Pros and Cons of Owning an Electric Vehicle

July 15, 2024

Almost 1.2 million Americans went electric in 2023, and according to Kelley Blue Book, electric vehicles are the fastest-growing category in car sales. With states such as California putting forth legislation that will require all vehicles to be electric by 2035 and new federal regulations for all government vehicle acquisitions to be electric the same year, EV sales are expected to remain steady.

“For people thinking about going to EV, just get educated,” says CEO of ChargePoint Rick Wilmer, who operates the world’s largest network of EV charging stations in North America and Europe. “If you understand how it works on a basic level, you should be fine.” So if you’re thinking about owning an EV, here are some pros and cons to going electric.

Pro: Savings on Gas

Depending on how large the battery in your EV is and what your electric rates are, it will still cost you money to charge your vehicle at home, but it should be less than what it would be to fill a gas tank. You can calculate the cost of filling up an EV by multiplying the size of the car’s battery by your home’s electricity rate, which can be found on your electric bill in kilowatt hours (or kWh). Then you could compare that price to how much it would cost to fill up a car with gas and yield the same mileage. If you pay the 2024 national average of 17 cents per kWh and have an EV with a 65-kWh battery, then you would pay $11.05, or $0.17 × 65, to fully charge the car’s battery. At the pump, if you paid this year’s average gas price of $3.35 per gallon, then10 gallons of gas would cost you $33.50. Plus, if you utilize public chargers or have access to other free charging stations, then your gas savings could be even higher. At the end of the day, the amount of money you’ll save on gas will depend on how many miles you drive and the difference between what you’ll pay for electricity versus gas.

Pro: Less Maintenance Costs

EVs have less engine than a traditional gas-powered car, so there are less things that can go wrong. Since there’s no engine, there are also no oil changes or certain routine engine maintenance to take care of. This isn’t to say EVs come without maintenance though. You may need to replace your tires more often due to the heavy battery and regenerative braking, which helps charge the battery every time you use the brakes. EV tires typically wear out 20% faster than a traditional car’s. While the cost of replacing a battery can range from $6,500 to $20,000, many EVs now come with battery warranties of up to eight years or 100,000 miles. Putting your savings on gas on maintenance into a sinking fund may help if you end up needing to replace the battery down the road.

Pro: Better for the Environment

EVs don’t burn gas, and even though the battery makes it more material-intensive than a gas-powered vehicle, the environmental benefits outweigh the initial environmental cost. The greenhouse gas emissions from charging the vehicle are also lower than a gas car’s total emissions, especially when the local power plants are using clean energy sources rather than burning fossil fuels.

Con: Investing in Home Charging

Unless you plan to rely completely on charging your EV in public spaces or you live somewhere that already has charging stations available, you’re likely going to have to install a charging station in your home. In addition to the cost of installing the charging station, your electric bill will be higher. How much higher your bill will be depends on your electric rate, the type of charging system you use, and how often you need to charge your battery at home.

Con: EV Range and Charging Difficulties

An EV’s range is how far a full battery charge will get you. Today, you can buy a new EV with a range between 260 and 400 miles. Even on a full battery though, most EVs won’t take you as far as most gas-powered cars on a full tank. The other downside to having to charge the battery versus filling up at a gas station is that fully charging a battery can take up anywhere between 15 minutes and 12 hours depending on the charging speed. Yet another sticking point to getting where you need to go is that it might be difficult to find charging stations along the way as EVs are still new. You’ll likely have to plan your route around where you can stop and charge up.

Con: The Upfront Cost of Buying an EV

While it’s becoming less expensive to buy EVs, they are still more expensive than your traditional vehicle. According to Kelley Blue Book, the average cost of buying a new EV was $49,507 by the end of 2022. “Buyers expect their vehicles to be affordable. Fully 74 percent of those intending to buy an electric expect their next vehicle to cost less than $50,000,” says Deloitte’s Automotive Research Leader Ryan Robinson. “With the average price of a new vehicle already approaching $40,000, that’s a very narrow band for electrics.” As production increases and technologies improve, EV prices are expected to equalize with conventional cars in the coming years. Also, the cost of buying an EV may be offset by the potential fuel and maintenance savings and the federal tax credit. This year, you may claim a tax credit of up to $7,500 on your 2023 taxes for purchasing an electric vehicle.

Are Hybrids the Middle Ground?

If you’re hesitant to buy an EV, then a hybrid car might be an alternative. Since hybrids use less gas, they are still environmentally friendly and will still cost you less at the pump. Another plus is that since they are self-charging, they don’t require charging stations. Even though skipping out on charging stations is a benefit, they do still have a battery that will eventually cost you to replace. Since you can think of a hybrid as being part traditional, there will also still be maintenance costs. They will also cost you more to buy upfront, because a hybrid uses newer technology just like an EV. If you think you can afford the added costs upfront and possibly replace the battery eventually, then the upsides to hybrids are going to be less emissions, gas savings, and hassle-free battery charging.

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If you’re unsure of buying an electric vehicle, another solution may be to lease one and see if the EV life is right for you. Otherwise, as long as you think you can reduce the upfront costs of transitioning to an EV, the savings on maintenance and gas over time are appealing, while you would also be doing your part in reducing emissions. At Insureyouknow.org, you may store and access all of your financial information and vehicle maintenance records easily so that if you’re considering going electric, the transition can be seamless.

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How to Cut Down on the Cost of Owning a Car

February 15, 2024

In 2023, the average cost of owning a new car was $12,182 a year or $121 a month according to AAA. In addition to car payments, insurance, and maintenance costs, the price of gas is $5 a gallon,, which means that most U.S. households will spend $2,750 on gas per year. “If you are living paycheck to paycheck, it could put you over the edge,” says Ivan Drury, senior manager for Edmunds.com, a car shopping site. “But even if you are not, it’s very emotional. It’s in your face twice a week.”

The good news is that by cutting your expenses in other areas, such as with car insurance, you can save money and make up for the added charges at the pump. Besides simply driving less, which isn’t an option for many people, here are a few ways to make car ownership more affordable.

1. Shop Around For Car Insurance

According to J.D. Power, only 1 in 7 drivers changed auto insurers last year, but shopping around for lower premiums could save you a lot of money. In addition to your location and the type of car you own, other factors affect your rates, including your age and credit score. If you’ve improved your score within the last year, this one factor may lower your car insurance bill.

You can collect quotes through an insurance agent or use an online search engine, such as Experian, who claims to have saved drivers an average of $961 a year or $80 a month in 2021. Calling around or doing a quick search takes only fifteen minutes and could shave a lot of money off of your premium.

2. Check For Discounts and Adjust Your Existing Policy

Your existing carrier may offer discounts you don’t even know about, such as for paying your bill online and in advance. According to Zebra, paying your bill early online saves the average customer $170 a year. Bundling insurance policies, such as combining your homeowners and auto insurance, is another way insurance companies incentivize their policies through discounted rates.

There are usually three types of coverage on any given insurance policy, including liability, collision, and comprehensive. While most states require drivers to carry some amount of liability coverage, eliminating collision and comprehensive coverage could save you up to $900 a year. You may also opt to lower your car insurance premium by raising your deductible from $500 to $1,000. This makes sense if you don’t have a new or expensive car and can afford to pay the deductible if anything were to happen.

3. Outside Financing And Refinancing

One of the smartest ways to avoid high interest rates on a car payment is by securing outside financing. Compared to what the dealership will offer you, this can save you a ton of money in interest alone. Your local bank or credit union can help you shop around for the best offer. If you already have a monthly car payment, the next best thing to do is to look into refinancing your loan. Drivers who benefit the most from refinancing are those who have improved their credit score since initially securing their loan.

Of course if you can purchase a car outright, avoiding any kind of financing is always the very best option. If it’s possible for you to stick to a budget and save up, you may even be able to negotiate a better deal on the purchase price of your desired vehicle. Forty percent of the cost of owning a car is actually depreciation, which can equal more than $3,000 annually. That means that buying a gently used car is a great deal, without the rapid decline in value.

4. Sell One of Your Cars or Trade it Out

If you have a luxury or oversized vehicle, then trading your vehicle or a more practical car is always an option. Once you have a simpler car, you’ll save money on gas, insurance, and even maintenance costs. “Less fancy cars are more reliable,” says editor of Autotrader Brian Moody. “They have fewer gadgets.”

If your family has more than one car, then you may be able to sell one of them and end up saving a lot of money every month. Many families find that they adjust to sharing a vehicle, and when you need your own car for some reason, using Uber or Lyft periodically may still cost less than owning a vehicle. 

5. Save on Gas

Nearly twenty percent of the cost of car ownership comes from fuelling up. Unless your vehicle requires premium fuel, save by filling up with regular gas. You may also choose to slow down as gas mileage increases at lower speeds. If you can, try driving less, such as by walking to close destinations or starting a carpool for work. If you are able to get your annual mileage below 7,500, then your insurance company might even give you a discount on your coverage for that too. 

6. Save up for Maintenance

The cost of vehicle maintenance is equal to fourteen percent of the total cost of owning a car. By keeping up on routine maintenance and using synthetic oil, you will avoid more expensive issues down the road. When a large repair does arise, always call around to get quotes and go with the best deal. Since emergencies happen, setting up a sinking fund for unplanned car expenses is always a good idea. By putting away only $83 a month, you’ll save up $1,000 a year, which could be used for an unforeseen mechanic bill. “You could set aside money every week,” suggests Lauren Fix of Car Smarts. “Then the money will be available rather than using a credit card at a high interest rate.”

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The less money you spend on your car, the more you’ll have for other expenses in your life, from groceries to vacations. With Insureyouknow.org, you can store all of your vehicle and financial records in one place. That way when it’s time to refinance, shop around for better insurance, or sell your car, everything you need will already be at your fingertips. There’s never a good reason to throw away your hard-earned money on unnecessary expenses.

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Saving for Your Next Vacation is Easy With a Plan

November 15, 2023

With world oil prices up, so is the cost of everything else. And now that interest rates are on the rise in an effort to combat inflation, hotel prices have risen by ten percent at many popular destinations. The benefits of traveling though are not worth foregoing due to rising costs. Travel is beneficial to your mental health by helping you feel calm and relieving stress and tension. With a little bit of creativity and determination, anyone can save up for a vacation and even get a great deal on travel costs.

How to Save for a Yearly Vacation

The best way to save for a vacation is to plan for it. If you have a specific trip in mind, start thinking about how much it will cost. Then create what is known as a sinking fund. If you think your vacation a year from now is going to cost $2,400, then put away $200 into an account every month. In a year’s time, you would have what you need for that vacation. If you continued the habit, then you’d have that vacation money saved every year.

When bills come in and unexpected expenses pop up, it can become difficult not to dip into your savings. This is why it’s important to keep your vacation account or sinking fund out of reach. Set up an automatic transfer for your savings every month instead of relying on yourself to transfer the money when you get paid. Gaby Dunn, author of Bad With Money, advises separating your money from your general savings so that you don’t use it for a different expense. “It’s also a good idea to open a specific account just for your vacation fund,” she suggests.

Once you’ve determined how much you’ll need to save, it then becomes time to get serious about sticking to a budget. “Many times, people will design their vacation and then attach dollars to it,” says Jesse Mecham, the founder of You Need a Budget. “But it’s better to come up with a reasonable number first, then whittle away at it when you start planning the trip. The reality is that we have only so much money.”

Budgeting really becomes about determining where you’re wasting money and where you can save money. Here are five easy ways to save for your next vacation::

  • One of the best ways to cut back on spending is to eat out less often and cook more meals at home. “Anyone I’ve talked to who has saved up a lot of money or paid off a lot of debt has cut back on eating out,” says Mecham. “Learning how to meal plan has been the overarching approach that has worked.” It might take some getting used to, but meal planning on the front end of your week can save a lot of money in the long run that you can put toward your travel budget.
  • Study your spending habits and cut back on buying unnecessary items. It might be coffees to-go, books that could have been borrowed  from the library, or impulse clothing purchases. Notice your spending weaknesses and then get disciplined about avoiding  those temptations.
  • You may have some sneaking subscriptions to streaming services, apps, or memberships that you’re not using often enough to make them worth the added strain on your budget. Take an inventory and see which subscriptions you could go without. The twenty or so dollars you’re spending a month on something you’re not even using could easily go toward your sinking fund instead.
  • Savings account interest rates are often higher with online banks than brick and mortar banks. Kelly Johnson of the travel blog, Snap Travel Magic, suggests finding the highest-yield savings account. Then, “Put 5% of each paycheck,” she advises,
    directly into the account.”
  • Use credit cards that reward you, whether it’s a bonus sign-up offer, regular cash back percentages on money spent, or points that can be put toward travel expenses. “Many credit cards offer sign up bonuses in which you can earn free cash back, extra airline miles and travel points for spending a certain amount of money within the first few months of account opening which you can use to cover a big portion of your travel expenses,” says shopping consultant Andrea Woroch.  

The most important thing when it comes to saving for your travel goals may be to stay motivated. Keep in mind why you’re budgeting by placing a picture of your desired destination somewhere you look often or making it the background image on your phone or computer. This way, if you’re tempted to make a purchase through your phone, you’ll be reminded of why you’re working so hard to save money for your dream vacation.

How to Get the Best Deals on Travel Costs

If you’re willing to be flexible with where you travel to, there is another way to score inexpensive tickets. Companies such as Scott’s Cheap Flights and Secret Flying allow you to seize temporary deals. By entering your home airport into Google Flights, choosing a desired departure date, and leaving the destination blank, people can find startling low prices on round trip tickets. This is not to say you should forego your dream trip for a deal on plane tickets. This is just one strategy to consider if you’re more in need of a break than of an actual place you have in mind.

Knowing how to avoid the high season in certain places is an artform worth mastering. Besides dealing with less crowds on your vacation, you can also take advantage of lower prices on almost all of your costs. While school schedules affect peak travel times, time off varies depending on the location. The ideal time in most places is likely going to be in between seasons or “shoulder season,” such as May in tropical destinations and October in colder places, including Europe. A little research will tell you when it’s best to travel to the destination you have in mind.

Next, shop around and compare the prices of hotels and rental properties. For instance, the advantage of having a kitchen in a rental may vary widely based on where you’re going. In some places, it will be less expensive to eat out than to cook and vice versa. Whichever you choose – hotel or rental – pay close attention to reviews, especially with Airbnb, where only travelers who have stayed there are allowed to leave a review.

How to Save Even When Traveling

Once you’ve worked hard saving up for a trip and doing your research to get the best deal on transportation and lodging, you’ll want to avoid getting caught up in the moment on your trip and go crazy with frivolous spending. The biggest trap people fall into is the cost of meals on vacation.

One way to avoid overpriced dining is to eat where the locals do. Walking fifteen minutes in any direction out of the city can make a huge difference. Not only will you spend less at restaurants, but you’ll have a more authentic dining experience. Asking the locals for suggestions is another best practice to find places to eat, as most people will love the opportunity to share their recommendations.

Just as in avoiding the peak time to travel somewhere, the same goes for restaurants. Making reservations a little earlier or later than when everyone else is will cut down on the costs of that meal, as many restaurants provide specials outside of peak times. Another way to budget is to plan on one splurge meal a day. If you eat a light breakfast and grab a small lunch on the go, then spending more on dinner won’t feel as glutiness.

Beyond eating, be open to free activities, and again: do your research ahead of time. There are many museums that offer free or reduced admissions on certain days and times. Then there’s the gardens, parks, and general sightseeing that are always free-of-charge. Always check for local markets to get a taste of local fare and the unparalleled experience of people-watching in a new place.

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Getting serious about saving money for travel will also help you to get your finances in tip-top shape and make the most out of your money in your everyday life. While you keep your eye on your goals, Insureyouknow.org can help you stay organized by storing all of your financial records, budgets, and plans in one place. Making a plan and sticking to it will be well worth it when you have the means to take a well-deserved holiday, perhaps even more than just once a year.

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