Even with the credit, 49% of EV owners said buying an EV strained their finances
The typical full-electric vehicle has an MSRP 42% higher than the typical gas vehicle, at about $53,000.1 Given the high sticker price, it’s no surprise that nearly half of EV drivers (49%) said buying an EV has strained their finances, according to Insurify’s survey. EV owners who claimed the tax credit were less likely to say buying an EV strained their finances (44%) than those who didn’t claim the credit (56%).
Certain groups feel more squeezed than others. Insurify found that nearly three in five Gen Z respondents (58%) said buying an EV strained their finances. More EV owners in the Northeast, where the cost of living is generally higher, said buying an EV hurt their finances (55%), compared to owners in the West and Midwest (both at 46%).
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Additionally, 37% of EV owners, including 44% of Gen X respondents, put off other financial goals to buy an EV.
Many EV owners viewed the clean vehicle tax credit as a motivator for their purchase, with 38% saying the credit influenced them.
The most common reasons for buying include:
Fuel savings (67%)
Preferring their model over gas-powered options (50%)
A sense of social responsibility (49%)
Getting a good deal (47%)
Taking advantage of the tax credit (38%)
Owning the vehicle as a status symbol (21%)
Eliminating the credit will change the financial calculus for many potential buyers. One in three EV owners (32%) said they wouldn’t be able to purchase one at full price today without the tax credit, including 46% of rural respondents and 45% of those with a household income of $80,000 or lower.
Insurance costs already make EVs more expensive
Insurance costs are an obstacle for the EV industry. Insurify data shows popular EVs cost 23% more to insure than similar gas models, with a year of full-coverage car insurance averaging $3,430.
One-third of drivers (32%) have had an insurance claim on their EVs. Gen Z (39%) and millennials (34%) are more than twice as likely as baby boomers (14%) to say they’ve had claims on their EVs. This exacerbates ownership costs for younger drivers, who already tend to pay more for auto insurance, according to Insurify’s analysis.
Of those who’ve filed a claim, the most common reasons are collision-related damage (70%), weather-related damage (66%), and theft or vandalism-related damage (32%), Insurify’s survey found.
Nearly two-thirds of EV drivers (64%) say the vehicles are more expensive to repair, which is consistent with a Kelley Blue Book analysis that also found EV repairs take nearly twice as long.
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Vance’s research has shown that people were more inclined to buy EVs if they learned about the tax credit from government agencies rather than dealerships. )
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