Electric Cars More Affordable Thanks to $4 Per Gallon Gas

The recent run up in gasoline prices has motorists across the country feeling the pinch. With the cost of a gallon approaching an emotional benchmark of $4.00 per gallon and pushing closer to an all-time record high, drivers are looking for ways to save money.

Gas prices have risen from an average of $2.69 per gallon in September 2010 to roughly $3.13 in mid-February at the start of Middle East uprisings in Tunisia, Egypt and Libya, and have now reached a nationwide average of nearly $4.00.

Suddenly, the wave of electric cars from a range of U.S. and foreign automakers seem like an even better deal.

Take the Nissan Leaf plug-in electric vehicle, for example. At first glance, it seemed like a pricey way to make a statement about one's commitment to the environment. With a suggested retail price of over $33,600, it was more expensive than similarly-sized gas engine cars, though significantly lower-priced than the highly touted Chevy Volt. The Volt runs on both gas and electricity, and retails for $41,000.

But the sticker price doesn't tell the whole story. As an all-electric zero-emission vehicle, the Leaf is eligible for a federal tax credit of up to $7,500. That brings the effective price down to around $26,000.

Now, factor in the fuel savings. Auto website cars.com recently conducted a fuel efficiency test in Chicago that pitted the Leaf against the Volt, a hybrid Toyota Prius and a gas-powered Ford Focus in a simulated commute of 25 miles. The Leaf was the least expensive of the four cars to operate, and saved an average of $6.32 per day in fuel costs to operate. Over the course of a year, that's an additional $1,560 in savings on weekday commuting at current gas prices.

During the five year span of a normal car loan, the $7,800 in gas savings brings the effective cost of a Leaf to a little over $18,000. In that range, it seems a lot more like a bargain than a political statement.

Gas prices are reaching $4.00 per gallon here at the start of May. The traditional summer driving season has not even begun, and high demand at that time of year normally pushes prices even higher. The political turmoil in oil-rich Middle East countries continues to drive crude oil prices higher, and that invariably translates to higher gas prices at the pump. Add in perks offered in many areas like state tax credits on electric vehicles, access to high-occupancy vehicle lanes on highways and reserved parking for plug-in vehicles, and an electric car is looking like a better and better option for me.