EV or gas car: what's more cost-effective to own in the long run?
Will a steeper sticker price be worth skipping all those trips to the gas pump?
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:
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
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.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Becca Stanek has worked as an editor and writer in the personal finance space since 2017. She previously served as a deputy editor and later a managing editor overseeing investing and savings content at LendingTree and as an editor at the financial startup SmartAsset, where she focused on retirement- and financial-adviser-related content. Before that, Becca was a staff writer at The Week, primarily contributing to Speed Reads.
-
Today's political cartoons - December 24, 2024
Cartoons Tuesday's cartoons - tidings of joy, tides of chaos, and more
By The Week US Published
-
Panama Canal politics – and what Trump's threats mean
The Explainer The contentious history, and troublesome present, of Central America's vital shipping lane
By Harriet Marsden, The Week UK Published
-
Kremlin seeks to quell Assad divorce reports
Speed Read Media reports suggest that British citizen Asma al-Assad wants to leave the deposed Syrian dictator and return to London as a British citizen
By Hollie Clemence, The Week UK Published
-
How much should you spend on holiday gifts?
The Explainer Let your personal budget be your guide
By Becca Stanek, The Week US Published
-
What exactly are tariffs and how do they work?
The explainer Refresh your understanding ahead of Donald Trump's promise to levy heavy tariffs once he's back in office
By Becca Stanek, The Week US Published
-
How to choose a high-yield savings account
The Explainer What to consider, from interest rates to fees to accessibility
By Becca Stanek, The Week US Published
-
4 tips to finally start your small business in the new year
The Explainer Make your dream a reality
By Becca Stanek, The Week US Published
-
Looking to earn extra money around the holidays? 6 ideas for seasonal side hustles.
The Explainer Pad your paycheck
By Becca Stanek, The Week US Published
-
Online shopping scams to look out for and how to avoid them
The Explainer Black Friday is a busy time of year for scammers
By Becca Stanek, The Week US Published
-
Is a travel credit card worth it? How to decide and pick the right one.
The Explainer Upsides include travel-related benefits and welcome bonuses
By Becca Stanek, The Week US Published
-
How IRAs work and what advantages they offer
The Explainer An IRA is a retirement savings account with tax benefits
By Becca Stanek, The Week US Published