If environmental impact were your only consideration when car buying, the choice between an electric vehicle (EV) and a gas vehicle would be easy. But for many buyers, there is also the very important factor of cost.
The cost of gas is a frequent complaint for many drivers — but then again, the price of a gas-less electric vehicle, or EV, is not so cheap either. You may wonder if, over time, that steeper sticker price will offset those trips to the gas pump. And that is not the only factor you'll want consider in determining whether an EV or a gas car makes the most sense for your wallet.
What cost factors should you consider when deciding between an EV and a gas car?
There are a number of costs involved in purchasing and owning a car , and it is important to weigh each of those when comparing the overall affordability of an EV compared to a gas vehicle. Specifically, you will want to think about:
Sticker price: "The average consumer paid about $56,000 to buy a new EV in June 2024, relative to $49,000 for a gas-powered vehicle, according to Kelley Blue Book," said CNBC . However, that may shift in the future, as "that financial gap is narrowing."
Fueling and charging costs: "In all 50 states, it's cheaper for the everyday American to fill up with electrons — and much cheaper in some regions such as the Pacific Northwest, with low electricity rates and high gas prices," said The Washington Post . Put another way, "an American driving the average 14,000 miles per year would see annual savings of roughly $700 for an electric SUV or sedan up to $1,000 for a pickup, according to Energy Innovation."
Rebates and incentives: "A major perk promoted by car manufacturers when buying new all-electric and plug-in hybrid vehicles is the federal tax credit," which can offset the purchase price, said Bankrate . It is possible to get up to $7,500, though "the actual amount will vary depending on the battery's capacity and other stipulations."
Registration and insurance: One area an EV may cost you more is car insurance and registration. "Currently, 33 states have imposed an additional EV registration fee, with eight of those states demanding an additional $200 or more per year in fees," said CapitalOne . Further, "due to higher sticker prices and repair costs, you will also likely pay more for EV car insurance."
Maintenance and repairs: "Without oil changes or other engine maintenance, the EVs are cheaper to maintain," said Car and Driver . That said, "in the case of an accident, your EV may cost more to repair due to a need for expensive parts from the original equipment manufacturer as well as increased labor," said CapitalOne.
Resale value: Depreciation is another factor to consider when buying a car, particularly if you hope to resell it later. "Within its first year, a brand-new car's value can depreciate up to 20% or even more," said Bankrate, and "for an electric car, this can be even greater, depending on how quickly technology has improved." Resale value is also informed by "the car's make and model."
What else should you consider when weighing gas vs. electric?
Another factor that can influence the cost-effectiveness of an EV is where in the U.S. you live.
"On the West Coast where gas prices are high but electricity costs tend to be lower, an EV will nearly always be more affordable to run than a car or a hybrid, Consumer Reports found," said USA Today . Meanwhile, "in New England where gas prices are lower but electricity prices trend higher, a hybrid car may be the more affordable bet fuel-wise." There is also the reality that, at this point, some areas have more chargers than others.
And of course, emissions are worth considering as well. It is estimated that "EVs emit less than a third of the emissions per mile than their gasoline counterparts — and they're getting cleaner every year," said the Post.
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