Gas Vs. Electric Cars: Which Is The Right Investment?
Interconnected electric lights, symbolizing the future of technology.
Before deciding on whether to purchase or lease a car, it is important to get a better idea about the current state of the automobile market. There is a lot of buzz surrounding the electric car revolution and whether electric cars will soon surpass gas vehicles in terms of their popularity. While this may not happen for some time, electric cars are increasingly affordable and may even make more sense as an investment. The fact that their market share has risen dramatically in the past two years is worth considering when making your next automobile purchase.
However, while they may be increasing in popularity, electric cars still have a reputation for being expensive and out of reach to the average consumer. Since their inception, electric vehicles have become the latest thing for celebrities and the one-percent to drive and not the purview of the average consumer. While this may be changing as more automobile companies are pursuing the development of an electric model for their line of products, the popular conception still holds.
Consumers need to do a deep dive into the available data and literature to know what the best investment – gas or electric – is these days. Given its impact on your household budget, buying or leasing a new car is always a big decision. To provide you with the insight and background to make an optimal decision, let’s look at some of the economic factors and pros and cons with choosing a gas car against an electric car.
Fuelling Costs: An Objective Breakdown
More than any other factor, the cost of fuelling your vehicle will ultimately decide whether the long-term costs of buying or leasing the car are worth it. When it comes to electric cars, fuelling your vehicle requires access to a charging station. Most estimates suggest that the cost of charging a contemporary electric car is much lower than fuelling a conventional gas-powered vehicle (even when considering the fuel efficiency of modern engines). This is especially true when you have access to public charging stations that are completely free to use.
However, it is important to remember that electric vehicles cannot be driven for the same length of time as gas-powered cars. Here, the metric to look out for is kilowatt-hours per 100 miles rather than the classic miles per gallon system! You can expect that the average electric vehicle will only be able to take you for about half of the distance as the average gas-powered car.
This necessitates a bit more conscious planning when it comes to driving an electric car. Since electric cars are more prevalent on the roads these days, the number of charging stations is increasing in major metropolitan centres. This provides easier access to powering up your vehicle and avoids the uncertainty of planning out your route more carefully (in contrast to the abundance of gas stations scattered throughout the country).
Ultimately, when the value of your time is taken into consideration, there is a definite trade-off when it comes to choosing an electric car. While you will certainly save at the pump, you may find that the headache of locating a charging station and keeping a close eye on how charged your battery is at all times is not worth the money.
Of course, there are other options for those who only plan to use their electric vehicle for commuting or travelling shorter distances most of the time. You can easily install a home charging unit for your electric vehicle, though this will add to the overall cost of the investment you put into buying or leasing an electric car. Depending on your budget and how much you are willing to commit and pay upfront to going green, a home charging unit may ultimately help to make an electric car more affordable in the long run. For those with a lot of capital who are willing to make a large upfront investment to reap even more long-term savings, you can even install a solar panel system on the roof of your home in order to power the charging unit itself. This provides you with completely free electricity (after the unit has “paid for itself” over time) and dramatically lowers the cost of operating an electric car.
Factor In The Costs Of Maintenance
Most current car owners are acutely aware of the costs involved in keeping their vehicles well-maintained and running at their best. When you purchase or lease a gas-powered car, then you knowingly sign up for these tertiary costs as a matter of course. Most car drivers are familiar with the requisite oil changes, battery replacements and other components that need to be swapped from time to time.
Many consumers, however, are unaware of the specific maintenance costs that come with purchasing or leasing an electric car. Naturally, much of the maintenance that an electric car will need is similar to that of gas-powered variants. Things like tire rotations, brake fluid service and coolant service all need to be diligently conducted in order to keep your electric car moving efficiently and safely.
Electric cars differ drastically from gas-powered vehicles in terms of the care of their batteries, however. Since this is virtually the “engine” of an electric car, treating it with respect will help you to keep it running properly. In terms of costs, this will vary significantly depending on the manufacturer of the vehicle. However, it is usually substantial and a serious expense to replace. You can, however, usually be confident that an electric car battery will come with a warranty that can extend for up to eight years or for a certain number of kilometres. This can provide you with the confidence that you need to make the investment in an electric car without the fear that you will soon have to pay for a replacement out of your own pocket.
Reap The Rewards Of Tax Credits
One of the best things about electric vehicles is the potential to have much of the cost covered by tax rebates. Depending on which jurisdiction you are living, there may be both national and more local tax incentives aimed at increasing the affordability of electric cars. The details of these programs are continually being changed as electric cars (and their environmental benefits) are a political issue as well.
If you are thinking about purchasing or leasing an electric car, there has never been a better time to do it. Depending on where you are, you may even receive additional credits for trading in your gas-powered vehicle as well.
Tax rebates and other incentive programs are one of the most significant things to consider when you are deciding whether to opt for a gas-powered or electric vehicle. You may expect that these incentive systems will only continue to make electric vehicles of all kinds even more attractive as an investment.
Eco-Friendly Benefits
When it comes to the eco-friendly benefits of a new vehicle, it is clear that electric cars are the big winner here. In broader economic terms, gas vehicles are one of the biggest sources of carbon emissions generated by consumers. This contributes to the overall environmental problems that are facing the world today.
However, it cannot be ignored that the production and manufacturing of electric vehicles is hard on the environment as well. The extraction of cobalt, for example, is often conducted in developing countries where regulations are nonexistent. This leads to the generation of emissions that are often not accounted for when consumers opt for what they believe to be a green choice. In fact, in light of this fact, some research even suggests that the overall environmental footprint of diesel-powered vehicles is superior to electric vehicles.
It is also worth pointing out that the fuel efficiency of contemporary gas-powered vehicles is increasing every year. Making the investment into buying or leasing a gas-powered car that is equipped with modern fuel efficiency technology may ultimately be better for some consumers than an electric model.
Nevertheless, in terms of the emissions that the cars themselves produce, an electric vehicle will always come out ahead. If your jurisdiction requires some form of air quality check that comes with a price tag to pass, then you may consider leasing an electric vehicle in order to avoid these fees and charges entirely.
When It’s Time To Sell The Car
Gas-powered vehicles are known for depreciating in value as time goes on. With new models coming out every year, the value of a new vehicle drops substantially as soon as it is driven off the car lot. Many consumers buy new cars for reasons other than their financial value, as the vast majority of vehicles (with the exception of classic cars, for example) do not appreciate in value and provide their owners with some form of financial return.
Electric cars may be no different when it comes to their resale value. Especially in the light of the tax rebates and credits that are available only to first-time buyers of electric vehicles, it often makes little sense to buy these cars if they are used. This can make it difficult to find a buyer, even if you are a motivated seller of an electric vehicle.
Beyond that, there is little consumer appetite for outdated electric technology. Since the batteries and components of electric vehicles are improving rapidly with each passing month, consumers know that an investment into a new electric car will ultimately provide them with more savings than one with inferior technology and a smaller travelling range.
Which Is The Better Investment?
When it comes to the final assessment of whether to invest in an electric or a gas-powered vehicle, the jury is still out. Gas-powered vehicles have far more infrastructure available to service and support them throughout the world. This makes them highly convenient and – with better fuel efficiency over time – increasingly easier on consumers’ wallets.
Electric vehicles represent a great opportunity for lowering the long-term costs of owning and operating a vehicle. However, even with tax credits and rebates, they do require a substantial amount of capital to acquire (when charging stations and maintenance costs are factored in). That said, there has never been a better time to buy an electric car than at present. You can expect that this form of transportation will only become more popular (and cheaper) as time goes on.
This is why leasing an electric car may be the best option of all. For those who want to have access to the most contemporary technology year after year and experience the most cost-saving potential of an electric vehicle, leasing will provide you with both. Leasing also allows you to switch back to a gas-powered vehicle if you find that an electric car is not affordable.
Make sure to weigh the pros and cons of each type of vehicle before making a leasing or purchasing decision and, since location is a factor, consider whether your area is electric car-friendly in terms of infrastructure before committing.
Remember that if you’re having a hard time securing a bad credit car loan, here at Auto Loan Solutions we don’t discriminate between credit scores when we’re considering applications. Get in touch with us today to figure out what your options are.