An electric car could cost you less than you think

As we celebrate Earth Day with gasoline prices rising again, you might want to consider whether an electric car could work for you.

All-electric cars like the Nissan Leaf, Chevrolet Spark or Honda Fit EV cost less than many people think, says auto analyst Tara Baukus Mello of the financial web site Bankrate.com. And electrics can even save substantial money in the right circumstances, she notes.

Electric cars, with their limited range before needing recharging, are not for everyone. If you commute more than about 70 miles a day, recharging could become an issue. But studies have shown that 90 percent of Americans drive less than 50 miles per day. Additionally, if you live in an apartment building or other situation where installing a home recharger is impractical, that probably disqualifies you for an electric ride.

But if you are a budget-minded car owner with an average commute, Bankrate.com analyst Mello suggests that you consider these cost factors:

  • Buying and leasing costs have come down. The Nissan Leaf, nearly $40,000 when it was introduced, now has a list price of $29,830 with some dealers selling it for around $27,500 according to TrueCar.com. Even more attractive, the Leaf and competitors like the Fiat 500e and the Honda Fit EV are offering three-year leases at $199 per month -- an option elected by a majority of shoppers.
  • All-electric cars carry a $7,500 federal tax credit which you still get if you lease. Some states have additional incentives, including an immediate rebate of $2,500 in California. Even the glamorous, speedy $70,000 Tesla Model S gets such credits -- although its buyers presumably are less concerned about budgeting questions than most.
  • Operating costs are lower. Consumer Reports estimates that the Nissan Leaf costs 3.5 cents per mile to drive compared with 12 cents a mile for the gasoline-powered Toyota Corolla, which averages 32 MPG. Consumer Reports estimates that at national average electricity rates, you would pay about $40 a month in electricity costs for charging the car -- less than the cost of one tank of gas for most regular cars.

As electric offerings expand, you can choose several types of vehicles. "I think the biggest misconception is that electric cars are glorified golf carts," says Bankrate's Mello. "You can get a subcompact electric, but you can also get a mid-sized sedan or a small SUV."

Her own California household demonstrates this. Her husband, who commutes 72 miles a day round trip, has a 2013 Toyota RAV4 EV. Its battery has a range of 100 miles, and he recharges it overnight at home. In an ideal situation, the couple also has a paid-off rooftop solar electric generating system, so they have no ongoing cost for charging the small SUV. He also gets to use the faster high-occupancy lane even when alone -- a perk that originally included hybrids like the Toyota Prius, but no longer does.

If you find the idea of an electric car attractive, but are worried that recharging could become a problem with your driving habits -- including weekend trips -- an alternative is the plug-in hybrid. Cars like the Chevrolet Volt, Toyota Prius Plug-in and the Ford C-Max Energi run on battery power initially, but also have gasoline engines that run generators to recharge the batteries as they become depleted.

In figuring your costs, remember that electricity prices -- and gasoline prices -- vary widely by state and region. To conduct a cost comparison between a gasoline and electric or plug-in hybrid vehicle, go to the Energy Department calculator and enter your details. It will compare various models and let you know how much you personally could save.

  • Jerry Edgerton On Twitter»

    View all articles by Jerry Edgerton on CBS MoneyWatch»
    Jerry Edgerton, author of Car Shopping Made Easy, has been covering the car beat since Detroit companies dominated the U.S. market. The former car columnist for Money magazine and Washington correspondent for Business Week, Edgerton specializes in finding the best deals on wheels and offering advice on making your car last.

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