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With gas prices on the rise, it has us thinking about how we can save. Yesterday we covered 10 easy ways to save on gas, and #10 was going extreme and switching cars… Some of you may even be considering making the move to an electric car. I did some research into it and went to some friends to see if it really could be a savings…
Gas Savings:
When it comes to switching to electric, our number one reasoning is usually to save on gas. Assuming a gas price of $3.54/gallon, a car that gets 28 mpg and 15,000 miles/year, gas would cost you $1,900 for one year. To charge your electric car for a year (although electricity prices vary across the country) should cost you around $500 according to Sierra Club. That would be a savings of $1,400 per year!
If you are like me and always drive more than 15,000 per year… that only get’s better.
Note: most of the cars do not need a special charger. Just plug it in and it charges in 8 hours.
Tax Credits:
Another incentive that may have you considering the switch are tax credits. Right now there is a $7,500 federal tax credit (if your end of year tax bill is $7,500 or more), plus you can find some state incentives. The incentives kind of depend on timing (whether or not the government still has the money). Also, don’t expect the incentives in your state to be the same as the next. If you’re buying a used electric car, it won’t qualify for the credit since the original owner is the one who would have initially received it. Do your research to see which incentives your state is offering for electric and hybrid vehicles.
Most electric car websites have a search feature for you to see which incentives are available in your area. I’ll give you a heads up that Georgia residents have the biggest incentives in the South East!
Leasing an Electric Car:
Recently my friend Amy and her family decided to lease a Nissan Leaf in Georgia. Here are their reasons for leasing the Leaf:
In Georgia, it’s a great deal because of a $5,000 credit on your taxes if your tax liability exceeds $5,000. You won’t get the $7,500 federal tax credit if you lease as it comes off the purchasing price for the lease holder. The basic lease is $199/month for the base model and it comes with tons of nice features including an app you can use to turn on the climate control system before you go outside!
That means if you choose a 2 year lease the tax credit covers your payments for the 2 years. Of course you still owe sales tax, a down payment, and other fees when you set up the lease, so it’s not entirely free. Since electric cars are newer to the market, it’s a great way to test it out without purchasing. However when you consider that you don’t have to purchase gas over the two years and that scheduled maintenance on an electric car is just rotating the tire (no oil changes, belts or mechanical fluids to change) it really works to your advantage!
The rough breakdown for Amy:
$1,900 Down payment
$1,000 in taxes and fees (estimated)
$4,776 in monthly payments
$7,676
-$5,000 Tax Credit
In the end the total cost for the car for two years is $2,676. Don’t forget the gas you aren’t buying though… after gas savings you come out ahead!!
The other major benefits in Georgia are that electric car users can use HOV lanes even for single drivers, and you can apply for special reduced electric rates at night to charge your vehicle at off-peak hours. If you work for certain employers, you may be eligible for VPP which gives an even lower lease payment. The leaf can travel 100 miles on a charge, so it wouldn’t be the most ideal primary car unless you decide to rent a car for longer family trips. However, if you’re just planning on commuting, it’s pretty great.
-$5,000 State Tax Credit
-Income Tax Credit of 10% of Cost of Charging Equipment
-Unlimited HOV Lane Use
-Reduced Electricity Rate
Electric cars are becoming more practical as their popularity increases. It comes with a charge cord that you can plug in at your house to charge overnight. This method of charging takes longer than if you use an actual charging station like you’ll find at the dealership and elsewhere (I’ve seen them in the Whole Foods parking lot).
With purely electric cars, the obvious advantage is the lack of CO2 emissions and higher tax incentives. However, when you buy a hybrid like the Chevrolet Volt, you’re saving on gas while also having the qualities of a car that you’re used to in your regular gas-fueled cars. If you run out of gas in a gas-fueled car, you head to a gas station. If you run out of charge in an electric/gas-fueled car, it switches from electric to gas until you get a chance to recharge. If you run out of charge in a purely electric car, you’re stuck until the tow truck arrives. When you’re shopping around for electric cars, see if the brand offers free towing services…
If the smaller electric cars aren’t the best fit for your family, keep up with some of your favorite brands to see when they’ll be offering SUVs and trucks. I think the Tesla Model X looks like a great option for bigger families with the 3rd row seating. Many automotive experts are saying that hybrids are the better choice long term. We’ve also seen one car manufacturer, Toyota, announce the end of their 100% electric models. They say the reason is to put more focus into their hybrid lines.
Thanks to Amy, a fellow frugal-mama for her insight into electric car-buying. Also to my go-to car dealer, Sam Burns at Burns of Gaffney, SC for answering all of my questions about the industry.
