How much does an electric car cost?

If you are thinking about driving a plug-in hybrid or EV, is it better to buy or lease? All things considered, leasing is probably the smartest option right now. Why? Because technology is changing so fast, that shiny new car that is state of the art today may be hopelessly out of date 3 years from now. It seems like improvements to batteries are adding range and lowering prices every few months.

If you lease your car, you can always move up to a new model with all the latest technology when your lease term is up. Plug-in and electric cars today are very much like the computers of a generation ago when processor speeds were improving rapidly and costs were tumbling. Leasing was the way to go for computer users then and it may be the best option for plug-in and electric car drivers today.

The exception may be Tesla Motors, which is able to update the software in every car it has ever built wirelessly over the internet. That keeps all its cars current with the latest developments and avoids the depreciation that comes with annual model changes.

In the used car market, Teslas retain more of their original value than any other alternative fuel vehicle, although part of that is due to the public perception of the Tesla Model S as a premium product that commands a premium price.

When it comes to operating costs, the electricity needed to recharge a plug-in or electric car costs about 1/3 of an equivalent amount of gasoline, although the cost of electricity can vary considerably throughout the US. In Hawaii, for instance, electricity costs are nearly triple what they are on the mainland. Some companies offer free or reduced cost charging for their employees while at work in order to encourage them to adopt a greener lifestyle.

While internal combustion engines have hundreds of moving parts, all of which wear out over time, electric motors are simple devices with only one moving part. In general, maintenance costs for electric and plug-in hybrid cars are lower than for conventional cars.

Adding the savings in fuel costs to the savings in maintenance costs means that driving a plug-in or electric car is much less expensive than driving a conventional car.  Alternative fuel cars are often less expensive to insure as well. Ask your insurance agent for a quote to see how much you could save.

Last but not least, consider the federal, state and local incentives available to people who purchase a plug-in or hybrid car. (Those incentives often do not apply if a vehicle is leased.) ChargePoint has a very useful guide to all known incentives, but be sure to check with applicable state and local authorities. Some states and municipalities are reducing or eliminating their incentive programs now that more alternative fuel cars are on the road.

The one thing every person considering a plug-in hybrid or electric car should do is test drive one. Electric motors have more torque at slow speeds than gasoline engines do. Many people are pleasantly surprised at how quick these cars accelerate from rest.

The more you know, the more likely you are to consider driving an alternative fuel vehicle. They are not for everybody quite yet, but if one fits your driving needs and lifestyle, it can be economical yet still fun to drive.