Should You Buy an Electric Vehicle in 2024?

Demand for electric vehicles continues to rise, but the high price tag of electric vehicles has kept many drivers away. Tax incentives have made them a little more accessible in recent years, but the rules keep changing. 

You're probably here because you're interested in purchasing an electric vehicle but aren't sure whether to buy in 2024 or wait a little longer. The answer's not as clear cut as you might think. Below, we'll look at the pros and cons of buying next year.

Three reasons to buy an electric car in 2024

Here are some reasons you may want to buy your electric car in 2024.

1. Tax credits are getting more flexible

This year, you can claim a tax credit of up to $7,500 for purchasing an electric vehicle. But to get that tax credit, you'd have to wait until you file your 2023 taxes. The credit will reduce your tax bill for the year, but if you owe less than the tax credit -- for example, your tax bill is $4,000 and your tax credit is $7,500 -- you'd just lose the rest. 

But things are changing in 2024. You'll have the choice between claiming the tax credit at the end of the year, as you can now, or applying it as a discount to your purchase price. This new option could enable you to afford an electric vehicle you may not have otherwise been able to, if you had to wait until tax season for your credit.

2. It could save you a lot on gas

Once you get past the upfront cost, you could save quite a bit with an electric vehicle. The U.S. Energy Information Administration (EIA) estimates that gas prices will rise to $3.61 per gallon in 2024. If your current vehicle holds 15 gallons of gas, that's about $54 every fill up. You could keep that money in your pocket if you had an electric vehicle.

Of course, electric vehicles still have costs too. You'll need to charge them regularly. But this will most likely be cheaper in the long run than paying for gasoline.

3. You have more options than ever

Manufacturers are continuing to invest in new electric vehicle models and to enhance the capabilities of existing models. This gives drivers who are interested in electric vehicles more options than they had in years past. Used electric vehicles are also coming up for sale, which opens the door to a new set of customers who may not have been able to afford a new vehicle.

Two reasons to wait on buying an electric vehicle

Here are some reasons you may not want to buy an electric vehicle in 2024.

1. Things can always get better

It's likely that auto manufacturers will continue to release new electric vehicles, and these future models will likely have longer ranges and better features. The pace of innovation is quick right now, so even waiting a year or two might give you a much better selection of options.

2. Even with the tax credit, they're not that affordable

New electric vehicles cost about $53,469 on average, according to Kelley Blue Book. Even if your vehicle qualifies for the $7,500 tax credit -- and not all of them do -- that still leaves you with roughly $46,000 you have to finance on your own. That's tough for a lot of people.

What's more, auto loan rates are pretty high right now. This can make taking out a loan for an electric vehicle even more costly. 

Auto insurance rates will likely be higher as well. Electric vehicles are typically more costly to repair due to their unique components and the fact that there are fewer technicians skilled in this type of work. 

If you don't think you can squeeze payments and insurance costs for an electric vehicle into your budget, you may prefer to wait until electric vehicle prices and loan interest rates begin to fall.

It's your call

Ultimately, the decision about whether to purchase an electric vehicle in 2024 rests with you. It doesn't hurt to test drive a few and price them out to see what fits in your budget. But don't make any decisions until the government publishes its list of which vehicles qualify for tax credits in 2024. This will be found at FuelEconomy.gov.