RelayRides blogger Eric Rosenberg shares his research on the true money-saving potential of owning a hybrid, or EV.
Electric cars are growing in popularity for their green image and non-reliance on gas. However, the up-front cost and issues some manufacturers have had with batteries are scaring away some would-be early adopters. Before you get ready to buy your next car, let’s take a look at whether 100% electric cars really save money.
Average Cost of Owning a Car
According to the U.S. Energy Information Administration, gasoline accounts for about 4% of your household’s pre-tax income. In dollars, that was almost $3,000 in 2012. $3,000 is a lot of money!
Of course, different types of cars and different driving habits make a big impact. The Wall Street Journal’s MarketWatch reports that owning an SUV costs about $5,000 more per year than a sedan.
Owning a sedan costs about $7,000 per year and owning an SUV costs about $12,000 per year. Those costs include gas, maintenance, and insurance.
Saving Money with a Hybrid
Hybrids are the first step toward an electric car. Some hybrids re-charge their batteries from regular driving only, while others have a plug-in option as well to cut gasoline use further.
The initial cost to buy a hybrid is $2,000 to $10,000 more than a regular gas powered car. Sometimes you can get tax breaks for buying a hybrid, but let’s not take those into account here because everyone does not get the break.
To save money over the life of your car (about 5 years for many people), you need to save up to $2,000 per year in expenses over a regular gas guzzler. That savings comes from lower fuel use and lower maintenance costs.
Remember that you still do use some gas with a hybrid, but a lot less. For the 2013 Ford Fusion, the estimated cost of gas over the life of the car is $3,891.
Compared to the most similar non-Hybrid counterpart, the five year cost of ownership can save you money. A 2012 comparison by Forbes found that a Toyota Prius saved about $1,500 compared to the most similar Toyota model.
The top three money savers were surprisingly on the higher end models. At the top were the Lexus HS 250h saving $3,747 vs. a Lexus IS 250, the Mercedes-Benz S400, with a savings of $4,252 vs. the S550, and the Linconl MKZ Hybrid which saves $7,001 over five years.
Saving Money with an Electric Car
I have been lucky to be a part of a family where efficient cars are the norm. My parents own a Camry Hybrid and a Nissan Leaf. My Dad picked up his shiny new Leaf a few months ago and has been thrilled with the car. He doesn’t even know what gas costs per gallon anymore; he has not been to the gas station since he bought the car!
According to Kelly blue book, the cost to own that car in Denver, Colorado is $37,070 over five years. The cost of ownership falls in between the compact Nissan Sentra and full-size Nissan Altima. For a car with great luxury features, very low maintenance, and zero gas station visits, that is a pretty great deal!
In some states, comparing the cost of gas to electricity makes the savings even better. In California, the cost of gasoline is $3.56 per gallon. The electricity cost equivalent? $1.63. In my hometown, the cost of gas is $3.15 per gallon. The equivalent electricity cost is $1.24. That is a huge energy cost savings!
Want to see the gas cost compared to the electricity cost for your state? Check out the government’s eGallon calculator.
The proof is in the numbers. Over five years, a hybrid car or an electric car can save you a lot of money compared to a traditional gas car. Depending on how much you drive and where you live, those savings can be huge!
The next time you are in the market for a car, don’t let the sticker shock of an electric or hybrid scare you away. Not only can you save on costs down the road, but you can rent your car on RelayRides to help make your car pay for itself. Think about the long term and how much you can save.