With gas prices as high as they’ve been, many people are considering an electric vehicle (EV for short). Fluctuating gas prices and environmental concerns are only two of the reasons people are turning to driving electric vehicles. If this is something you’ve been thinking about, U are not alone! Sales of EVs were up to 9% of car sales worldwide last year – an impressive increase from 2.5% in 2019.
It’s no wonder the automotive industry is seeing an uptick in EV interest. They are better for the environment and save money on gas, among plenty of other benefits. If you find yourself considering an EV, we’ve put together some helpful topics for U!
We care about helping U save in all aspects of your life. Gas-powered or electric-powered, we want to help U save on your auto loan and in all other ways we can!
Considerations of Getting an EV
Rising Gas Prices
Unless you have the luxury to walk everywhere, (let’s face it, in L.A. it’s a luxury!) you know that gas prices have been fluctuating like crazy. It’s normalized a bit now, but in late June, the average national cost of gas was $6.16 per gallon – a $2.09 per gallon increase over last year!
Apart from that, EV owners can save as much as $14,000 on fuel costs by owning an electric car for 15 years. That’s basically the equivalent of $2 a gallon. Likewise, according to a 2020 Consumer Reports study, EV drivers tend to spend about 60% less each year on fuel costs compared to drivers of gas-powered cars. Not too shabby!
It’s no secret — sticker prices are higher for an EV, but purchasing an electric vehicle will get you a tax break. The Inflation Reduction Act extends the existing $7,500 tax credit for EV vehicle purchases and eliminates a limit under the old rules for the previous tax break that excluded incentives for any automaker once they sold over 200,000 electric vehicles. Click here to confirm eligibility.
The credit is a deduction on your federal income tax return for the calendar year in which you purchase the car. Plus, many states offer their own incentives to get you running on electricity, and some cities have their own incentives on top of that! That’s a potential three different ways to save.
Burbank also offers a rebate on purchasing a used EV and a rebate on setting up your residential charging station! Even if you’re not ready for an EV, check out this California program that incentivizes So.Cal residents to get a more fuel-efficient vehicle. Californians can qualify for up to 3 of these and Burbankers can qualify for up to 4!
The Federal $7,500 tax credit mentioned above comes with a few restrictions that may impact the number of tax breaks you receive and when you are eligible.
Only true EVs that are battery-electric (also known as BEVs or “battery electric vehicles”) or plug-in hybrids are eligible for the tax credit. The vehicle must be purchased as a new vehicle. The federal tax credit does not apply to those leasing electric vehicles, instead the tax credit will go to the lessor (a.k.a. The dealer). But this still can lower a monthly payment — if the lessor chooses to factor that incentive into your lease agreement. It’s also good to note, some Californian territories provide incentives for leased vehicles. And yes, you can qualify for both federal and state-level incentives!
Maintenance, Charging Costs, and Upkeep
EVs don’t need oil changes or typical replacement of automotive parts, but they still require basic maintenance. Overall, EVs typically cost half as much to maintain and repair as gas-powered cars.
While your car’s gas bill is sure to go down, your EV will still need to be charged. How much this costs will depend on several factors including how you charge it and where you live. Electricity costs vary by region and, if you’re charging at home, the time of day you charge your car can have an impact, just like your appliances at home! Here’s a handy guide from Burbank Water and Power about best and least expensive times to charge an EV.
In addition to the rebate we mentioned above for your residential charging station, The Departments of Transportation and Energy are investing nearly $5 billion over five years to help create a network of EV charging stations. This will give greater flexibility to EV owners, but the cost to charge will definitely be a factor.
Note that public charging stations range in price but can be significantly more than home charging. EV efficiency is measured by how many kilowatt-hours (KWh) of electricity the vehicle consumes per 100 miles. Just as you would consider the gas mileage of a traditional vehicle, consider the efficiency rating for an EV. Shop around to make sure you are getting the best fit for you.
With the savings from the tax break, gas, and maintenance — even considering a higher sticker price — you stand a good chance of saving more money over time.
High Demand Means High Cost and Limited Availability
It’s an EV dealer’s market! People are jumping on the EV bandwagon and the prices – and availability – reflect its popularity.
According to Kelley Blue Book, the average electric car costs $10,000 more than the average gas-powered vehicle. While you’ll be saving money in the future on gas and maintenance – and you’ll be getting that tax break we discussed earlier – we can’t ignore that it’s a lot of money to put down.
Efficiency and Technology
Consider the current efficiency of EVs and your personal tech needs. Technology has certainly come a long way – and it won’t stop evolving! If you buy an EV car now, you may miss out on some of the new advances coming down the line. All newer cars have computers now, so really, this is a consideration for gas-powered vehicles as well!
How much do U drive? The popularity of EVs has introduced a new phrase into the lexicon: “range anxiety.” Range anxiety is the concern that your EV just won’t make it as far as you need it to go.
Like we talked about, technology has come a long way! Nowadays, depending on the model, EVs can go from 100 to 520 miles on a single charge and California is luckily brimming with charging stations! This will usually satisfy anyone’s daily driving needs. But you know you. Figure out how much you drive and consider whether the range anxiety will be too much.
Whether EV or Gas-Powered, Let’s Talk!
You can save money with an EV. While tax credits, gas prices, and charging stations can seem overwhelming, only you can decide which road is right for you. Do U want a more personalized assessment of which options you align with the most? We are here to help! Helping’s our favorite. Just send us an email or give us a call with any questions.Email Us Call Us
Whether you choose to go electric or stay traditional, you may need financing. That’s also where we can come in! Let us work with you to figure out the best way to finance your vehicle – whether you buy an EV or standard gas vehicle!get an auto loan in Burbank
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