Do Electric Cars Save Money?

With the economy in a state and fuel prices rising, many people are turning towards purchasing an electric car. The real question is whether electric cars can actually save you money. Unfortunately, the answer really depends on the individual car owner.

Let's start by discussing the technology involved. When individuals say "Electric Car," they're referring to one of two things. The first is a completely electric car. Instead of a traditional gasoline powered engine, these cars run wholly on batteries. We'll discuss these in just a moment.

When most people talk about an "electric car," though, they're talking about a hybrid - a gas/electric vehicle designed to function just as typical gasoline powered engines do. Wondering if these will save you money? Let's take a look.

When purchasing a hybrid car, you will quickly find that the sticker price of the car is much higher than the gas-guzzling counterparts. The reason for this is simple - supply and demand. Of course, the technology in an electric car is also much higher than a typical gas vehicle, so the cost increases again. However, even with the higher price of the vehicle, do the monetary savings at the gas pumps close the gap? Actually, no.

Even with gas as expensive as it is and an economy in turmoil, the gap between the cost of an electric car and the gas savings is not closed -meaning that you're spending more for your electric car than you would a traditional vehicle.

Another major issue with electric cars is depreciation. According to Consumer Reports' analysis, electric cars lose two to three per cent more in value after five years of ownership when compared to identical gas vehicles.

However, there seem to be two electric hybrid vehicles that would save money over five years - the Toyota Prius and the Honda Civic hybrid save a little over $300 in five years. The only reason these vehicles would save owners that money is do to the US federal tax incentives for hybrid vehicles - otherwise, the cost of ownership rises to $2,700 out of pocket. Other hybrid vehicles cost their owners thousands of dollars more than the non-hybrid versions in five years of ownership, even after the tax credits.

When you're talking about savings, though, there is an argument that we can't put a price on the environment. This is true, and perhaps there is a payment due for trying to fix what has been broken. This seems to be coming onto the backs of vehicle owners today, in the cost of "green" vehicles that will help to reduce emissions and the use of fossil fuels.

There are technologies for full electric vehicles, such as the ZENN vehicle that is made in Canada. The ZENN (which stands for zero emissions, no noise) is a full electric vehicle - running on a battery you plug in to your home electrical socket. While the technology might not be all the way there yet, these types of full electric vehicles may save more money in the long run, as they do not use non-renewable resources at all, but rather electricity which can be man-made and generated through renewable resources such as wind and water.

Many people are looking to save at the gas pumps, especially with the rise in gas prices in the recent years. Gas prices will continue to rise as wars erupt overseas and the demand for gasoline increases. With this, eventually, if gas gets expensive enough, electric hybrid vehicles will be cheaper to run, however gas needs to be almost $10 a gallon before the savings will be worth it.