sale.
Buying a used EV could also help drivers save on auto insurance costs. But insurance costs will depend on the driver’s record, their location, and the vehicle make and model. It’s best to compare quotes from several top car insurance companies before settling on one.
2. Take advantage of tax credits
The federal government offers tax credits of up to $7,500 for drivers who purchase qualifying new EVs and credits of up to $4,000 for buyers of qualifying used EVs. Unfortunately, determining which models qualify is a bit of a moving target to hit. You can check them out at FuelEconomy.gov. Be sure to verify the vehicle’s eligibility before you purchase one if you want to claim the credit.
In 2023 and previous years, those who purchased EVs had to wait until they filed their tax return to claim their credit. But beginning in 2024, drivers can apply this credit to the point of sale, so it effectively reduces the sale price of the vehicle itself.
3. Consider a green auto loan
Green auto loans are available through some banks and credit unions for those seeking to purchase EVs. They offer more favorable loan terms than a standard auto loan, so drivers should pay less in interest over the long term.
Check with lenders in your area to see if any of them offer loans like this. You may want to check with some online banks as well. Compare rates from a few providers before settling on one to ensure you’re getting the best deal.
4. Get a home charging station
Putting in a home charging station means another upfront cost for EV owners — potentially thousands of dollars. But it could save drivers a lot over the long term, compared to using public charging stations. Public stations can cost drivers up to three times as much as a home charging station, according to Qmerit. But a lot depends on location and what type of charger we’re talking about.
If you can’t afford to purchase a home charger right away, consider saving up for one over time. You may also want to look for a vehicle that comes with a free charging offer. This typically includes a certain number of minutes or hours of free charging. Inquire with the dealer to see if your vehicle’s manufacturer offers anything like this.
5. Charge at off-peak times
Those with home chargers could save money by charging at off-peak times, like overnight. Electric companies typically charge less for electricity during times when fewer people are using it. It might not result in significant savings, but even a few dollars saved per month could make a significant difference to your budget over the long term.
There’s no getting around the fact that EVs have a pretty high upfront cost. The above steps can help, but if EVs are still beyond your reach right now, don’t get too discouraged. Like all new technologies, prices will come down eventually and they’ll become more available to the masses.
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