If you’re in the market for a new car, you might be wondering whether you should go for an electric vehicle (EV) or a gas-powered one. EVs are touted as the future of transportation, offering lower emissions, cheaper fuel costs, and less maintenance. But are they really worth it? How do they compare to gas cars in terms of purchase price, ownership costs, performance, and reliability?
- EV vs. Gas: Which Cars Are Cheaper to Own?
- Are Electric Cars Worth It? Here’s A 3-Year Cost Analysis
- Electric vehicles vs. gas-powered cars: Which one is cheaper to buy and own?
- Are these EVs Cheaper to Own Than Gas Cars Off The Lot?
- How Much Does an Electric Car Really Cost?
Purchase Price
The purchase price is the first thing to consider when comparing EVs and gas cars. EVs are generally more expensive than gas cars, mainly because of the cost of the battery. According to Kelley Blue Book, the average transaction price for an EV in June 2021 was $53,438, while the average price for a new gas-fueled vehicle was $48,808.
However, the price gap is narrowing, thanks to price cuts by some EV manufacturers, such as Tesla and Ford, and the availability of federal tax credits and state incentives for EV buyers. For example, the Tesla Model 3, the best-selling EV in the US, starts at $40,240, while the Ford F-150 Lightning, the electric version of the best-selling pickup truck, starts at $49,995. Both of these EVs qualify for the $7,500 federal tax credit, which lowers the effective price to $32,740 and $42,495, respectively.
Of course, the purchase price is not the only factor to consider. You also need to think about the ownership costs, which include fuel costs, maintenance costs, insurance costs, and depreciation. Let’s take a look at each of these in detail.
Fuel Costs
One of the main advantages of EVs is that they are cheaper to fuel than gas cars. EVs run on electricity, which is cheaper and more stable than gasoline. According to AAA, the average cost of electricity in the US in 2021 was $0.12 per kWh, while the average cost of gasoline was $3.11 per gallon. This means that the average cost per mile for an EV was $0.04, while the average cost per mile for a gas car was $0.15.
To put this in perspective, if you drive 15,000 miles per year, which is the average mileage for US drivers, you would spend $600 on electricity for an EV, while you would spend $2,250 on gasoline for a gas car. That saves $1,650 per year, or $4,950 over three years, for an EV owner.
Of course, the actual fuel costs may vary depending on the model of the car, the driving style, the local electricity and gasoline prices, and the availability of charging stations. Some EV owners may also have access to free or discounted charging at their workplace, home, or public locations, which can further lower their fuel costs. However, some EV owners may also face higher electricity rates during peak hours or have to pay extra fees for fast charging, which can increase their fuel costs.
Maintenance Costs
Another benefit of EVs is that they are cheaper to maintain than gas cars. EVs have fewer moving parts than gas cars, which means they require less frequent and less expensive service and repairs. According to AAA, the average maintenance cost for an EV in 2021 was $0.09 per mile, while the average maintenance cost for a gas car was $0.12 per mile. This means that the average maintenance cost for an EV owner who drives 15,000 miles per year is $1,350, while the average maintenance cost for a gas car owner is $1,800. That saves $450 per year, or $1,350 over three years, for an EV owner.
However, the maintenance cost of an EV may vary depending on the model of the car, the warranty coverage, and the battery life. Some EV models may have longer or shorter warranty periods than gas cars, which can affect out-of-pocket repair expenses. Some EV models may also have longer or shorter battery life than gas cars, which can affect the need and cost of battery replacement. According to Consumer Reports, the average battery life for an EV is 200,000 miles, while the average battery life for a gas car is 150,000 miles. However, the actual battery life may depend on the owner's usage, climate, and charging habits.
Insurance Costs
One of the drawbacks of EVs is that they are more expensive to insure than gas cars. EVs are more costly to repair or replace than gas cars because of the battery, specialized parts, and labor. According to NerdWallet, the average annual insurance premium for an EV in 2021 was $1,848, while the average annual insurance premium for a gas car was $1,427. This means that the average insurance cost for an EV owner who drives 15,000 miles per year was $0.12 per mile, while the average insurance cost for a gas car owner was $0.10 per mile. That’s an extra $421 per year, or $1,263 over three years, for an EV owner.
However, the insurance cost of an EV may vary depending on the model of the car, the driver profile, and the insurance company. Some EV models may have higher or lower insurance rates than gas cars, depending on their safety features, theft rates, and crash test results. Some drivers may also qualify for lower or higher insurance rates than others, depending on their age, gender, driving record, credit score, and location. Depending on their policies and programs, some insurance companies may also offer discounts or surcharges for EV owners.
Depreciation
One of the biggest costs of owning a car is depreciation, which is the loss of value over time. Many factors, such as the brand, model, condition, mileage, demand, and supply of the car, influence depreciation. According to Edmunds, the average depreciation rate for a new car in 2021 was 23.3% in the first year, 17.1% in the second year, and 13.2% in the third year. This means the average new car would lose 53.6% of its value in the first three years of ownership.
However, the depreciation rate of an EV may be different from that of a gas car, depending on the market trends and consumer preferences. According to a study by iSeeCars, the average depreciation rate for an EV in 2021 was 26.4% in the first year, 14.1% in the second year, and 10.4% in the third year. The average EV would lose 51% of its value in the first three years of ownership.
As you can see, the depreciation rate of an EV is slightly higher than that of a gas car in the first year but slightly lower in the second and third years. This may be because EVs are still relatively new and evolving, and consumers are still uncertain about their long-term performance and reliability. However, as EVs become more mainstream and popular, their depreciation rate may decrease and stabilize over time.
