Do you want to buy an electric car? Wait, but not too long
With gas prices in Los Angeles County hovering around $6 a gallon, some Angelenos are considering trading in their gas-powered cars for electric cars. If pump pain is pushing you to close the deal, here are a few things to keep in mind.
The demand is high. Supply is low. It’s a seller’s market.
At Southern California car dealerships, interest in electric vehicles has risen along with gas prices since Russia invaded Ukraine in late February.
“Last week we had by far the most phone calls and the most inquiries on our website in the past two years,” Toyota Longo general manager Doug Eroh told El Mounted.
Notice it says “surveys” not sales? That’s because you can’t sell cars you don’t have, and for months inventory has been low.
Demand for electric vehicles was at an all-time high long before Russia’s invasion of Ukraine sent gasoline prices skyrocketing. Worldwide, the number of electric car buyers more than tripled between 2019 and 2021, according to a report by the International Energy Agency.
Meanwhile, the pandemic has thrown a wrench in the supply chain.
Los Angeles County auto dealers say ongoing shortages of key components such as microchips and backlogs at ports have reduced the number of cars arriving at dealerships.
Toyota Longo in El Monte typically stocks at least a 30-day supply of cars, averaging between 1,500 and 2,000 new cars. Now every day, Eroh says he is lucky to have a one-day supply – only 30-40 cars. “Most of them are pre-sold before they get here.”
It’s an industry-wide problem. At a Nissan dealership in Downey, manager Tim Hutcherson is facing such a shortage of cars that he has asked employees to park in front of the dealership, rather than in the lot opposite, to bolster the appearance of the car. ‘offer. “You have to be creative,” he says.
Should I buy now or wait?
Joseph McCabe, CEO of AutoForecast Solutions, put it simply. “If you don’t have to buy a vehicle now, don’t buy a vehicle now. You won’t get a deal.
Fed up with high gas prices and eager to support the U.S. auto industry’s transition to electric, Los Angeles resident Lisa McRee, 60, spent hours on a recent weekend at look for an all-electric Volkswagen SUV. She says she called dealerships from South Bay to Los Angeles to Bakersfield, and none had a car for sale.
Then she received a text from a Volkswagen dealership in South Bay. Someone who ordered the SUV McRee wanted didn’t follow up on the sale. Suddenly, McRee’s dream car was available. “It won’t last a day,” the retailer wrote.
McRee didn’t see the text for an hour. By the time she replied, the car was sold. Frustrated, she decided to cancel her research.
“I can still afford to buy gas,” she says. ” I do not like it. But I can still afford it. I have now decided because the demand is so high, I will cool my jets and wait for gas prices to drop when my used SUV is worth more again. And there is more availability for EVs.
Industry analysts like McCabe hope the industry will start to recover by 2023. They encourage buyers to wait until traditional manufacturers and new players can introduce more cars to the market.
But here’s something else to add to the math: Most people need to take out a loan to buy a car, and borrowing money is getting more and more expensive. Last week, the Federal Reserve raised interest rates by a quarter of a percent, and they are expected to raise rates up to seven times more this year, and more the year next.
This means that as supply chains loosen and more cars hit the market, a car loan will likely cost hundreds of dollars more per year.
Eroh, the Toyota dealer, offers various tips. If you’ve done your research and know which car you want to buy, don’t hesitate to reserve it with a refundable deposit.
“You want to queue,” he said. It could be months before that car is yours, and during that time prices could go up. “You want to lock this car in at the price you can get it today.”
Are electric cars more economical than petrol cars?
Even in a buyer’s market, a car is a big expense. Electric cars tend to have higher upfront costs than gasoline-powered cars. But are they more expensive?
Joel Levin, executive director of Plug In America, says when considering the costs between an electric car and a gas-powered car, it’s important to consider the monthly cost of fueling and maintenance in addition to the price. sale of the vehicle.
“Generally you will see that an electric vehicle is no more expensive than a gas-powered car,” says Levin, adding that electricity prices are generally more stable than the price of gasoline, and that electric cars – with fewer moving parts than gas-powered cars – are less likely to break down.
According to Plug in America, the average cost of powering a car is about the same as paying $1.16 per gallon.
The last time a gallon of gas in California regularly cost less than $2.00 was early 2004according to data from the US Energy Information Administration.