Electric car charging outside

 

Life during the COVID-19 pandemic has certainly been odd, but one of the more unusual twists is that the car that’s been sitting in your garage or driveway for the last 16 months could have actually increased in value—and by no small amount, either.

According to CarGurus.ca, used-car prices have climbed 12.8% in the past year, and some of these hikes have been astronomical. The price of the average used SUV, for example, is up 18%, to $41,175. Van prices have soared 29%, to $31,808.

If you’re thinking of selling your current car, now seems to be the time. And if you’re considering buying an electric vehicle (EV), you could be in for some particularly large savings. By combining the proceeds from the sale of your gas-powered car to the generous government subsidies available on a new electric (or partly electric) set of wheels, you can ditch the pump and plug in to a new emissions-free ride.

We’re going to look at those incentives, as well as the savings you can expect on the operating costs of a new fully electric vehicle versus its gas-powered counterpart.

EV purchase incentives add up fast

The federal government’s EV rebate program is a good place to start. Called Incentives for Zero-Emission Vehicles (iZEV), it provides a subsidy up to $5,000 for purchases and leases of not only “pure” EVs, but also plug-in hybrids and hydrogen-fuel vehicles.

Here’s how it works: if you buy or lease a new electric, plug-in hybrid, or hydrogen-fuel-cell vehicle whose base model has six seats or fewer and costs less than $45,000 (or $55,000 for higher trim packages of the same model), you’ll qualify. Shorter-range plug-in hybrids (or those whose batteries hold less than 15 kilowatt hours of electricity) are generally eligible for smaller rebates.

If you’re buying or leasing a bigger vehicle, such as one with seven seats or more, you’ll qualify if the base model of your car is $55,000 or less (or up to $60,000 for higher trim packages on the same vehicle).

To save you the legwork, the federal government has provided a list of vehicles that qualify and the amount you can expect to save, depending on whether you buy or lease. If you’re leasing, rebates range from $625 on a one-year lease to the full $5,000 for 48 months.

Then there’s the provincial side: under its CleanBC program, the province’s Go Electric initiative offers rebates of up to $3,000 off the price of a new fully electric, hydrogen-fuel cell or plug-in hybrid (again, with shorter-range plug-in hybrids qualifying for lower rebates). A maximum retail price of $55,000 applies here.

That would bring your potential savings on a new, qualifying fully electric vehicle to $8,000, including federal subsidies. You can get a full list of the 32 vehicles to which the incentives apply, and the total combined rebate on each, on the Go Electric BC website.

That’s not all—if you choose to scrap your gas-burning car instead of selling it, you could get up to $6,000 from BC’s SCRAP-IT program. You’d qualify if your vehicle is a 2001 model year or older, or any model year if its fuel economy is at or above 7.2 litres per 100 kilometres in the city, according to the NRCan Fuel Consumption Guide. If your current car meets either standard, you can apply for SCRAP-IT and get a $6,000 rebate on a new EV, or $3,000 on a used one. Eligible new and used EVs are listed on SCRAP-IT’s qualifying EVs page.

This still isn’t the end of the incentive story… CleanBC also offers a number of rebates to help install EV charging stations at condos, apartments and homes. For a single-family home, for example, you can get a 50% rebate of the cost of installing an EV charger, capped at $350.

Most EVs come with a level 1 charger, which you can plug into a wall outlet, but these are limited, with one hour of charging resulting in about eight kilometres of range, according to EV advocacy group Plug ’N Drive. Most people opt to add a level 2 charger, which delivers about 30 kilometres per hour of charging. Level 2 chargers cost around $1,000, according to Plug ’N Drive, plus installation, which will need to be done by an electrician.

Where does this leave us? If you qualify for the maximum rebate from all these programs and live in a single-family home, you could save a total of $14,350. And that’s before accounting for EVs’ lower operating and maintenance costs.

Why you won’t miss the gas pump

Fuel savings from switching to an EV will be different for everyone, of course, so it may be helpful to look at a common commuter scenario to sharpen the picture a bit. Let’s say, for example, you commute about 35 kilometres by car, one way, which is about the distance from downtown Vancouver to Lion’s Bay, Tsawwassen, or Coquitlam (or about the same distance between Whistler and Pemberton).

That’s a 70-kilometre round trip, and with about 20 workdays a month, you’d be looking at roughly 240 days of commuting yearly, putting your total kilometres at around 17,000. Let’s add another 8,000 kilometres of personal use, for a round 25,000.

Plug In BC, which provides information on the province’s EV market, pegs the cost per 100 kilometres of EV driving at around $2 to $4 for home charging (in other words, not including paying to charge up at gas stations or other pay-as-you-go outlets). At the high end of that estimate, we’d be looking at about $1,000 per year to power our EV.

Now let’s compare that with a gas-powered Honda Civic, one of the most popular and fuel-efficient cars in Canada. According to the NRCan Fuel Consumption Guide, a 2021 Civic hatchback burns around 7.3 litres of fuel per 100 kilometres of combined city and highway driving. In May 2021, the average Vancouver gas price was 155.6 cents per litre, according to Statistics Canada. Using that cost as our baseline, we’d pay about $2,840 to drive our Civic 25,000 kilometres a year.

That puts our EV fuel savings at about $1,840 per year. If you keep your EV for, say, six years, you’d be looking at just over $11,000 in savings over a similar gas-burning model (again using our baseline May 2021 average gas price and 25,000 kilometres of yearly driving).

And here’s something else few people consider: BC’s climate action tax credit, which pays you, your spouse, or common-law partner (or your first child if you’re a single parent) up to $174 per year each to offset the carbon tax BC charges on fuel. If you’re not buying gasoline, however, you essentially get to “keep” more of this rebate.

Don’t forget maintenance savings (and no, you likely won’t have to replace the battery)

Maintenance is another part of the EV equation that is often overlooked. As EVs have few moving parts (and no need for oil changes, engine coolant, engine air filters, and transmission fluid), you could get through a whole year without spending anything to maintain your EV. That compares to about $500 to $700 in annual maintenance on a gas-powered car, according to 2018 figures from the Canadian Automobile Association.

Finally, you may wonder what you might have to pay if your EV’s battery ever needs to be replaced. The answer? Probably nothing. Today’s EV batteries are designed to provide many years of service, and they also tend to come with long warranties. The Chevrolet Bolt, for example, comes with eight years or 160,000 kilometres (whichever comes first) of warranty on its battery.

The bottom line? As EVs increase in popularity and the province’s charging network continues to expand, the price of these cars will keep falling, further fuelling their growth. That’s great news for all of us, as it results in fewer carbon-dioxide emissions and cleaner air.

BlueShore Financial can provide you with a car loan at a competitive rate

If you’re considering purchasing an EV or a standard vehicle, BlueShore can help you finance your purchase with auto loans that let you take full advantage of today’s low interest rates. To learn more, contact a BlueShore financial expert today.

BlueShore Financial, Financial Advisor, Nicole Gu

Nicole Gu

Financial Advisor

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