Everything you need to know before buying an electric vehicle

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If you’re reading this, chances are you’re in the market for a car and you want to do your part for the planet by buying an electric vehicle. But you've never bought an electric vehicle before, so you don't know what's involved in the process, what the costs are, and how to decide between all the options.

Don't worry! We’ll break down everything you need to know about the types of electric vehicles on the market, financing options, costs, rebates, and other considerations like insuring and maintaining an electric vehicle.

Types of electric vehicles

All electric vehicles aren't made to meet all driving needs. In fact, there are a few distinct types of electric vehicles that you might want to consider depending on how you intend to use your car so that you can get a good balance between emission reductions and functionality:

• Battery Electric Vehicles (BEV): A battery electric vehicle is purely powered by electricity and does not have an internal combustion engine to take over if your battery runs low. They are plug-in vehicles that require you to either use a home charging outlet or charging stations. Energy is stored using high capacity batteries and BEVs don't emit harmful emissions from burning fuel. They're good for short to medium commutes and day outings.

• Hybrid Electric Vehicles (HEV): A hybrid electric vehicle is powered by both electricity and an internal combustion engine that takes over if your electric power runs out or at higher speeds. There are two motors on board HEVs and a computer automatically switches between the two. In a hybrid electric vehicle, the batteries are charged through regenerative braking, a process where the car captures the reduction of speed and turns it into power. You don't have to plug in a hybrid car. HEVs are best for medium to long trips and travel between towns.

• Plug-in Hybrid Electric Vehicles (PHEV): A plug-in hybrid electric vehicle is a car that has two motors like a normal hybrid – an electric motor and an internal combustion engine, however, they also allow you to plug your car in to charge the batteries and run your vehicle primarily on your battery charge. Once your battery runs down, your car will switch automatically to the internal combustion engine. PHEVs can be used for short trips on battery power alone but the combination of battery power and a combustion engine means that they also work for longer trips.

• Extended Range Electric Vehicles (E-REV): An extended range electric vehicle offers a number of power sources on board for your car to switch between and choose from. Many E-REVs are powered by a combustion engine, a plug-in battery, and an electric motor. This allows them to use electric power for longer periods of time and reduce emissions. They are a good fit for those who need to drive their car over long distances but they are less common than other forms of electric vehicles.

• Fuel Cell Electric Vehicles (FCEV): A fuel cell electric vehicle is a type of car that uses hydrogen to create electricity and produces water as an emission. These cars are able to keep running so long as there is enough hydrogen to keep generating power for the battery. You can refill them at fuelling stations that offer hydrogen and they charge faster than an electric car. They can have a range of 300 miles on a tank of hydrogen, making them perfect for travelling long distances.

Financing

Once you know what kind of electric vehicle you want, you need to choose how you're going to pay for it. If you aren't able to purchase your car via cash, you'll have to borrow the money through a loan. While you could purchase a car with a personal loan, auto loans tend to offer cheaper interest rates since they require that you put up the car as collateral and that reduces the risk for lenders and allows them to often offer a lower rate.

Scotiabank offers an EV loan specifically to help people buy an electric vehicle. We also offer special programs for people of certain demographics looking to purchase a new car including the Grad Auto program for recent post-secondary graduates and the StartRight Auto program for those new to Canada.

Leasing vs buying

The cost of a new electric vehicle in Canada ranges between $32,000 and $160,000. Since how much you pay will depend on the type of EV you choose, the incentives available to you, and the model you select, you can find a cheaper option than the average.

However, many experts suggest leasing an EV is a better bet since you can access lower payments, still get rebates, and avoid the significant depreciation that many EVs face. However, at the end of your lease term, you won't own your car.

What's right for you will depend on your situation. Be sure to research the depreciation of the model you want to buy and the resale price to determine what makes the most sense financially.

Other costs

EVs come with a number of costs that are different than conventional cars. Here's what you need to know:

Charging costs

It usually costs pennies by the minute to charge your car at a charging station, making it relatively cheap to charge your car fully while on the go. Depending on your car, it might take 30 minutes to more than 12 hours to charge. Finding a charging station is fairly easy depending on where you live, using different websites and apps and even onboard services that will help you locate one wherever you are.

If you have an outlet in your garage to charge your car at home (meaning a single-family residence), you'll just be charged the regular cost of electricity that you would pay for using any other appliance. However, if you need to set up charging capacity either in your home or in an apartment or townhome with no outlets currently accessible, that could become expensive—anywhere from $300 to $20,000—depending on the building and if you need an electrician to help set it up.

When it comes to home chargers, there are three kinds: level 1 chargers, level 2 chargers, and level 3 chargers. Level 1 chargers connect to a standard outlet and charge 8 km per hour for a total of 12 to 20 hours to charge an EV battery. Level 2 chargers use a 240-volt outlet like what is used for ovens and dryers and charges 30 km per hour for a total charging time of six to 14 hours to fully charge. Level 3 chargers are also known as fast chargers and use a direct current connection to an electrical system. They can charge 100 km every 30 minutes and it takes one to four hours to charge an EV battery. Some chargers may be eligible for provincial rebates. but they can range in price from $400 to $50,000.

Insurance

Many people wonder if insurance is more expensive on an electric vehicle. The good news is that the fuel source of your car doesn't affect your insurance premiums. However, some electric vehicle cars are costly to repair and therefore will cost more to insure. The batteries on an electric vehicle can be expensive to replace in the event of a collision and sometimes electric vehicles need specialized mechanics to fix them because of their complex computer systems and how different electric vehicles are from conventional cars. Depending on the make or model of your car, that can add to the cost of insuring it. To determine whether the model you want is costly to insure, call ahead to get an insurance quote before purchasing an EV.

Maintenance

If you own an electric vehicle you can expect to pay less for maintenance costs. In fact, electric car owners pay half as much to maintain their vehicles as those that own conventional cars, according to Consumer Reports, which found that savings can add up to an average of $5,800 over the life of your vehicle. That works out to $1,150 to repair per year once your car is more than five years of age.

Incentives

The good news about buying or leasing an electric vehicle is that you'll get federal and sometimes even provincial incentives to do so. If you're buying or leasing an electric car, you're eligible for up to $5,000 in rebates if you buy a car with a minimum battery capacity of 15 kilowatt hours. If you're purchasing or leasing a vehicle with a battery capacity of less than 15 kilowatt hours, you're still eligible for $2,500 in incentives.

British Columbia also offers up to $3,000 in incentives towards the purchase or lease of a new EV and Quebec offers between $500 and $8,000 towards an EV purchase or lease, depending on the kind of electric vehicle you purchase.

Ready to buy an electric car?

Be sure to add up all the costs of owning an EV. Once you know what your budget is, shop around to find the right EV for you. While it might take a while to get used to your new car and its different maintenance cycles, you'll be able to drive knowing that you're reducing your emissions and carbon footprint, giving you more peace of mind!

If you’re looking for a beginner’s guide to electric cars, tune into this episode of the Scotiabank Perspectives podcast. Plug’n Drive CEO and President Cara Clairman answers Canadian driver’s top asked questions about EVs.

The cost of a new electric vehicle in Canada ranges between $32,000 and $160,000. Since how much you pay will depend on the type of EV you choose, the incentives available to you, and the model you select, you can find a cheaper option than the average. However, many experts suggest leasing an EV is a better bet since you can access lower payments, still get rebates, and avoid the significant depreciation that many EVs face. However, at the end of your lease term, you won't own your car. What's right for you will depend on your situation. Be sure to research the depreciation of the model you want to buy and the resale price to determine what makes the most sense financially.