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Just over a decade ago, during the summer of 2008, the U.S. saw an unprecedented spike in oil prices which completely transformed the way we look at gas-powered vehicles. Fuel economy became a highly sought-after feature in cars, as drivers looked to offset the rising prices at the pump and put less of a strain on the environment (and their wallets!). While gas prices have dropped, the demand for efficiency has not, and now the market is full of fuel and energy efficient cars to choose from—it’s just a matter of choosing which one is right for you! Today, there are three main types of energy efficient cars: gas-powered fuel efficient, hybrid, and electric. Each type of car is designed to use less gasoline and reduce a vehicle’s carbon footprint—but how exactly do they differ? How much energy do they really use? And, if you’re looking to get the best deal, how much gas a car uses isn’t the only factor to consider. What about maintenance, tax credits, or depreciation?
Learn all about the true cost of energy efficient cars with Loan Center’s new infographic, Energy Efficient Cars: How Much Are You Really Saving At the Pump? This infographic explains the benefits of fuel economy and breaksdown the long-term costs of different energy efficient car models, giving you detailed insights into what vehicle might be the right choice for you. Read on to learn more these amazing cost effective cars:
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Electric cars may be the energy-efficient solution for the future of the environment, but these vehicles are nothing new. According to PBS, the first electric carriage was introduced in the mid-1830s. This paved the way for other electric automobiles, and, later, for the low-emissions vehicles we have embraced today—including the Toyota Prius and Tesla models.
Eco-friendly options are vast as many automobile manufacturers have embraced and invested in designing cutting-edge models that don’t rely solely on fossil fuels. While some of these greener vehicles run only on electricity, others like the Prius rely on by both conventional gasoline and electricity—this is known as a hybrid. Traditional vehicles run solely on fossil fuels that increase pollution and contribute to environmental concerns, but hybrid models and electric-only automobiles reduce emissions and help drivers cut fuel costs.
The drive toward more sustainable living and eco-friendly lifestyles has propelled the demand for energy-efficient vehicles, with many drivers keenly eyeing the cost-savings models that boast the most miles-per-gallon and the option to plug-in instead of paying at the pump.
Although automobile manufacturers are quick to tout the benefits of the electrical or hybrid options, how do these models stack up to their conventional counterparts? And how much are consumers really saving at the pump?
To make the decision to switch out the gas-guzzler you currently drive to a hybrid or electric model, buyers really need to look at the investment from every angle. Because the story doesn’t begin or end at the pump.
New and used cars come in every make, model and price range. Electric-only or hybrid models tend to carry a higher base price. Buyers can expect to see price tags from the mid-20Ks and up for hybrid models. A Ford Fusion—which is an electric-fueled model—may begin around the mid-20Ks as well, but many other electric-only options start in the mid-30Ks.
Many consumers are familiar with Tesla’s electric option, and while a new Tesla can save lots of money from the gas it doesn’t guzzle, the price tag is typically quite steep. But while a new Tesla might destroy your budget like Godzilla in a metropolitan city, a used model might be the more affordable option. For a used Tesla, expect to spend at minimum around $40,000. And that’s a conservative estimate.
Fossil fueled-powered cars, however, can be found for much lower price. If you shop used, you can find a car for whatever budget you need. While you might not get the prettiest model or the lowest miles, a used car is almost always an option for most buyers.
Before you make the decision to splurge on an eco-friendly ride, you must look at your budget to see if these models are even an option. If your credit is bad, you might not qualify for the best loans or even be a candidate for a lower-price lease option. However, those with great credit may be able to negotiate lower interest rates to find a price point that might work.
Of course, your down payment can lower the monthly loan rate, too. And if you have a trade-in, expect to snag more dollars off the sale price. According to Nerd Wallet, you should not allocate more than 20 percent of your take-home monthly income (that’s the number you make after taxes and other deductions) for transportation costs. This includes monthly payments, gasoline and repairs. If you take home $5000, then you can expect to allocate $1000 for your vehicle costs.
Some conventional automobile options are known for sucking gas and costing owners more at the pump. Large SUVs and some trucks might not be the most cost-saving options for vehicles. But some sedans also may secretly siphon money out of the gas tank, too.
So when you’re looking at saving money at the pump, and you’re eyeing electric and hybrid options, you need to compare these eco-friendly models to traditional options on the market. Yes, hybrid and electric options use less or no fossil fuel, which saves owners money. The trick to finding out how much you will save with different models—hybrid or traditional—means looking at one big number on the sticker: miles-per-gallon or MPG.
The number of miles a car can drive on one gallon of gas will give you a fair estimate as to how much you’ll pay each week or each month on gasoline. But there’s still more to that story. Some hybrid models might require premium gasoline, which will increase your fuel costs. Every model and make is different.
Of course, electric only automobiles figure costs differently. Instead of looking at miles-per-gallon, the cost of electricity needs to be estimated. You’ll likely plug your car in at home, which means the cost of your vehicle will directly impact your electricity bill. Before investing in an electric-only option, review the cost of your monthly electricity usage and then figure in the electrical costs of running your eco-friendly automobile.
Edmonds makes the question of electricity cost a bit easier to digest for money-saving consumers. The site estimated the cost of running an electric-only car according to the national average cost of electricity—12 cents per kilowatt-hour. Edmonds estimated that it would cost around $3.50 to drive a 2013 Nissan Leaf 100 miles. In gasoline MPG terms, this would be about 35 cents per gallon. And the best part? Plugging in at sites around town that offer electricity to eco-friendly cars may even be free! Some cities are more electric-friendly than others, however, so buyers also may find their options limited when they need to recharge their car. If you’re committed to electric over gasoline, download the Newmotion app to find the closest EV charging locations in every city.
However, Edmonds also notes that not every state or city in the country boasts the same low-rate for electricity. The site referenced that Hawaii charges about three times the national average per kilowatt hour, which dramatically increases the cost of an electric-powered or hybrid automobile. That eco-friendly vehicle may cost much more depending on where you reside, and gas-fueled models might still be the cheaper option.
Consumers care about the budget bottom line, but the savings and impact of hybrid and electrical options go beyond the pump. According to the U.S. Energy Information Administration (EIA), in 2017 Americans consumed “a daily average of about 391.40 million gallons” of gasoline. Not only does this represent billions of dollars in spending, but the use of so much fossil fuel also impacts the environment and our individual carbon footprint.
Every gallon of gas that is burned in the engine is emitted into the environment as carbon dioxide. So just how much carbon dioxide is emitted? According to estimated numbers compiled by the EIA, “U.S. motor gasoline and diesel (distillate) fuel consumption for transportation in 2016 resulted in the emission of about 1,102 million metric tons of carbon dioxide (CO2) and 437 million metric tons of CO2, respectively, for a total of 1,540 million metric tons of CO2.”
For many buyers, the choice between saving money at the pump and plugging in at home comes down to impact on the environment. Not only do many hybrids and electrical vehicles offer better mileage at a lower cost, but they also support a greener lifestyle. And as long as the costs don’t break the bank, consumers are choosing to drive cleaner and swapping out their gas guzzlers for electrical eco-consciousness.
So should you trade in your conventional automobile for a hybrid or electrical model? The answer isn’t cut and dry. Hybrids and electrical automobiles come with a higher sticker price, which means that monthly payments also will be higher. For those on a low budget or for buyers with poor credit, affordable payments might not be feasible. If a buyer has a title loan against an automobile, this also needs to be paid off before the car may be traded-in for a newer model. And this means that conventional automobiles may still be the best—and most affordable—option for consumers struggling with debt or living paycheck-to-paycheck.
However, for consumers who can afford a down payment and who have the financial means to afford a higher monthly lease or loan payment, then eco-automobiles can be a smart choice for long-term savings at the pump. While the price tag is more expensive, the cost savings will justify the sticker price in the long run.
Not every eco-friendly model is a fit for every buyer. So before you commit to splurging on a hybrid or an electrical-powered automobile, research the different options and then schedule a test drive for your top choices. No matter how cost-efficient a vehicle may appear when reviewing raw numbers of MPG, buyers also need to feel comfortable driving the car. If you’re in financial situation you might take a look at some different options for funding. Some models may be too small or too tight or you might not like the feel on the road. As with any major purchase, do your homework, crunch your numbers and take your time before you sign off on the loan terms and drive the car off the lot. Eco-consciousness is an investment, and, for many buyers, a luxury. Be sure it’s a luxury you can afford—at all costs.
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