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Electric vehicles are cheaper than conventional cars to maintain, but they’re more expensive upfront and lose value at a much faster pace over time, according to a new study.
Takeaway: Consider buying a used electric car, said AAA, which releases its annual True Cost of Vehicle Ownership report on Wednesday.
Though electric cars remain more expensive at the dealership — a new electric Chevrolet Bolt starts at $30,000 after federal tax incentives while a similar Chevy Cruze hatchback starts at $22,190 — drivers can save on monthly costs unrelated to their car payment. That’s partly because electric cars have fewer parts than gas vehicles.
Also, charging an electric car costs about 4 cents per mile, compared with about 10 cents per mile for the average new vehicle overall, according to AAA.
The sales-weighted average value of a one- to three-year-old Nissan Leaf at the wholesale auction level is currently $8,832, Cox Automotive said.
“Electric vehicles are really an economical way to drive,” said John Nielsen, AAA’s managing director of automotive engineering and repair.
But don’t walk away from gasoline cars just yet. The average cost of owning and operating a new vehicle in 2017 was $8,469 for a person driving 15,000 miles per year, according to AAA. That was down from $8,558 in 2016, a sixyear low, though the study methodology has changed so the years aren’t necessarily directly comparable.
Improved reliability means gas cars break down less often than in the past and thus require fewer repairs, while low gasoline prices have kept the fuel bill down.
But at $706 per month — a figure that includes monthly payments, maintenance, insurance, fuel and depreciation — owning a new vehicle remains out of reach for most American families. And the costs could still be higher over time.
Average new-vehicle transaction prices reached an all-time high of $35,430 in 2016, accord- ing to Kelley Blue Book. Consumers are responding by purchasing vehicles on longer loans, including some 72-month and even 84month loans.
“The monthly payment is the No. 1 thing people look at in terms of cost of ownership,” Autotrader.com analyst Michelle Krebs said. So “consumers are stretching out loan terms.”
Not all vehicles are made alike, though. The average annual cost of owning a small sedan is $6,354, while the average cost of a midsize sport-utility vehicle is $9,451 and the average cost of a pickup is $10,054, according to AAA.
Some motorists might already be able to save on transportation by giving up their vehicle and relying on mass transit, ride-hailing apps, rental cars or some combination.
“My gut tells me that for some people that would make a lot of sense,” Nielsen said.