4 Mistakes to Avoid When Buying an Electric Vehicle

Don't fall victim to these.

These days, a growing number of drivers are making the switch from gas-powered vehicles to electric ones. And while doing so could end up being a smart move for you, you also don't want to fall victim to these mistakes.

1. Taking on too expensive an auto loan

Car prices today are up across the board. But you might spend even more money on an electric vehicle than one that's powered by gas. And while that should result in ongoing savings -- namely, because you won't have to pay to fuel your car every week -- it might also result in much higher auto loan payments than you initially thought. 

Of course, taking on any sort of large loan is a risky prospect. But given that borrowing rates are up right now, you might easily end up over your head if you buy a higher-end electric car. 

2. Forgetting about tax credits

Buying an electric car could mean shelling out quite a bit of money upfront, even if you're financing that vehicle and paying it off over time. But you should know that there are tax credits available to electric car buyers, so it pays to do your research and see what government incentive you're eligible for. Right now, eligible electric car owners could be in line for up to $7,500 in tax credits. 

And as a reminder, a tax credit is a dollar-for-dollar reduction of your tax liability. So if you owe the IRS $7,500 but score a $7,500 tax credit, you'll wipe that tax bill out completely.

3. Not considering your driving habits

The idea of an electric vehicle might seem appealing. After all, you won't have to spend money on gas, and you won't have to work trips to the gas station into your weekly routine. 

But while electric cars don't need gas, they do need to be charged, the same way you can't expect your cell phone's battery to last indefinitely. And depending on your driving habits, that could prove problematic.

Let's say you take a lot of road trips. While there are public charging stations available to electric vehicle owners, they're not nearly as common as gas stations. And if you limit yourself to an electric car, it could impact your travel and recreational plans.

4. Forgetting about repairs

Electric cars have newer, complex components that can be costly to repair once they break. You'll need to account for higher-than-usual repair costs if you're going to purchase an electric car. 

Now remember, any time you buy a new vehicle, it generally comes with a warranty that protects you from costly repairs for a period of time. But it's a good idea to work on padding your savings while your car is still under warranty so you have cash reserves to tap if a costly repair comes down the pike.

Owning a car is an expensive prospect. You need to insure it, maintain it, and pay for it one way or another -- either via a lump sum of cash or financing. It's important to do your research before buying a new vehicle, and this especially holds true if you think you're ready to go electric.