Gas vs. Electric Vehicles: Which is Cheaper to Own?

Upfront costs

When deciding whether to purchase a gas or electric vehicle, one of the biggest factors is upfront costs. Gas cars typically have the lowest initial cost, electric vehicles have the highest, and hybrids fall in between¹. However, electric vehicles are cheaper to own on a yearly basis due to their reduced fuel, maintenance, repair, tire, licenses, taxes, and registration costs². Costs vary widely depending on vehicle type and condition.

As of September 30, 2025, the federal government no longer offers tax credits for electric vehicles. However, 13 states offer rebates and tax deductions for buying an electric car, including:

• Colorado
• Connecticut
• Delaware
• Illinois
• Maine
• Massachusetts
• Mississippi
• New Jersey
• New Mexico
• New York
• Pennsylvania
• Rhode Island
• Vermont

If you live in one of these states, you can get anywhere from $1,500 to $7,500 for new and used electric vehicles. In states like Arizona and Arkansas, the local  government may offer rebates for home charging stations instead.

Maintenance costs

When deciding on a gas versus electric car, consider the cost of maintenance over its lifetime. Gas and hybrid cars have higher maintenance costs than electric vehicles, mainly because gas engines have more moving parts than electric engines.

According to AAA, the cost of maintenance per mile starts at 9 cents per mile for gas-powered cars, 9 cents for hybrids, and 10 cents for EVs.

The biggest maintenance cost for electric vehicles and hybrids is the battery, which costs $5,000 to $20,000 to replace for EVs and $2,000 to $8,000 for hybrids. However, federal law requires manufacturers to offer at least eight years or 100,000 miles for the battery warranty.

Insurance costs

One area where electric vehicles rack up higher fees is car insurance. Because EVs have higher purchase prices than gas-powered vehicles, they are generally more expensive to repair and, thus, more expensive to insure. For example, the average annual insurance cost for a Chevy Bolt is around $2,200, while a Tesla Model 3 can run you over $3,000.

Compare the average insurance costs for some of the most popular electric, gas, and hybrid cars:

Electric

Gas

Hybrid

Depreciation

Sedans, hybrids, and compact SUVs depreciate the least. EVs and midsize SUVs and pickups fall in the middle, and large crew cab pickups depreciate the fastest.

Summary of Expected Costs for Electric, Gas, and Hybrid

Pros and Cons of Electric Vehicles

Pros of Electric Vehicles

• Long-term fuel and maintenance savings
• Tax incentives can offset upfront cost
• Better for the environment
• Quieter and smoother ride
• Convenience of charging at home

Cons of Electric Vehicles

• Highest upfront and insurance costs
• Lower range before refill compared to gas
• Charging is slower than getting gas and currently supported by less infrastructure

Pros and Cons of Gas-Powered Vehicles

Pros of Gas-Powered Vehicles

• Lowest upfront and insurance costs
• More available models than hybrid or electric
• Typically more time between refuels than EVs
• Gas stations are quicker and easier to find than charging stations

Cons of Gas-Powered Vehicles

• Higher maintenance costs
• Fluctuating gas prices can hit your budget hard
• Worst for the environment

Pros and Cons of Hybrid Vehicles

Pros of Hybrid Vehicles

• Fuel savings compared to gas cars
• Fewer carbon emissions
• Engines tends to last longer than gas cars’
• Fill up less frequently than a gas-powered vehicle without the “range anxiety” of EVs

Cons of Hybrid Vehicles

• Higher upfront and maintenance costs compared to gas
• Not as environmentally friendly as an EV
• Fewer tax incentives than for EVs

1. Evaluate your driving habits. If most of your trips are short commutes, errands, and local driving, an EV with 250 to 300 miles of range likely covers your needs. If you regularly take long road trips or drive in rural areas with limited charging access, a hybrid or gas vehicle offers more flexibility and convenience.
2. Consider your total budget, not just the sticker price. EVs typically cost more upfront but can save money over time through lower fuel and maintenance costs. Make sure the monthly payment fits comfortably within your finances. In general, aim to put 20 percent down and keep total car expenses under about 10 percent of your take-home pay.
3. Finance wisely. If buying an EV requires a very long loan term, minimal down payment, or stretching your budget thin, the long-term savings may not justify the financial strain. Compare offers from three to five lenders, and ask about “green auto loans,” which sometimes offer lower APRs for EV purchases.
4. Look into charging. Check how easy it is to charge an EV in your area. Do you have access to home charging, and what would installation cost? Are there reliable public charging stations nearby?
5. Research local incentives and fuel costs. State, city, or utility rebates can significantly lower the effective cost of an EV or hybrid. Also compare local gas prices and electricity rates, as fuel savings vary widely depending on where you live.

Buying a reasonably-priced EV will save you money in the long run, but the decision to purchase one comes down to personal factors. Owning an EV requires some habit adjustments and upfront costs.