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How to Buy an Energy Efficient Car

Updated on August 31, 2012

Saving for Energy Efficient Cars

Buying a car is the second biggest expense Americans make, with buying a house being the largest. Saving for a car, especially a new car can be very difficult.  And to try to save money to buy an energy “green” car, may even be a bigger hardship. No matter what type of car you want, used,new, energy alternative, motorhome, or a motorcycle, you need to set up a budget for yourself so that you don’t have to borrow, or can reduce the amount you would borrow to purchase the vehicle.

Part of saving money for a car, is to also get the longest use you can out of the vehicle you own.  The cost of a owning car, is not only on the day you purchase it, but over the life of the vehicle. When looking to save for a car, and considering what the purchase price will be, you want to consider the costs of owning the vehicle too.  Costs like insurance, maintenance, and fuel expenses can end up running you a big difference over the years.   

Typically, you can use the costs of owning your car over a 5 year period to see what particular car you are looking to put enough money away for. Being savvy, and buying smart, may allow you to put away enough money from car purchase to car purchase. Fuel economy is an important issue when considering the costs of owning your vehicle. This is why nearly 33% of people recently surveyed by Capital One said their next car purchase would probably be an energy alternative vehicle.

Consider all costs when saving money for a car

When you are looking to save money for a car, and you are targeting a particular one, check how reliable the car has been rated.  If the car got a poor rating, you may very well be spending more money after the purchase to maintain and repair the car than you would if you bought a different model.  Another consideration, as you look to save money for a car is to know what kind of warranty the car manufacturer or used car dealer will give you.  Buyer beware, even extended warranties do not cover everything. It pays to do research and through the internet to see what the real ownership costs are. The cost of owning a car may be more expensive on a lower priced model than if you bought a car was initially hire priced.

When you are looking to buy a used car, take into consideration that the older a car is, the operating expenses will be higher. Approximately 61% of the cost of owning a car come from insurance costs and gas.  Know what the insurance premiums are as you look to save for that particular model. Another cost to make sure you save for is the state taxes and fees that are imposed when you buy the vehicle. Some states have no sales tax on cars like  Delaware, Oregon , Montana, Alaska, New Hampshire, and Hawaii.   But if you live in one of the other 44 states, you need to consider what the sale tax and fees will cost you to make sure you have saved enough money for the car you want to purchase. You can also check with your state for any tax incentives they may be giving for car purchases.  Hybrid and alternative fuel cars are eligible for federal tax benefits.  Some states also give tax incentives for energy efficient cars. Talk to a tax professional about your options available towards tax deductions and tax credits.

The cost of fuel for your car of course depends on the type of vehicle and how efficient it is, and how much driving you do over the course of the time you own the vehicle.  Gas prices are continually going up, which makes an energy efficient vehicle more appealing to purchase.  The additional costs of these green cars pay for themselves, the higher the price gas is.

Saving money for a car requires the discipline of following a budget, and knowing what the true costs of owning your vehicle will be.  The best way to save for a car is to get the most use out of your vehicle for the longest period of time.  The longer you keep your car, the more time you have to save for another vehicle.  

As gas prices continue to rise, there are considerations of fuel costs in the car we drive.  Some people are desiring the hybrid cars to save the environment.  Some people are looking to save on fuel costs.  For people who want to save the environment, cars that reduce the amount of fuel consumption, will certainly being doing a green thing.  Some people have to look at the costs of a purchase such as this to see if it justifies buying such a vehicle now.

Get Tax Credits for Going Green

Hybrid vehicles and alternative energy cars are more costly than the cars that use conventional gasoline powered engines. , but the 5 year overall cost of the car may more than pay you back the difference and leave you with more money to be able to make your next car purchase.

If you are looking to save the environment, a green car is the way to go, provided cost is not as much a factor in the purchase.  If buying the vehicle means it has to cost you less over the long term than you may have to look at the dollars and sense of the matter. The best way to see make a value judgement of what the car will end up costing you, is to look at the overall costs of buying and running the car over 5 years.  Then you can see what the fuel costs will save you, compared with the increased price you paid for the vehicle.

When you buy an energy efficient vehicle you also get tax credits, which is a savings in your pocket. Energy efficient vehicles come in a couple of versions.  Some run on diesel, some run as a hybrid electric, and some are plug in vehicles.  You will save more gas money on these vehicles, the more miles you drive per year.

Look at Your Needs When Picking A Car to Save For

Choosing which car you want to own is a major decision. If you are trying to save for a car, it is important to guide yourself in the right direction so that you save enough for the car you really want.  The first step in choosing which car you want to save for is to look at your needs, more than your wants.  Ask yourself these questions:
  • How much driving do I do, and does it neccessitate buying a more expensive energy alternative powered car?
  • What type of driving do I do? Some hybrids need to be running for a certain amount of time before the battery kicks in, if you do local driving to the supermarket, you may not get the advantage of saving fuel or the environment.
  • How long is your commute, and how many people do you usually need to transport?
  • What other items do you need to put in the car, and is it big enough?
  • What is the safety record for the car?
  • How well does the car do in accident tests?
  • Does the car fit in your parking area?
  • How long as the model been out, and do I have an idea about its track record?
  • How long do I think I might hold onto the car?

Energy Alternative Vehicles Save The Environment and May Save You Money

Very often people pick a car because they like the style or it is a popular vehicle to own.  These cars may be pricier, yet you may be able to get a car more within your savings budget, if you chose a different model.

It is very good to buy a green energy efficient car.  It is wonderful to be environmentally conscious and save the planet.  When you are looking to buy a car, monetary considerations play a role.  As you consider what you need to save to buy the car, also consider what it costs to own the car.

An energy alternative car may just fit the budget, when all things are considered.


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    • toknowinfo profile image

      toknowinfo 6 years ago

      Hi Mark, Glad you found this article helpful. We need to be as savvy as we can, whether we buy an alternative energy car, or one powered by gas. Thanks for your kind comments