As detailed in a very controversial article from May of 2022, my wife and I have been car shopping for quite some time. By shopping, I mean we’ve been researching a ton and casually browsing active listings. This week, we finally closed a deal that appears to be an absolute bargain and achieves the best of both worlds: gas & electric.
To recap, there are three different types of vehicles we’ll be discussing:
- Internal Combustion Engine (ICE): This is your typical gas-powered vehicle.
- Plug-In Hybrid Electric Vehicle (PHEV): Has a traditional ICE powertrain as well as an electric motor; can switch between the two or operate both in concert.
- Electric Vehicle (EV): This is a vehicle that is only powered by an electric motor(s).
Early summer shopping
When I wrote the first article back in May, we really hadn’t decided on what direction we were going. We test drove the Volkswagen ID.4, which was an AWESOME car, but exclusively an EV. We had serious questions about our ability to take it on trips that were longer than ~200 miles. For this reason, we kept shopping.
Our list really started to migrate back to PHEVs, mostly due to the convenience of having BOTH a gas and electric capability. That’s right, you weren’t stuck with one or the other, you could have them both! Depending on make and model, the electric-only range on these can run from 15 to 50 miles. Quite a happy compromise.
Our June order
In June, we stumbled upon the Ford Escape PHEV. Somehow, we had missed it earlier in our search. It was an elusive vehicle, which seemed to have been left out of Ford’s heavy marketing campaigns in favor of the Mach-E and coveted all-electric Lightning. This is unfortunate, but nonetheless, we found it!
We quickly realized that the Escape PHEV, powered by both gas and electric powertrains, could achieve up to 38 miles of electric-only range, and a combined 105 MPGe. Being that my wife drives a total of 20 miles a day, she could operate electric-only for her daily driving, yet take a long trip without much forethought. It appeared to be the best of both worlds.
After completing our research and calling our favorite Ford dealer from 70 miles down the road, we built our Ford Escape PHEV in SEL trim online, emailed it to the dealer, and within a couple of hours, the order was placed. We received an email from Ford on June 10th verifying our order. Yesterday, we picked her up. While we’ve only accomplished about 120 miles of driving, we did witness the efficiency by achieving an average of 60 MPG on the way home. Not too shabby.
Using financial math to make decision
There are several reasons to love this deal from a Wealthy Idiot standpoint, and I’ll get right to them. First, the MSRP starts at $35k. Yeah, that’s really competitive for what you get. Is there a comparable vehicle at the same price point? I don’t think there is. After building a upgraded SEL (the middle trim) we ended up at $42,800 MSRP.
My wife and I had been toying with which vehicle we were going to trade-in for months. Finally, we settled on my 2018 F-150. The truck had only 60,000 miles and was in near-mint condition, which led to a high resale value. On the other hand, my wife’s 2013 Toyota Highlander had 170,000 miles and had already lost most of it’s value. Easy choice in my opinion, especially since the Toyota can probably run in excess of 300,000 miles.
Once we decided to trade the truck, I started researching values and quickly realized it would offer a ton of financial leverage to the deal. We ended up getting about $35k for the truck, which offset sales tax by a significant amount. We also earned around $3k in Ford and dealer rebates. By the end of the deal, we came out of pocket $7,200 for a brand new SUV. It was a serious win for our family and definitely our financial planning. But wait, there’s more! We will also receive a $6,843 tax credit from the federal government come tax season. This brings our total out-of-pocket cost to $357. I don’t know about you, but I certainly feel like a Wealthy Idiot.
The fuel savings
I don’t want to leave this out as it was an important factor in our decision. Our local electricity rate is 8.92 cents per kWh. The Escape PHEV has a 14.4 kWh battery. We estimate that my wife will drive 6,000 miles per year on electric-only power. Assuming we get 34 of the 38 miles of range advertised, this would equal about $1.28 per charge, or $225 for the entire year. If these miles were on a 35 MPG ICE vehicle, the cost would be $565 per year. So we’ve achieved a $340 annual fuel savings and way less trips to the gas station.
The #1 take away we want everyone to leave this article with is the need to think independently and conduct research. You can easily Google “should I buy an electric vehicle” and you’ll get responses all over the board. But can you conduct legitimate research that aids in making a well-informed, financially competent decision that you won’t regret in six months?
If you’re trying to be environmentally friendly, you need to ask yourself if this really accomplishes that. If you’re trying to save on gas by switching to electric, you need to actually know your electric rate in your area. You’ll then need to do the math in order to see if the numbers work. This isn’t as simple as “my neighbor told me this is a good idea, so I did it.” Rather, we want to empower you to think critically and make sound financial decisions.
We want you to be conscious of the decisions your making, the financial consequences (or benefits) of those decisions, and be able to continue executing a sound financial plan after the fact. This isn’t about a car, and it never was. It’s about you.