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During last year’s stretch of record-high gas prices, a lot of people were rethinking how and when they used their car, and considering alternative options. Not everyone is able to walk to work and to run errands, and outside of major cities, there’s not much in the way of public transportation in the U.S. So naturally, some people looked into getting electric vehicles.
While the idea of saving money on gas is certainly appealing, that’s only one financial aspect of car ownership. In fact, owning an electric vehicle comes with several hidden costs. Here’s what to know.
The hidden costs of owning an electric vehicle
First, we should point out that while electric vehicles may have hidden costs of ownership that consumers may not factor in, overall, they tend to be less expensive over time. A 2020 report from Consumer Reports found that the lifetime ownership costs of the latest generation of electric vehicles were an average of between $6,000 and $10,000 less than their gas-powered counterparts.
Having said that, here are some costs of owning electric vehicles that you shouldn’t overlook:
Higher initial investment: In 2021, new electric cars cost roughly $10,000 more than the industry average, according to the National Resources Defense Council.Pricey repairs: On average, repairs for electric vehicles were 1.6 to 2.3 times higher than the equivalent gas-powered car, thanks to higher costs of parts and labor, according to J.D. Power. Higher insurance rates: Car insurance premiums are an average of 15% higher for electric vehicles, per MoneyGeek.Additional registration fee: Currently, 31 states charge a special registration fee for plug-in electric vehicles (18 states also charge a fee for plug-in hybrid vehicles), according to the National Council of State Legislatures.
