In a consumer poll recently taken, the biggest concern is the economy and within the economy is inflation, and the cost of living increases. One of the hottest topics is the increase in gas prices, which is now leading families to consider, should they purchase another gas vehicle or an electric vehicle? Perhaps you are asking yourself the same question. But will acquiring an electric vehicle will reduce your vehicle spending cost. Let’s take a look.
Currently, purchasing an electric vehicle will cost you more than a gas contemporary or equivalent. But that should not deter you from making such an investment when you consider the federal tax credit available for the vehicle of your choice. The critical question is whether there are still federal tax credits available when you are ready to purchase the vehicle. Federal tax credits are available to most manufacturers and or dealerships for selling electric vehicles. But once a manufacturer has sold more than 200,000 eligible vehicles, the credit phases out. If you want to get a break on purchasing an electric vehicle, you will need to get in the game early or face higher costs.
While the number of vehicles sold may impact the cost, perhaps I should clarify some language. There is a technical difference between an all-electric vehicle and Hybrids. An electric vehicle is a battery electric vehicle (BEV). Meaning, all the operation of the vehicle comes from stored battery power. There is no gasoline whatsoever!
On the other hand, hybrids nor plug-in-hybrids vehicles PHEVs) do not qualify as electric even though they may operate to some degree on electric. Therefore, your hybrid may not be eligible for all-electric (EV) tax credits. If you need information on credits on electric vehicle models and credits, go to: https//fueleconomy.gov/feg/taxevb.shtml
Without any idea where gas prices are headed, the prospect of $5.00 a gallon for regular gas seems more likely daily. But what continues to be a challenge for EV owners are charging options. Your best bet is to upgrade your home electrical power from 110-volt to something more like a 220-volt line to charge your vehicle at home. You will also have to attach a recharger unit from the manufacturer or an after-market manufacturer. The recharger unity alone can cost an estimated $300-$700. Therefore the set-up for charging at home could cost a few dollars. However, the payoff is in your reduced or eliminated gas bill and a slight increase in your electric bill. Current estimates indicate that charging your EV at home will increase your monthly electricity bill by $30-$60 per month. It seems like a no-brainer, given that most people are spending that amount each week on gas. The best way to calculate your saving before making a move is to examine your current electricity bill, which should show how many kilowatt-hours (kWh) you currently use and how much you pay per kWh. A kWh is equivalent to the amount of energy it takes to run a 1,000-watt appliance for 60 minutes. Once you figure out that calculation, the savings should be pretty apparent to you compared to your monthly gas bill. Let me put it this way; the national average KWH usage is a few cents compared to a gallon of regular gas.
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Today’s what’s up is about getting your kids, cousins, nieces, and nephews to save money. How do you get teens and preteens to save? One way is to add an incentive that you will match or double whatever they save towards a down payment or acquiring a vehicle for them to drive. Generally, this saving thing must begin way before they acquire their permit. We all know how eager teens want to get on the road. This will also provide a sense of accomplishment in meeting attainable goals. Find ways to encourage your kids to invest in a mutual fund or one stock and watch them learn the early money management principles. And that’s what’s up! Let’s talk Money Monday fundamentals on the Zoom Conversation on March 28, 2022, at 7:00 p.m. Sign up at: https://bit.ly/TTCM_Register
Ruthven R. Phillip, Esq., is a tax attorney, Stewardship and Philanthropy Ministry Assistant, and CEO of Give2Getrich, LLC. Give2Get Rich, LLC 2022. All Rights Reserved. Any distribution or reproduction of part or all of the contents in any form is prohibited.