How to Buy an Electric Car
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I recently made a good deal on my third electric car, and it reminded me of how different the process is than shopping for an ordinary gas-powered vehicle.
While much of the conventional car-buying advice still applies, there are additional steps that, when done correctly, can save you thousands of dollars. Here’s the strategy I’ve developed over the past 10 years of electric vehicle shopping that will help you get the best deal on the right car.
| Lender | Est. APR | Loan amount | Min. credit score | |
|---|---|---|---|---|
 LightStream - New car purchase loan on LightStream's website | 7.74-
15.69% | $5K-
$100K | 660 | on LightStream's website |
 Auto Credit Express - Used car purchase loan on Auto Credit Express' website | N/A | $5K-
$50K | 525 | on Auto Credit Express' website |
 MyAutoloan - Used car purchase loan on MyAutoloan's website | 7.49-
35.72% | $8K-
$100K | 600 | on MyAutoloan's website |
What incentives and rebates are available?
Without financial help such as incentives, you'll pay much more for EVs than their gas counterparts. Incentives, which vary from one car to another, might also affect which EV you will choose.
There are three general types of incentives:
Cash incentives from your state and local governments and, in some cases, electricity companies.
A federal tax credit of $7,500 if you purchase an EV from a qualifying manufacturer.
Local perks such as access to carpool lanes, free charging and free parking.
Since I planned to get the Hyundai Kona EV, I knew I would get a $2,000 rebate check from California’s Clean Vehicle Rebate Project and $1,500 off the price of the car from my electricity company, Southern California Edison. The car qualifies for the $7,500 federal tax credit as well, bringing the potential amount of support available in my case to $11,000.
Also, I got carpool-lane access, a huge plus in the traffic-clogged Los Angeles area.
Should I lease or buy an EV?
Electric cars often have special financing programs from the manufacturer. To find what’s available, go to the carmaker’s website and look for a tab that says something like “offers” or “local specials.”
You may see both lease and purchase options, but experience has shown me that it’s best to lease an electric car because:
EVs depreciate quickly, 52% in three years, according to Car and Driver. If you purchase an EV and want to sell after, say, five years, you will have lost more money than with a gas car.
The technology is evolving rapidly so your EV will be outdated in three years.
The travel range of electric cars is growing quickly. I got 73 miles per charge in my first EV, the 2011 Nissan Leaf, 103 miles from my 2012 Toyota RAV4 EV and 258 miles in my Kona.
Some EV batteries lose their ability to fully recharge after a few years.
Part of my decision to get the Hyundai (besides good reviews from experts) was based on the manufacturer offering a lease special for that month: $1,999 in drive-off fees and a $199 monthly payment for a three-year lease offering 10,000 miles a year.
To get this relatively low monthly payment, Hyundai reduced the cost of this car, which stickered for $39,000, by a whopping $12,000. That discount includes the $7,500 tax credit, which in the case of a lease goes to the manufacturer, and the $1,500 support from the local utility company.
The other available incentive, the $2,000 state rebate, went into my pocket.
Auto loans from our partners
on Auto Credit Express
Auto Credit Express
N/A
525
on Auto Credit Express
How do I locate the EV I want?
Carmakers produce limited numbers of EVs, so finding the car you want can be difficult. In some cases, in-demand or not-yet-released cars might require you to get on a waiting list. For example, the 2021 Volkswagen ID.4 Pro has a “build and reserve” feature that lets you spec out the car just the way you want.
A local dealer most likely has a demonstrator EV model that you can test drive before you order. If possible, try charging the car at your house to make sure the connector is compatible. Also, experiment with “one-pedal driving” — a popular feature with EV drivers — which means you aren’t constantly moving your foot from the brake to accelerator pedal.
Not all salespeople know about the EVs they have on their lot. Check Yelp reviews for names of informed salespeople or call the sales manager and ask if there's a designated EV salesperson. A great EV salesperson may know of incentives you have missed and contractors who can install home charging units, and they may even help you decide if an electric vehicle is right for your needs.
What’s the best way to close the deal?
If you lease an EV, or any car for that matter, you don’t need to buy an extended warranty because the bumper-to-bumper warranty will be in effect for at least the three years of the lease contract.
Still, the finance manager will probably pitch other extras, such as a warranty covering excess wear and tear, wheel and tire damage and windshield repairs. These warranties are expensive (in my case it would have added over $1,000 to my contract), and the cost often outweighs the benefits for drivers, according to Consumer Reports.
If you decide to purchase and haven’t put much money down, consider adding gap insurance. Severe depreciation could leave you owing more than the car is worth if it is totaled in an accident. Your insurance company may offer a better price than the dealer can.
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