Cost of Electric vs. Gas-Powered Cars

Do electric cars save money?

Going green always feels good, and so does saving green. When it comes to switching to an electric car, is it possible to do both? You may have heard that these environmentally friendly vehicles typically have a higher price tag than their gas-powered counterparts, but the investment may be worth it. Take a look at all the costs of ownership to see if an electric vehicle could be right for you.

Fill up on fuel savings

First, look at how much money you’ll save on gas with an electric vehicle. Across the country, charging your car is cheaper than filling up the tank. On average, you’ll save $800 a year in fuel costs,1 though this can vary by city. Plus, all those fuel savings will give you the chance to start putting money in a savings account for future maintenance costs (but more on that later).

But before you go rushing off to the dealership, keep a few things in mind. Consider how far you need to drive. Electric vehicles can’t go as far as gas-powered ones. A green car will take you an average of 60–120 miles on a single charge, while a traditional car will take you about 300 miles on a single tank of gas.2

You’ll also need to carefully plan for when you charge up your car. While filling up at the gas station only takes a few minutes, a full charge can take up to 8 hours at home. And even at fast, commercial charging stations, it will take 30 minutes to charge the battery pack to 80%.2

When it comes to powering your electric car, you’ll save a lot of money, but keep in mind that you may have to sacrifice time and convenience.

Make cuts with maintenance costs

Fuel isn’t the only aspect that you should think about when it comes to electric car savings vs. gas. Maintenance is completely different with these modern vehicles. Electric vehicles have fewer moving parts than those powered by gas, which means that in the end, you’ll save on taking care of your car.

You’ll skip out on paying for things like oil changes, spark plugs and more. Plus, electric motors are able to slow themselves down, which puts less strain on your brakes. But you’ll still need to head in for things like tire rotations and replacing windshield wipers.3

The priciest maintenance component associated with an electric vehicle is replacing the battery pack, which can cost thousands of dollars and can be necessary more than once over the life of a car. But you can extend the life of your battery pack by avoiding high temperatures and overcharging.3 Plus, some manufacturers’ warranties cover the cost of a replacement.4

With all that in mind, on average, you’ll save about $1,500 on the first 150,000 miles worth of maintenance with an electric vehicle,1 and you’ll save a lot of time by not taking your car into the shop as often.

Be ready for the battery charger

One more cost to take into consideration when purchasing an electric vehicle is how to charge it. While you may have a few charging stations around town, a home charging unit will ensure your car is always powered up. One of these units will cost about $500–$700. Installation of these units is pretty simple, but be sure to think about the length of the cable and where you park your car before getting started.5

Save with Uncle Sam

So how else do electric cars save money? Before revealing the final tally of how much money you can save with an electric car, here’s an important way you can save big on the purchase of a new, environmentally friendly vehicle: tax credits. As a token of thanks for cutting down on pollution, the government offers a $2,500–$7,500 tax credit just for making the switch.6 The car needs to meet certain criteria, but most electric cars manufactured within the last few years qualify. Once you receive the tax credit, consider putting it in a savings account, so you can start saving for maintenance costs down the road, like a battery pack replacement.

How much do you save with an electric car?

An electric car will save you $632 per year on average over its gas-powered counterpart. Generally, it costs $1,117 per year to run a new gas-powered vehicle, and only $485 per year to run a new electric one.7 But keep in mind that charging your vehicle takes more time and is less convenient than pumping gas, and you’ll need be able to shell out more money for the initial purchase. After weighing these pros and cons, you’ll be able to decide if going green is the right choice for you.


This site is for educational purposes. The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the availability or suitability of any Capital One product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

Citations

  1. Reichmuth, D. (2017, November 28). How Much Does It Cost to Charge an Electric Car in Your City? Retrieved April 5, 2018, from: https://blog.ucsusa.org/dave-reichmuth/how-much-does-it-cost-to-charge-an-electric-car-in-your-city

  2. Pros and Cons of Electric Cars. (2018). Retrieved April 5, 2018, from: https://www.energysage.com/electric-vehicles/101/pros-and-cons-electric-cars/

  3. Douris, C. (2017, October 25). The Bottom Line on Electric Cars: They're Cheaper to Own. Retrieved April 5, 2018, from: https://www.forbes.com/sites/constancedouris/2017/10/24/the-bottom-line-on-electric-cars-theyre-cheaper-to-own/#7e0980ae10b6

  4. Costs and Benefits of Electric Cars vs. Conventional Vehicles. (2018). Retrieved April 5, 2018, from: https://www.energysage.com/electric-vehicles/costs-and-benefits-evs/evs-vs-fossil-fuel-vehicles/

  5. Berman, B. (2017, December 15). Buying Your First Home EV Charger. Retrieved April 5, 2018, from: http://www.plugincars.com/quick-guide-buying-your-first-home-ev-charger-126875.html

  6. Electric Vehicles: Tax Credits and Other Incentives. (n.d.). Retrieved April 5, 2018, from: https://www.energy.gov/eere/electricvehicles/electric-vehicles-tax-credits-and-other-incentives

  7. Sivak, M., & Schoettle, B. (2018, January). Relative Costs of Driving Electric and Gasoline Vehicles in the Individual U.S. State. Retrieved April 5, 2018, from: http://www.umich.edu/~umtriswt/PDF/SWT-2018-1_Abstract_English.pdf

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