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March 29th, 2011 at 10:21 am

Is Driving an Eco-Vehicle Really Cost Effective?

» by EmmaM in: Living Expenses/Spending

This is a tough question to answer because there are so many levels of “eco-friendly” cars now available, some of them extremely cost-effective, and others not so much.  Of course, it’s always good to do your bit to help keep our environment clean a free of pollution, but when it comes right down to the dollars and cents of the situation, you could end up paying more to go green.  So if you’re looking for a way to reduce your carbon footprint and your vehicle expense at the same time, here are just a few things you may want to consider before you go ahead and purchase that Tesla.

1.  Biodiesel.  This alternative fuel source, made from vegetable oils (corn, soybean) and animal fat may currently be cheaper than gas (it consistently runs about $3 per gallon), depending on where you live and drive.  But it will almost certainly be less expensive in the future, as the price of petroleum continues to rise.  On the downside, the demand is not yet high enough to make the system entirely cost-effective.  There are not a lot of vehicle manufacturers that offer biodiesel models (although many engines can be retrofit for biodiesel relatively cheaply) and you may have to travel pretty far to find a place to buy this sustainable fuel.

2.  Hybrid.  Probably the best bet for those who are on the fence about switching to an eco-friendly automobile, this may also be the most cost effective option, since many hybrid vehicles can nearly double the mpg of their gas-guzzling counterparts.  And with so many automakers fitting hybrids into their lines, you can acquire one at almost any price point.

3.  Electric.  These cars are definitely more expensive.  There’s simply no denying that you’re likely to pay more initially if you want a fully electric vehicle (especially since there are few options of the “economy” variety).  However, you will enjoy the greatest savings thereafter.  A lot of people are afraid that they’re going to pay just as much in energy costs for charging an electric vehicle as they would at the pump.  But in fact, a 2007 study by the Electric Power Research Institute revealed that the cost is roughly equivalent to $0.75 per gallon of gasoline.  Even if gas prices were to drop in the future, the savings would still be substantial.

4.  Incentives.  Depending on where you live, there may be incentives that make your eco-friendly automobile purchase worthwhile.  For example, those who opt to buy plug-in hybrids or electric vehicles in the U.S. can receive a federal credit of up to $7,500 as well as an addition $2,000 towards charger installation.  And you may also be eligible for state incentives (like the $5,000 California credit).  And coming up, zero-emission vehicles will replace hybrids as the ones that can drive in the carpool lane (with proper registration) with only one passenger.

5.  Insurance.  In truth, you will likely pay about the same for a green vehicle as you would for any comparable gasoline counterpart when it comes to insurance.  Although some of the parts will be more expensive to ensure, statistics show that eco-car drivers tend to drive (and live) more safely, balancing the scales.  However, as with just about any new car purchase, you’re going to pay a little more in the beginning.

Emma Martin writes for car insurance comparison where you can find cheap car insurance rates that will suit your needs.

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