Alternative fuel-powered vehicles are coming into their own. For one thing, vehicles billed as “environmentally friendly” are no longer the purview of only the “granola” or the wealthy; well-known car makers are manufacturing mid-market options and middle class families with everyday earth-friendly goals are able to own and drive cars that aren’t only powered by gasoline. But as more and more people broaden their horizons and consider green cars as they shop for a new vehicle the question of how much it really costs to own a traditional gas-powered car or an alternative-fuel powered one. So when it comes to green cars vs. gas guzzlers, which is more affordable?
First, what qualifies as a “green” or alternative-fuel vehicle?
According to the Consumer Energy Center, these would include vehicles powered by biodiesel, compressed natural gas (CNG), electricity (EVs), ethanol (E85), hydrogen and fuel cells, liquefied natural (LNG) or petroleum (LPG) gas, LPG and CNG conversions, and neighborhood electric vehicles.
If you’re deciding between a green car and a gas-powered one based on environmental concerns alone, the answer is simple: “The cars and trucks we drive are responsible for about a fifth of greenhouse gas emissions in this country,” writes NPR. Yikes. You don’t want to be a part of that.
There are, of course, many other concerns to take into account when shopping for a car: safety, performance, aesthetic and comfort features, and seating and storage needs, among others.
But, not all of us have the luxury of choosing our vehicles based solely on our values. One of the biggest factors when choosing a car is its price. So given the increasing consumer interest in green cars, we wanted to know what type of fuel-powered vehicle offers a better value in the long term, with the hope of figuring out whether climate-friendly cars can be as affordable, or even more affordable, than traditional gas-powered cars.
Unfortunately the answer to the relative financial cost isn’t a simple one: each person must factor in where and how they live and drive and how much different types of energy cost where they live. Yet although answer might not be simple, it is discernible, and we have a step-by-step guide to help you consider the three most expensive – and most essential – aspects of car ownership: the vehicle itself, the fuel costs, and the insurance costs.
1. Vehicle Price
The specific vehicle you purchase will of course affect both your initial cost and the lifetime cost of ownership. As NPR reports, energy scientists at the Massachusetts Institute of Technology published the results of a comprehensive study of 125 of the most popular vehicles in the U.S. They looked at what all available fuel types cost when maintenance and operating expenses were included:
We decided to take a careful look at a few of the most and least climate-friendly cars of 2016. (We excluded luxury vehicles from our examination both because few people can actually afford them and because, hey, if you can afford to spend upwards of $80,000 or $100,000 on a car, overall cost of ownership is most likely a less crucial concern.)
According to the EPA, the average vehicle mileage for all 2015 vehicle models was just under 25 miles per gallon (mpg). More climate-friendly cars, then, would get more than 25 mpg, and less climate-friendly cars would of course get fewer than 25 mpg.
We looked at several 2016 guides to alternative-fuel and gas-guzzling vehicles (including research from Consumer Reports, greencars.org, 24/7 Wall St, fueleconomy.gov, and Autobytel) in order to compare vehicle prices. Below, five of the most climate-friendly cars and their starting MSRP, and five of the worst gas-guzzling offenders with the same details:
- Chevrolet Spark EV: $25,120
- Toyota Prius ECO: $25,165
- Ford Focus Electric: $29,120
- Nissan Leaf: $30,680
- Chevrolet Volt: $33,220
- Ford Mustang: $24,645
- Dodge Grand Caravan GT: $29,995
- Infiniti QX50: $34,450
- Dodge Charger R/T 392: $39,000
- Ford Expedition EL: $46,000
From these 10 examples, it’s clear that the starting MSRPs aren’t appreciably different between the greenest and least-green cars. Not only is it possible to purchase a climate-friendly car for a similar price as a traditional gasoline-powered one, it’s possible to purchase one of the most climate-friendly models for less than the average amount ($33,340) people in the U.S. spend on a new vehicle of any type.
An interesting note: according to a few different guides to the biggest gas-guzzlers, ultra-luxury gas-powered cars often get the worst mileage per gallon of vehicles of all types. All but one of MarketWatch’s 10 biggest gas guzzlers cost more than $100,000, and all but one of Autobytel’s 10 biggest gas guzzling sedans cost more than $70,000. Of 24/7 Wall St’s top 10 gas guzzlers, no car cost less than $120,000 (except for cargo vans, which aren’t usually used as personal passenger vehicles) and a few cost more than $1 million dollars.
2. Annual Fuel Expenses
The average person in the U.S. drives 10,900 miles each year, according to AAA. But as far as fuel prices go, where you live can have a significant impact on how much it costs to power your car, for both gas-powered and alternative-powered vehicles. Gas prices vary region to region throughout the U.S. – a familiar concept to drivers – and the average gas price across the U.S. in December 2016 is $2.208 per gallon.
The cost of energy to power an electric vehicle differs by quite a lot state to state, too. Energy is measured in kilowatt-hours (energy you use to turn on your lights, run your A/C, and energy you’d use to charge an electric vehicle). The average cost per kilowatt-hour (KwH) in the U.S. is $0.12, but there is a lot of variation state-to-state, from $0.33 in Hawaii to $0.08 in Idaho, so you’ll need to run your own numbers to get a true picture of your energy costs (this chart will help). You’ll also want to factor in when you plan to charge your electric car as many places increase rates for peak electricity use times.
To compare the average cost of one year of power (gasoline or electricity) for five of the most gas-guzzling vehicles with five of the most climate-friendly ones, we used an average mileage of 10,900 per year, an average price per gallon of gas of $2.208, and an average price per KwH of $0.12.
- Chevrolet Spark EV: 128 MPGe (mile-per-gallon equivalent), 3.53 KwH per mile / $370.54 average cost to keep it charged for one year
- Nissan Leaf: 107 MPGe, 3.38 KwH per mile / $386.98
- Ford Focus Electric (with battery use only): 100 MPGe, 3.1 KwH per mile / $421.94
- Chevrolet Volt: 42 MPG for gasoline operation / $573.03 average gas cost per year; 105 MPGe, 3.09 KwH / $423.30 average electricity cost per year
- Toyota Prius ECO: 56 MPG / $429.77 average gas cost per year (the Prius runs on gas and electricity but charges as it is driven and so therefore never needs to be plugged in)
- Ford Expedition EL: 14 MPG / $1,719.09 average gas cost per year
- Dodge Grand Caravan GT: 17 MPG / $1,415.71
- Dodge Charger R/T 392: 18 MPG / $1,337.06
- Ford Mustang: 19 MPG / $1,266.69
- Infiniti QX50: 20 MPG / $1,203.36
*Here’s the simple formula we used to calculate electricity costs (explained in more detail by Chevrolet Volt-enthusiast Patrick Wang here): miles driven divided by miles per kilowatt hour times cost per kilowatt hour.
An added cost to consider for electric cars: where you charge.
Electric cars can be charged at home (with an installed home charging station) or at a public charging station (often for free at some businesses like Whole Foods). Charging stations still tend to cluster around big coastal cities, and certain electric car makers (like Tesla) build and maintain charging stations only for their particular vehicles, so just because you have an electric car doesn’t mean you’ll be able to use any charging station.
Home charging stations cost about $500 plus installation costs, on average; however your state, energy company, or the carmaker itself might offer incentives to soften that price. One Nissan Leaf owner said his energy company paid 50% of the cost of buying and installing a charger in his family’s home, and he was able to take advantage of a 30% tax credit for the charger cost and installation offered by the government, meaning his actual personal cost was just a fraction of the original price.
Based on the 10 cars above, we can see that the difference in cost between paying to power an alternative-fuel vehicle and a traditional gas-powered vehicle (not factoring in home charger costs, tax incentives, or other costs) can be as much as $1,350 a year, on average.
3. Annual Insurance Premium
The price of the car and the gas mileage aren’t the only concerns when determining overall vehicle price; insurance is another important cost consideration. In fact, with lower gas prices nationwide over the past year, insurance is the greatest car-related expense after the vehicle itself, and it can vary quite a bit based on the type of vehicle.
Our latest research examined the average insurance premium cost in the U.S. for the most popular makes (by year-end sales) of the following types of vehicles: luxury, green (hybrid and electric cars), sedans, vans, SUVs, and light trucks. The current average insurance rates for 2016 models for each vehicle type:
- Luxury: $1,751
- Green: $1,537
- Trucks: $1,451
- Sedans: $1,438
- SUVs: $1,300
- Vans: $1,295
Though luxury vehicles are the most expensive type to insure, on average, green cars are the second most expensive. In fact, it costs about $100 more per year to insure a hybrid or an electric car than it does to insure a gas-powered sedan, and about $240 more per year to insure a green car than it costs to insure both a gas-guzzling SUV and a van.
Keep in mind that each driver’s auto insurance premium will vary based on a variety of factors including where you live, your credit score, driving and insurance history, age, etc, as well as your chosen auto insurance company.
The specific cars included in our research:
- Green cars: Nissan Leaf, Chevrolet Volt, Ford Fusion Hybrid, Toyota Camry Hybrid, and Toyota Prius
- SUVs: Chevrolet Equinox, Ford Escape, Ford Explorer, Honda CR-V, Jeep Cherokee, Jeep Grand Cherokee, Jeep Wrangler, Nissan Rogue, Subaru Forester, and Toyota Rav4
- Trucks: Chevrolet Silverado, Ford F-Series, GMC Sierra, Nissan Frontier, Ram P-UT, Toyota Tacoma, and Toyota Tundra
- Vans: Chrysler Town & Country, Dodge Grand Caravan, Honda Odyssey, and Toyota Sienna
Green Cars vs. Gas Guzzlers: Who Wins?
We looked closely at the three highest cost essentials for owning a car (vehicle price, price to fuel, and insurance price), but there are lots of other maintenance and operational costs to factor in. For instance, fully electric cars will never need an oil change, and their transmission (and all other engine parts, for that matter) will never need replacing, but with several models, the batteries may need replacing, which can be quite costly.
For the purpose of this exploration, however, we’ll stick to MSRP, fuel and insurance, which seem to indicate that among some of the most popular vehicles of each type, it truly is affordable to opt for a green car.
The Future of Green Vehicles
Many automakers are working hard to phase out gasoline-powered vehicles in accordance with the U.S.’s current climate agreement and to meet growing consumer interest in climate-friendly cars.
We support consumer behavior that lessens the environmental impact so if you’re planning to shop for a climate-friendly car, check out everything the green car shopper needs to know. We’ve also looked at the differences between Battery-Powered Electric Vehicles (BEVs) and Hydrogen Fuel Cell Vehicles (FCVs). FCV are still a small part of the market and infrastructure to support them really only exists in the San Francisco Bay Area and in Los Angeles, though it’s expanding.