The Cost of Electric Cars Vs Gas: Which is Right for You?
Electric Cars Are they the Answer?
With 2025 rapidly approaching, more people than ever are considering an electric cars. Experts at Insurance Direct Rates (IDR) help consumers calculate factors such as driving habits, local electricity costs, and vehicle specifications and Auto Insurance Cost. This information helps determine whether an electric vehicle (EV) meets your needs, when you’ll break even, and how much you might save. Today, more and more Auto Makers are leaning more toward Hybrids as the electric struggle to match range.
Upfront Costs for Electric Cars, Gas, and Hybrid
When deciding whether to buy a gas or electric car, upfront costs are a huge factor. Gas-powered cars typically have the lowest initial costs, while electric vehicles have the highest, with hybrid vehicles falling somewhere in between. For instance, Raymond, a high school teacher, opted for a gas-powered Honda Accord because of its affordable price tag compared to the $38,400 Tesla Model 3 he was considering.
Electric vehicles may come with federal tax credits that help balance the higher price. Many cars — such as the Tesla Model 3 or Chevrolet Bolt — qualify for a $7,000 tax credit. This would lower the Chevy Bolt’s starting price from $29,300 to around $22,300. Carla, an environmental enthusiast, used this credit to afford her dream electric vehicle, a Chevy Bolt.
If you’re considering an EV, be sure to include the cost of installing a home charging station. On average, installing a Level 2 station ranges from $650 to over $1,400, but the federal government offers a tax credit to cover part of the installation costs. Jessie, a small business owner, added $1,200 for installation into her budget when buying her new Ford F-150 Lightning.
IDR recommends spending no more than 11% of your take-home pay on car payments and no more than 18% on overall car expenses.
Fuel Costs: Gas vs. Electric Cars
One of the largest financial advantages of an electric vehicle is the savings on fuel. While gas prices can fluctuate, electricity is generally more stable and affordable. As of August 2024, the average cost of gasoline in the U.S. is $3.17 per gallon, while the average American spends $1,678 on gas annually.
On the other hand, EVs like Betty’s Ford Mustang Mach-E cost between $497 and $832 annually to power, depending on local electricity rates. That’s a significant savings over gas-powered cars, particularly during periods when gas prices spike.
Hybrid cars, like Jessie’s Toyota Prius, offer a middle ground by combining gas with electric power, leading to annual fuel costs between $1,112 and $1,685.
| Vehicle Type | Estimated Annual Fuel Cost | Estimated Lifetime Fuel Savings |
|---|---|---|
| Electric | $566 to $802 | $5,000 to $15,000 |
| Gas | $1,710 to $2,591 | N/A |
| Hybrid | $1,112 to $1,685 | $3,000 to $10,000 |
Electric cars provide long-term savings on fuel, but gas-powered vehicles may seem more affordable initially.
Maintenance Costs: What to Expect
Gas-powered cars come with more maintenance costs because they have more moving parts. According to a 2023 study by the Department of Energy, maintenance costs for gas-powered cars average about 11 cents per mile, while electric cars come in at just 6.2 cents per mile. Carla has been thrilled with her electric vehicle, which requires less upkeep than her old gas-powered vehicle.
While EVs save money on maintenance, their battery replacement can be expensive. Batteries range from $6,000 to $18,000 for electric cars. Fortunately, federal law requires an eight-year or 100,000-mile battery warranty, with some manufacturers offering extended warranties. Hybrid cars like Raymond’s Honda Insight also need battery replacements, but they are less expensive, typically ranging from $2,200 to $7,500.
Finding Estimated kWh Per Mile for Electric Vehicles
To determine how energy-efficient an electric vehicle is, you can calculate its kilowatt-hours (kWh) per mile. You can find the estimated kWh per mile for various electric vehicles at FuelEconomy.gov. This website provides data on most models, typically in the format of kWh per 100 miles. To get the kWh per mile, divide the number by 100. For instance, if a car uses 40 kWh per 100 miles, that equates to 0.4 kWh per mile. This calculation helps you estimate energy consumption and compare costs across different electric vehicle models.
| Vehicle Type | Maintenance Cost per Mile | Estimated Cost Over 100,000 Miles |
|---|---|---|
| Electric | $0.062 | $6,200 |
| Gas | $0.111 | $11,100 |
| Hybrid | $0.095 | $9,500 |
For long-term savings, electric vehicles prove more affordable to maintain.
Insurance Costs for Electric, Gas, and Hybrid Vehicles
Electric vehicles typically have higher insurance premiums due to their higher replacement and repair costs. For example, Jessie pays around $2,700 annually to insure her Tesla Model 3, which is significantly more than Raymond’s $1,799 premium for his Chevrolet Silverado.
Your insurance rates will depend on the value of your car, your coverage, and your driving record. While insurance for gas cars tends to be cheaper, electric vehicles are more expensive to insure, with hybrids falling somewhere in the middle. Use Insurance Direct Rates to compare quotes and get the best deal for your specific vehicle.
| Vehicle Type | Estimated Annual Insurance Cost |
|---|---|
| Tesla Model 3 (Electric) | $2,428 |
| Chevy Bolt (Electric) | $1,634 |
| Chevy Silverado (Gas) | $1,799 |
| Toyota Prius (Hybrid) | $2,187 |
It’s essential to consider insurance costs when weighing your options between electric, gas, and hybrid vehicles.
Summary of Costs
Electric cars have higher upfront and insurance costs but save you money on fuel and maintenance over time. Gas-powered vehicles are cheaper initially but come with higher long-term expenses for fuel and upkeep. Hybrids offer a balance, but it’s important to weigh the pros and cons based on your driving habits and budget.
| Type | Upfront Cost | Fuel Cost | Maintenance Cost | Insurance Cost |
|---|---|---|---|---|
| Electric | Highest | Lowest | Lowest | Highest |
| Gas | Lowest | Highest | Highest | Lowest |
| Hybrid | In-between | In-between | In-between | In-between |
Pros and Cons of Electric, Gas, and Hybrid Vehicles
Pros of Electric Vehicles
Long-term savings on fuel and maintenance
Tax incentives offset high upfront costs
Environmentally friendly
Quieter, smoother ride
Charging at home is convenient for Betty, who doesn’t have to visit gas stations anymore.
Cons of Electric Vehicles
Higher upfront and insurance costs
Limited range before refueling compared to gas cars
Charging takes longer and requires more infrastructure
Pros of Gas-Powered Vehicles
Lower upfront and insurance costs
More available models
Typically more time between refuels
Cons of Gas-Powered Vehicles
Worse for the environment
Higher maintenance costs
Fluctuating gas prices impact Raymond’s budget each year.
Pros of Hybrid Vehicles
More model options
Lower fuel costs compared to gas
Fewer carbon emissions
Longer-lasting engines
May qualify for tax incentives
Hybrids provide a balanced choice, with fuel savings and environmental benefits.
With more EV options available in the market, it’s essential to compare all factors—upfront costs, fuel, maintenance, and insurance. Insurance Direct Rates can help you determine the most affordable and practical option, ensuring you get the best deal on your next vehicle.