Going Green, Going Broke? 10 Financial Pitfalls of Electric Cars You Can’t Ignore

It's easy to get excited about the possibility of green transportation. There's nothing more admirable than taking care of our planet and doing our part to reduce our carbon footprint. We've been hearing that EVs are less expensive than their gas-powered alternatives, and if you do the math, you may find that it's simply not true. 

EV ownership may have environmental benefits, but before you take out a new auto loan, you should check out these 12 financial pitfalls of EVs. 

Higher Upfront Costs

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The average new car costs $48,000. The average EV costs $60,000. That's an additional $12,000 or $200 a month, not including interest or increased insurance costs. Yes, there are federal tax benefits, but if you qualify for the full tax credit, that's only $7,500, leaving you down an additional $4,500. 

Limited Model Variety

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As of March 2023, only 40 EV models were available on the market to choose from. This means that with limited options, there are fewer affordable options for people to choose from. And if you have specific needs and preferences, you may be fresh out of luck. 

Costly Charging Infrastructure

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Did you know that it costs anywhere from $500-$1300 to get a home charger installed? Yeah, and that doesn't even include the cost of the actual home charger. Go ahead and tack that on to the total cost of an EV. Public charging stations are looking rough, so a home charger is basically a need. 

Long Charging Times

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They say time is money, and if that's true, recharging your car costs a lot. The average time to fill up a gas car is 8 minutes, and the average time to recharge an EV is 30 minutes to eight hours. How much is eight hours of your time worth? 

Battery Replacement Costs

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If you buy an EV, you'd better hope and pray that the battery never needs replacing. EV batteries cost anywhere from $4,000-$20,000, and they have limited battery life, so they're destined to need replacing at some point. 

Limited Second-Hand Market

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If you're hoping to save a buck and buy a used EV, don't count on it. Since EVs are so new, very few of them have entered the used car market. And those that have are likely to be old technology and out of date already since EV tech is moving so quickly. 

Edmunds says, “You'll find that earlier electric vehicles such as the original Nissan Leaf, Ford Focus EV, Kia Soul EV, Chevrolet Spark, and Fiat 500e will be less expensive and can make for a bargain commuter car, but there's a reason why those prices tend to be low. The EPA range on those early EVs was typically between 75 and 115 miles when they were new, and the real-world range is likely less now due to battery degradation.”

Maintenance and Repair Costs

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EVs do have fewer parts, which means that there are fewer things that can break. But the things that do break end up costing a lot– not to mention there are very few auto mechanics that are properly trained on how to work on EVs. Plus, parts for EVs also cost more. This means you're paying more for labor and more for parts. 

Costly Insurance Premiums

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Electric cars have higher insurance premiums, and it's for several reasons. First, EVs are generally more expensive, and more expensive cars cost more to replace, so their insurance premiums will naturally be higher. EVs cost more to repair because the parts cost more, they're harder to find, and EV mechanics are few and far between. 

Range Anxiety

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If you're worried about range anxiety, which a lot of EV owners are, then you may want to invest in range-extending options or higher-end EV models to alleviate your range anxiety, which leads to you spending more than you would have if you had just purchased a traditional gas-powered car. 

Depreciation Concerns

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There are a lot of concerns that EVs depreciate more than gas cars, and there is already data to prove that this is true. Research by Car Parts says, “The study showed that the typical model lost 39.1% of its original price by the time it turns three years old…It found that three-year-old electric cars generally lost 52% of their price tag as brand new units.”