Watching the numbers at the gas pump quickly turn in 2022 has been anxiety-inducing, for sure. The digital numbers flip from a total of $10 to $20 to $30 to $40 — and higher — in the blink of an eye. It adds up quickly when regular unleaded gas averages $4.24 a gallon nationwide, or $5.87 in California, as it stood on March 22, according to AAA.
While those gas prices dropped a bit from earlier in March, when the national average hit a record high of $4.33, they’re still 50% higher than the $2.88 average a year ago.
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Maybe now you’re thinking it’s time to ditch your gasoline-powered car in favor of an electric vehicle or a hybrid. But does that make financial sense for you? There’s a lot to consider. Learn more about the factors that go into deciding whether gas, hybrid or electric is right for you.
Cost To Buy
Buying a new car has become a challenge because of problems impacting the global supply chain. According to Consumer Reports, manufacturers built 1.7 million fewer vehicles in 2021 than they did in 2019, largely due to a global shortage of semiconductors. Because of the lack of parts, some automakers even are shutting down factories and halting production to let the supply chain catch up.
So, even if you can find a hybrid or fully electric car to buy, don’t expect much wiggle room at the negotiating table. And expect to pay much more — maybe $10,000 or more — than you would for a similar gasoline-powered vehicle.
The average purchase price for a new electric vehicle hit $60,054 in February, according to Edmunds. The average transaction price for all new vehicles — including electric models — was $45,596 in the same month.
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The price of some new hybrid or all-electric vehicles can be offset by federal tax credits available on limited models. A list of cars that can make their owners eligible for tax credits is available on the Department of Energy’s website.
A tax credit is valuable as it reduces the total amount of tax you’ll pay. If you owe $10,000 in taxes, and the car you buy is eligible for a $7,500 tax credit, your tax bill instead will be $2,500.
Ability To Charge
Whether you own a hybrid or an all-electric vehicle, you’ll need a way to charge the car — and that’s a huge consideration in deciding whether to make the switch. If you live in a single-family home with a garage, charging will …….