Comparing Typical Loans: Electric Vehicle Versus Hybrid

MAY 16 2014 BY ERIC LOVEDAY 16

experian ev payment

Experian Compares The Average Electric Loan Against Its Hybrid Vehicle Counterpart

Experian Automotive recently reviewed some of the financial attributes of hybrid vehicle loans and electric vehicle loans.

The analysis by Experian concludes:

“..overall, consumers purchasing a new electric vehicle had a higher credit score** (749) than those purchasing a new hybrid (741). The study also showed that the average monthly payment for a new electric vehicle was $549, which was $82 more than a new hybrid ($467).”

Additional findings, per Experian, include:

• In 2013, nearly 44 percent of all consumers purchasing an electric vehicle had the presence of a child in the household***; nearly 52 percent of hybrid buyers did not
• The average credit score to lease an electric vehicle was 747 in 2013
• The average credit score to lease a hybrid vehicle was 729 in 2013
• The average length of a lease for an electric vehicle was 29 months, while the average length for a hybrid was 35 months
• In 2013, the average monthly lease payment for an electric was $263, while the average monthly lease payment for a hybrid was $386

Now for an explanation of those asterisks:

*For this analysis, hybrid vehicles were defined as any vehicle with multiple power alternatives.
**VantageScore® 3.0
***The presence of a child between the ages of 0 and 18 years old living in the household

Source: Experian

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16 Comments on "Comparing Typical Loans: Electric Vehicle Versus Hybrid"

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TomArt

Well, EVs are generally more expensive than hybrids right now, so obviously, the cheaper the loan (lower interest rate for higher credit score), the more likely you are to be able to afford a more expensive car.

And, if you’re in the market for efficiency, then the people with the higher credit score are going to be able to afford an EV better than someone with a lower credit score will have a higher cost due to higher interest rates available to them.

Big Solar

just pay cash

Gene

Not sure it’s worth getting into a detailed argument of the pros and cons of financing here, but…..While cash is a good choice if simplicity is what you need, if you’re good about making loan payments and have a high credit score, financing can be notably beneficial since the loaned money can be productive/invested elsewhere. I expect that financing my EV will save me ~10-20% of the cost of the car in the end.

TomArt

Who the hell has anywhere from $15k to $40k or more in liquid assets just sitting around?!?

Unplugged

Someone who should be investing it, rather than losing only 3% or less on interest payments.

Dr. Kenneth Noisewater

Assuming, of course, you don’t think that what’s currently called the “market” is in fact just an inflated scam on top of Fed funny money that could crash hard at any time given adequate external shocks.

I’m more concerned with the return OF my capital than the return ON my capital.

However, as long as the funny money flows and stays super cheap (auto loans below 3%), may as well borrow in order to have cash on hand for emergencies.

James B.

Not if you can borrow the money cheaper than you cen get a return for… Paying cash isn’t the best way if interest rates are lower. You lose the opportunity to invest that money at a higher return for years.

Kosh

The loan terms aren’t the same…..

Brian

In 2013, nearly 44 percent of all consumers purchasing an electric vehicle had the presence of a child in the household***; nearly 52 percent of hybrid buyers did not

I don’t understand what they are getting at here. It seems that you either have a child in your household or you don’t. So 44% of EV consumers have children and 56% don’t. And 48% of hybrid consumers have children and 52% don’t. The way it’s worded it almost makes you want to believe more EV consumers have kids than hybrid consumers. In reality, the difference is in the noise.

Gene

I wondered whether some fraction of respondents didn’t answer the question (third category), but that makes it all the more important to phrase the sentence in a directly comparative way, unlike how they wrote it.

90% of people don’t care where statistics come from, as long as they agree with their opinion.

Yup! I totally agree with that statistic.

Brian

Four thirds of statistics are made up on the spot.

TomArt

probably more than that…

😉

James B.

yeah, I’d heard it was 82.7% were made of on the spot, not 4/3rds, that’s silly. 😉

James B.

This statement compare different things it seems: “n 2013, nearly 44 percent of all consumers purchasing an electric vehicle had the presence of a child in the household***; nearly 52 percent of hybrid buyers did not”

So 56% didn’t have a child compare to 52 in hybrids OR 44% did compared to 48% hybrids.