We wanted to share some insights that might be of interest to you and your clients, especially given the growing trend towards electric vehicles (EVs). While the automotive industry isn't my primary focus, we recognize the importance of understanding the financial implications of such purchases. To assist with this, we’ve put together a guide that explores the financial aspects of owning an electric car. Even if some of this information is familiar, we believe there are new insights that could be valuable to your clients.1 Financial Considerations for EVs: - Purchase Price: EVs with similar features tend to be more expensive than gas vehicles. According to data from Kelley Blue Book, the average transaction price for electric cars was $56,371 in June 2024, vs. gas-powered vehicles at $48,644.2
- Government Incentives: The federal government offers qualified buyers up to $7,500 to purchase select new fully electric, plug-in hybrid, and fuel-cell vehicles. Those looking to lease an EV may find a dealership offering qualified buyers a $7,500 credit. Buyers looking for used electric cars may qualify for up to $4,000 on specific models. We encourage our clients who are interested in EVs to consult their tax, legal, and accounting professionals. We also remind them that tax incentives can change without notice, and there is no guarantee that the current incentive will remain in place.2
- Maintenance Costs: EVs have fewer fluids, meaning no 3,000-mile oil changes, making upkeep easier. Also, there is less brake wear with EVs due to regenerative braking. The bottom line of maintenance is that EVs have fewer moving parts than vehicles with combustion engines, creating a streamlined maintenance experience.3
- Fueling Costs: One benefit of EVs is that they can be cheaper to drive. The average EV costs about 3 to 5 cents per mile at the 15 cent/kWh national average. A gas-powered vehicle that gets around 25 miles per gallon costs around 15 cents per mile at a $3.50 per gallon price. When all the math is calculated, a gas-powered car is about 3 to 4 times higher than the cost of driving an electric car.4
- Home Charging Installation: Level 1 chargers, often included with an EV purchase, use a standard 120-volt household outlet and can bring an EV battery to 80% in about 40 to 50 hours. The equipment for Level 1 chargers typically costs between $300 and $600, plus installation. Level 2 chargers, which require a 240-volt circuit, can charge an EV to 80% in 4 to 10 hours. These chargers usually need to be purchased separately, with equipment costs ranging from $500 to $700 plus installation.5
- Insurance Premiums: Policy prices depend on a wide range of factors, including the specific model and your individual circumstances. We encourage our clients to speak with their insurance professional before moving forward.
While EVs offer many benefits, it's important to weigh these against the associated costs. If you think any of your clients might benefit from a discussion regarding the financial aspects of owning an electric vehicle, please don’t hesitate to reach out. We welcome the opportunity to review specific client situations and collaborate on broader client financial strategies. By partnering, we can provide comprehensive support to help your clients navigate this critical aspect of their financial lives. We're committed to providing the same high level of service and support that you offer your clients. |
Sources: 1. U.S. News & World Report, May 1, 2024 2. Kelley Blue Book, July 15, 2024 3. U.S. News & World Report, October 25, 2023 4. EVLife.com, April 3, 2024 5. Capitalone.com, October 31, 2023 |
