- March 29, 2022
- Posted by General Electric Credit Union
- 3 read
Charge Your Knowledge: Buying an Electric Car
The first mass-produced electric vehicle (EV) was introduced by General Motors in 1996. Since then, these eco-friendly cars have only gained popularity among U.S. buyers. Even city governments are making the move to reduce their carbon footprint. In March 2022, the City of Cincinnati announced they will only purchase EVs moving forward.1 Whether you’re enticed by the energy savings or the sleek and futuristic interior of a trending model, it’s important to work with the right auto loan partner for financing. Use the guide below for a better understanding of what owning an EV entail and the steps you should take to finance one.
How do electric cars work?
Fully electric cars are powered by an electric motor that’s charged using a port. You can use public charging ports in parking garages or lots. Or, you can have one installed at home for ease of use. Keep in mind that home ports will likely increase your electricity bill while public ports may cost up to $30 a charge.2 Whichever option you go with, keep a log of the cost so you can properly budget moving forward.
Hybrid vehicles operate a little differently. Like EVs, they have an electric motor, but they use the friction generated by braking to recharge it. As well, they still have an internal combustion engine and therefore need fuel sources like gasoline. While you’ll still need to fill up at the pump, you can expect having to do so less often.
How do I finance an electric car?
The process for financing an electric car is no different than the steps you’d take for a regular fuel-powered vehicle. To ensure you get the best auto loan rates, shop around and address the following before you apply:
- Your credit score. Your credit score is influenced by several factors, including your history of making on-time payments. Lenders use this number to gauge your creditworthiness, so it’s important to make improvements to it if need be.
- Your Debt-to-Income Ratio (DTI). If you have high levels of debt compared to your income, lenders may be wary about taking you on as a borrower. That’s because you may not have the funds to make consistent on-time payments. Try to tackle portions of your total debt before applying for an auto loan. Even small payments will benefit you in the long run.
- Your credit report. You can view your credit report for free annually. Use freecreditreport.com and refer to General Electric Credit Union’s (GECU) complimentary eBook The Ultimate Beginner’s Guide to Credit for a brief rundown of how to read a credit report. Upon reviewing your report, you may even spot an error that’s negatively impacting your score and have an opportunity to dispute it.
According to Edmonds, the best electric cars of 2022 include the Tesla Model 3, Kia Niro EV, and Volkswagen ID.4.3 Whether you’re interested in one of these models or a different one, GECU can get you in the driver’s seat. Once you’ve found the ride of your dreams, you can apply for an auto loan online or on site at one of our partner dealerships.
As a Credit Union, we put the best interests of our members first. That’s why we don’t charge early payoff fees on loans and offer a wide range of free loan payment options. Plus, Online Banking or mobile app users enjoy free access to Money Management, a budgeting tool that helps you visualize your debt payoff strategy. It consolidates all your debts into one place – including loans and outstanding credit card balances — so you have a big-picture view of your obligations.