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There are many reasons why drivers are gravitating toward electric vehicles. Money is one of them.
While EVs can command a higher sticker price, they have the potential to save you money in the long run due to lower running costs.
For instance, a 2020 Consumer Reports study found that ownership costs for the most popular EVs on the market under $50,000 are “many thousands of dollars cheaper” than the best-selling internal combustion engine vehicles in their class.
The report found typical savings ranging between $6,000 and $10,000.
However, while EV drivers don’t need to stop at the gas station, they do have to pay for electricity — and that’s not so cheap these days.
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According to a new study from the Anderson Economic Group, rising electricity prices — combined with softer gas prices — made EVs more expensive to fuel than gas-powered cars at the end of 2022.
“In Q4 2022, typical mid-priced ICE car drivers paid about $11.29 to fuel their vehicles for 100 miles of driving,” the study says. “That cost was around $0.31 cheaper than the amount paid by mid-priced EV drivers charging mostly at home, and over $3 less than the cost borne by comparable EV drivers charging commercially.”
Of course, that doesn’t exactly mean gas-powered cars are cheap to run. The national average price for mid-grade gas in the U.S. is still close to $4 a gallon according to motoring and leisure travel giant AAA.
So here’s a look at three ways to save money on car ownership — no matter what you drive.
Don’t drive aggressively
In the U.S., gas-powered cars come with EPA fuel ratings for city, highway and combined driving.
But those numbers are based on results from EPA’s fuel-economy tests, so depending on how you drive, the mileage you get could be different.
According to the Department of Energy, aggressive driving — defined as speeding, rapid acceleration and braking — can lower gas mileage by 15% to 30% at highway speeds. For stop-and-go traffic, it can lower gas mileage by 10% to 40%.
And this applies not just to ICE cars. Having a heavy right foot can impact the mileage of EVs as well.
The Department of Energy says that when it comes to battery electric vehicles, “rapid acceleration reduces vehicle range” compared with “gradual acceleration.”
It’s no surprise: regardless of what type of fuel your vehicle is running on, it takes energy to accelerate it.
Therefore, if you want to get more miles out of one tank — or one charge — be gentle with the accelerator pedal.
Read more: Here are 3 easy money moves to give your bank account a boost today
Watch the price
Energy prices have always been volatile. With rampant inflation over the past year, we’ve all learned firsthand how unstable gasoline, diesel, and electricity costs can be.
No one can predict commodity prices with certainty. But if you drive an ICE vehicle, you can monitor gas prices. These days, there are websites and apps that map out gas stations and show their prices so you can find the best deals.
Moreover, some gas stations also offer loyalty or rewards programs. Depending on the program, consumers may buy gas at a discount or earn points that can be exchanged for other rewards.
If your car is electric, there are ways to save on charging, too.
The key here is when you charge.
If you have a time-of-use plan with your utility company, the electricity you use during off-peak hours can cost considerably less than if you are using it at peak hours.
And that could lead to substantial savings for EV drivers according to Jonathan Elfalan, director of vehicle testing at automotive information website Edmunds.
“Assuming we used the Southern California Edison time-of-use Prime rate plan, a 2022 Ford Mustang Mach-E RWD with the extended battery, which is rated at 35 kWh/100 miles, would cost as little as $3.85 for 50 miles’ worth of power if home charging started at 11 p.m. Or it could cost nearly three times as much, $9.45, if the car charged during peak hours,” Elfalan says.
So instead of plugging your car in as soon as you get home, consider waiting for the cheapest time.
Compare insurance
In order to drive your vehicle on the road, you need to not only put fuel in its tank or electricity in its battery, but also have valid insurance.
Therefore, if you are calculating how much you can save by going electric (or staying with ICE), you should factor in the insurance premiums you’ll be paying as well.
Obviously, the premiums will depend on many factors other than the make and model of your vehicle, such as age, driving history, use, and where you live. But it can be hefty: AAA estimates that the average cost of full coverage insurance is $1,588 per year for a personal use vehicle by a driver who’s under 65, has more than six years of driving experience, no accidents, and lives in the suburbs or city.
No matter what type of vehicle you drive, if you think you are paying too much for your car insurance policy, you might want to compare car insurance and save up to $500 a year.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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