Demand for electric vehicles continues to rise, but the high price tag of electric vehicles has kept many drivers away. Tax incentives have made them a little more accessible in recent years, but the rules keep changing.
You're probably here because you're interested in purchasing an electric vehicle but aren't sure whether to buy in 2024 or wait a little longer. The answer's not as clear cut as you might think. Below, we'll look at the pros and cons of buying next year.
Three reasons to buy an electric car in 2024
Here are some reasons you may want to buy your electric car in 2024.
1. Tax credits are getting more flexible
This year, you can claim a tax credit of up to $7,500 for purchasing an electric vehicle. But to get that tax credit, you'd have to wait until you file your 2023 taxes. The credit will reduce your tax bill for the year, but if you owe less than the tax credit -- for example, your tax bill is $4,000 and your tax credit is $7,500 -- you'd just lose the rest.
But things are changing in 2024. You'll have the choice between claiming the tax credit at the end of the year, as you can now, or applying it as a discount to your purchase price. This new option could enable you to afford an electric vehicle you may not have otherwise been able to, if you had to wait until tax season for your credit.
2. It could save you a lot on gas
Once you get past the upfront cost, you could save quite a bit with an electric vehicle. The U.S. Energy Information Administration (EIA) estimates that gas prices will rise to $3.61 per gallon in 2024. If your current vehicle holds 15 gallons of gas, that's about $54 every fill up. You could keep that money in your pocket if you had an electric vehicle.
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Of course, electric vehicles still have costs too. You'll need to charge them regularly. But this will most likely be cheaper in the long run than paying for gasoline.
3. You have more options than ever
Manufacturers are continuing to invest in new electric vehicle models and to enhance the capabilities of existing models. This gives drivers who are interested in electric vehicles more options than they had in years past. Used electric vehicles are also coming up for sale, which opens the door to a new set of customers who may not have been able to afford a new vehicle.
Two reasons to wait on buying an electric vehicle
Here are some reasons you may not want to buy an electric vehicle in 2024.
1. Things can always get better
It's likely that auto manufacturers will continue to release new electric vehicles, and these future models will likely have longer ranges and better features. The pace of innovation is quick right now, so even waiting a year or two might give you a much better selection of options.
2. Even with the tax credit, they're not that affordable
New electric vehicles cost about $53,469 on average, according to Kelley Blue Book. Even if your vehicle qualifies for the $7,500 tax credit -- and not all of them do -- that still leaves you with roughly $46,000 you have to finance on your own. That's tough for a lot of people.
What's more, auto loan rates are pretty high right now. This can make taking out a loan for an electric vehicle even more costly.
Auto insurance rates will likely be higher as well. Electric vehicles are typically more costly to repair due to their unique components and the fact that there are fewer technicians skilled in this type of work.
If you don't think you can squeeze payments and insurance costs for an electric vehicle into your budget, you may prefer to wait until electric vehicle prices and loan interest rates begin to fall.
It's your call
Ultimately, the decision about whether to purchase an electric vehicle in 2024 rests with you. It doesn't hurt to test drive a few and price them out to see what fits in your budget. But don't make any decisions until the government publishes its list of which vehicles qualify for tax credits in 2024. This will be found at FuelEconomy.gov.
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FAQs
Burgeoning inventories and dropping prices combined with discounts typically are virtual green lights for EV shoppers who've been waiting to buy. There are compelling reasons to buy in 2024. Many EVs are eligible for federal EV tax credits of up to $7,500.
Will EV prices go down in 2025? ›
The good news at the moment is that EV battery prices are expected to drop a lot in 2024 and 2025. That's according to a recent analysis from Goldman Sachs.
Should I buy an electric car now or wait? ›
Is now a good time to buy an EV, or should I wait a year or two? From a cost perspective, yes, it is a good time to buy. Federal and state incentives are bringing certain EVs on par with the cost of gas vehicles.
Does it make sense to buy an electric car? ›
EVs can provide long-term fuel savings
Your actual expense could be higher if your EV has a big battery or your electric rate is higher than average, but it will almost certainly be cheaper than filling a gas tank — even in states where gas prices are lower.
Will electric cars get cheaper in 5 years? ›
March 7 (Reuters) - Battery electric vehicles will be, on average, cheaper to produce than a comparable internal combustion engine by 2027 thanks to new manufacturing methods that are lowering production costs, market research firm Gartner said on Thursday.
Is EV tax credit for 2024? ›
Which Electric Cars Get a Tax Credit for 2024? The Treasury Department's official list of eligible vehicles shows that the following vehicles qualify for a full $7,500 tax credit if placed in service between Jan. 1 and Dec. 31 of 2024: Acura ZDX EV (2024 models years, MSRP $80,000 or below)
What is the lifespan of an EV? ›
EV batteries typically last 10 to 20 years, but certain factors can impact that lifespan. Battery chemistry, driving habits, environmental conditions and maintenance practices all affect EV battery life.
Why is EV not the future? ›
While bigger batteries allow drivers to travel farther between charges, they also make the cars heavier, more dangerous, more expensive, and worse for the planet. The "range anxiety" that has resulted in massive batteries is another reason EVs don't work as a replacement for gas cars.
Will electric cars hold their value? ›
Broadly speaking, yes – a car's brand does have an impact on its rate of depreciation. Electric cars from desirable brands like Tesla, Mercedes and BMW usually hold their value better than some more mass-market alternatives. However, used-car buyers can use this effect to their advantage.
Is there a downside to electric cars? ›
Disadvantages of Electric Vehicles - cons
These disadvantages include finding charging stations, charging times, higher initial costs, limited driving range, and battery packs can be expensive to replace.
Firstly, and most importantly, EVs are expensive. An EV's average price in the U.S. for 2023 was around $60,000. Even as the variety of EV models available rises and prices fall, and the U.S. brings in tax credits, EVs remain much more expensive than their gasoline-powered counterparts.
Do electric cars really save money? ›
A 2020 Consumer Reports study similarly showed that EV drivers tend to spend about 60 percent less each year on fuel costs compared to drivers of gas-powered cars.
What is better, hybrid or electric? ›
Annual fuel costs for a hybrid are typically higher than annual costs for charging an electric car. However, lower gasoline prices narrow that gap. Hybrids can travel hundreds of miles without refueling, but a 300-mile range on an EV is often considered exceptional.
Are electric cars cheaper in the long run? ›
In the long run, it is cheaper to own an electric vehicle — which is why so many Americans are ditching gas-powered cars when looking to add a new vehicle to their household. Ultimately, owning an electric vehicle is more beneficial to your wallet.
Is it better to buy an electric or gas car? ›
Electric cars require fewer trips to the mechanic, which can mean less money spent on costs, such as oil changes and brake system checks. Lower cost over the life of the vehicle. Vehicle ownership can be expensive, but EVs carry a lower lifetime cost. Better for the environment.
What is the long term forecast for EV? ›
Global EV sales are forecast to grow 5x from 13.6 million units in 2023 to nearly 67 million units by 2035, representing a compound annual growth rate (CAGR) of 14.2%. Supportive policies by both governments and traditional automakers underpin the robust long-term growth outlook.
What is the future outlook for electric vehicles? ›
In 2024, electric car sales in the United States are projected to rise by 20% compared to the previous year, translating to almost half a million more sales, relative to 2023. Despite reporting of a rocky end to 2023 for electric cars in the United States, sales shares are projected to remain robust in 2024.
Are EV prices coming down? ›
"EV prices are coming down faster thanks to a more complicated set of factors. Supply and demand are at play, but so are increasing competition, tax incentives, and simple economies of scale.
Will an EV last 10 years? ›
How long do EV batteries last? Most last between 8 and 12 years, but this may be shorter if you regularly use your electric vehicle. Another common measure of lifespan is through total miles driven. EV manufacturers such as Tesla offer battery warranties under 100,000 total miles for battery failure and degradation.
