Car ownership is, in many parts of the country, a necessary evil. You need one if you want to access local services, run errands or visit friends and family, but traditional vehicles are a threat to the environment. They power our massive appetite for oil and contribute to ecological destruction. That’s why, if you’re going to drive, it’s worth investing in an eco-friendly vehicle if you can.
Whether you choose a fuel-efficient hybrid or a fully electric car, you’ll want to look into smart financing options to help you afford it — keep these four tips in mind as you shop.
1. Choose a Cheaper Model
Many people don’t realize how extensive the options are when it comes to eco-friendly vehicles. Because of this perspective, buyers often end up purchasing the newest, most-hyped vehicles without considering the range of fuel-efficient economy cars that could also fit the bill. You might also look at old electric or hybrid vehicles to cut costs.
Consumer Reports is a good resource when researching marketplace options. Their list of fuel-efficient vehicles includes both hybrids and standard options, making it a perfect tool for comparing competitive options point by point.
2. Assess Your Loan Options
The costs of an eco-friendly vehicle are contingent on several factors that go beyond the vehicle itself — for example, your credit score. Buyers with a better credit score will get a lower interest rate on their loans, while those with a weak credit score will pay above market rate. It’s generally worth spending time to improve your credit before buying a car in order to gain long-term savings.
It’s also important to finalize your loan before you make a purchase. Lenders are fickle and a quote is just that until the papers are signed. Secure your rate before you buy. While you may be able to refinance your loan down the road if your credit score improves, it’s better to get the rate you want — and deserve — from the get-go.
3. Calculate Your Short- and Long-Term Savings
If you’re going to buy a hybrid or electric vehicle, it’s important to account for costs — or savings — beyond the ticket price that affect your overall investment. For example, your loan rate, as mentioned above, will impact how much you actually spend on your car in the long run. Similarly, fuel efficiency is a factor in your ultimate costs — gas is expensive and if you’re buying less (or none at all), then you’re going to save.
One of the most common savings factors with hybrid and electric vehicles is the associated tax credit. The highest-performing electric vehicles, like the Chevrolet Volt, qualify for a $7,500 federal credit in addition to any state credits in your area. Just drop that credit from the overall vehicle price for a more accurate calculation.
Another way you can save money on a hybrid or electric car is via your insurance. Certain insurers offer discounts to hybrid and electric car owners to encourage these purchases. Calculate this discount over the years you’ll own the car and you could be looking at serious savings.
4. Get in Early
Though we recommend getting your credit score in order before buying an eco-friendly car, don’t wait too long. The tax credits currently available to buyers are restricted to a certain number of sales as part of an economic stimulus package. Right now, sales are low enough that they shouldn’t end too soon, but that sales spike may be coming.
For those concerned with the environment, the current hope is that electric carmakers will step up soon with cheaper, urban models that meet the needs of a wider set of drivers. The market could also benefit from increased educational efforts around electric vehicles — consumers just don’t know enough about them to make an informed choice.
For the sake of the earth, we need more drivers to adopt hybrid and electric cars — if you can swing it financially, it’s worth the investment.