Whether you love it or hate it, America is built for cars. Although there are cities with great public transit, a personal vehicle is often needed to get around. But owning a car can be a challenge if you’re living on a fixed or low income.
Between the fluctuating cost of fuel, regular maintenance and unexpected costs, car expenses are notoriously uncertain and budgeting can be tricky.
Luckily, electric cars can be a great option for people on a fixed income. While you’ll still encounter the occasional flat tire or chipped windshield, EV expenses are more predictable, which could save you money in the long run.
Electric vehicles have more predictable costs than gas cars for two main reasons:
Electric fuel costs are generally cheaper and definitely more stable. Where gas prices vary over time and by region, even station to station. Prices for electricity are less volatile. Over the past 10 years, gas prices have fluctuated from below $1.50 a gallon to over $5 a gallon. Meanwhile, there is a slow but steady increase in electric prices. The chart below, using data from the Bureau of Labor Statistics, compares the price trends in gasoline (purple) with electricity (the thin turquoise line near the horizontal axis).
Today, the average EV driver pays about $1.22 to go the same distance a traditional car can travel on one gallon of gas. If you’re on a tight budget, anticipating the cost of your electric bill is much easier than guessing how much you’ll need to set aside for gas, especially over a few year horizon.
Electric cars also have lower maintenance costs – and less scheduled maintenance – than internal combustion engine cars. There are fewer fluids to replace, fewer moving parts that can break down, and regenerative braking helps your EV’s brake system last longer, too. The one exception to this can be the need to replace EV tires more frequently, but only if you’re really driving pedal to the metal.
More than 90% of low-income, vehicle-owning households in the U.S. would see a reduction in transportation costs by switching to EVs, according to a study by the University of Michigan.
But there are a few demographics, often working with fixed budgets, that could particularly benefit from EV ownership.
About 11% of EV drivers are over age 65. Retirees who no longer have a daily commute may not need or want a loud, clunky gas guzzler, or the associated worry about gas prices. Almost all EVs have sufficient range for getting around town, and their lower maintenance and energy costs mean seniors on a fixed income can stay within their budget while still enjoying the freedom of owning a car.
Technological advances make it even easier for seniors to get around. Electric cars are quiet, which is helpful for those with hearing or sensory issues. New cars are equipped with large screens and back-up cameras for added safety, along with autonomous driving and assisted parking features. EVs often have a low center of gravity, making them easy to handle and safer in a crash. With more seniors choosing to live in retirement communities, an electric car could be the thing that helps them feel active, comfortable, and connected to their lives inside and out., an electric car could be the thing that helps them feel active, comfortable and connected to their lives inside and out.
No one wants to worry about car maintenance while working on their degree. Used electric cars are a particularly great option for students who usually have a pretty fixed commute and often live close to school. A student with this setup can easily find an inexpensive and reliable EV with enough range to get to and from class without worrying about constant tune-ups and ever fluctuating gas prices. Many colleges and universities are investing in on-campus charging stations so a short-range EV can still make the trip. Plus, the largest group of EV buyers are under 25, and most students are too so a short-range EV can still make the trip.
If your child is not yet in college, a short–range EV may be a great option. They can get around town without you worrying that they will go too far afield. Plus, with an after-school job, your high school kid may be able to help cover the lower costs of an electric car.
With child care costs rising across the country, many families are opting to have a parent or caregiver stay home with young children. In fact, 1 in 5 parents in the U.S. focus solely on home and child care. Even without a commute to work, these parents often need to get around town to doctors’ appointments, school and social events, grocery stores and dozens of other places.
An electric vehicle can help parents get where they need to be.
Stay-at-home parents tend to have more limited range needs, and they may not need to use the car every day. An electric car can keep the gas bill down and is reliable enough to not interrupt a busy schedule. They can even serve as backup for a gas car in two-car households. Plus, they’re quiet, so they won’t wake up the kids during naptime. That might be worth more than the financial savings!
Despite the lifetime cost savings of an electric car, the initial purchase price can be higher than a gas car, and that may put EVs out of reach for some fixed-budget households. Although, EV prices are coming down, and there are several affordable options on the market. There are programs designed to help low-income people afford the switch to EVs, but more are needed to make access to electric vehicles equitable.
Also, the cost savings and convenience of an electric car hinges on the ability to charge at home. There are plenty of places to charge your electric car, and more are opening every day, but depending on where you live, it may eat up your savings to rely on public chargers.
Even so, it’s worth checking the math. Used EV tax credits can really help offset the up-front costs. Electric car owners who can charge at home save roughly $1. Over the lifetime of the car drivers can save $6,000 – $10,000.
If you’re on a tight budget or a fixed income, an EV could be the perfect car for your needs.
Visit Recurrent to learn more about electric vehicle battery health.
This article is originally researched and written by the team at Recurrent.
AAA’s Recommendation: Whether you own an electric vehicle or a gas-powered car is up to you – and you should consider lots of factors in making that choice. No matter what type of vehicle you’re choosing, we recommend visiting a dealership, test driving one, and asking as many questions as possible to make an informed decision.
