Buy an Electric Car to Save Money on Gas

"A typical driver will save about $80 a month from not having to pay gas at the pump"

President Joe Biden

That is a good point.  One can save on gas by just not having to buy gas.  However, is it cheaper to buy an electric car?  If you have a working car, getting a new car is automatically much more expensive.  That car payment will be much more than $80 a month.  If you have a working car, don't try to save money by buying an electric car.  I don't think the president was suggesting that you take on a new car payment to save on gas.  However, what if you are in the market for a new car and have a choice between electric or gas?  In that case, the president is encouraging the purchase of an electric vehicle rather than a gas one.  Will that save money?  Let's run some numbers.

Step One: What electric vehicles are available and how much do they cost?  One of my first hits for that was this webpage.

The least expensive car on the list was the Nissan Leaf for $27,400.  It has a base range of 149 miles per charge.  The Tesla Model 3 is listed at $40,690 with a base range of 267 miles.  In both cases, I chose the least expensive model (i.e., no extended range with battery upgrade, etc.).

Step Two: What gas cars are available and how much do they cost?  I went looking for inexpensive cars (we're trying to save money, after all) and found this webpage.

The least expensive car was the Chevrolet Spark for $14,595.  It has a 9 gallon tank and gets 33 mpg, giving it a range of 297 miles.  The most expensive car on this list was the Nissan Sentra at $20,635.  It also gets 33 mpg but has a 12.4 gallon tank, giving it a range of 409 miles.

Step Three.  What is the car payment?  Using myself as the buyer, I found that I could get an interest rate in the range of 2.25% to 3.24%.  Let's split the difference and use 2.75%.  Also, I will go for a 5 year loan.  Let's run the numbers:

Make Model - Monthly Payment

Chevy Spark - $260.63

Nissan Sentra - $368.50

Nissan Leaf - $489.30

Tesla Model 3 - $726.63

The most expensive of the gas cars is over $120 cheaper per month than the most inexpensive electric car.  Both of the gas cars can go further on a tank of gas than either of the electric cars will go on a charge.  Though I fully expect electric cars to eventually overtake gas cars, that time has not yet come.  If you need to buy a new car, the electric will not save you money.  Of course, this calculation might be different in California, where the gas price is dramatically higher.