Weighing the Costs of Owning Electric Versus Gas Vehicles in California

Electric vehicles (EVs) are becoming more popular and affordable, but choosing between an EV and a gas-powered car depends on a careful comparison of total ownership costs.

• EVs offer savings on fuel and routine maintenance, but higher upfront prices and repair costs.
• Federal and state incentives can significantly reduce the cost of buying an EV.
• Budgeting for purchase price, maintenance, insurance, and fueling or charging is key to making the right decision.

Electric vehicles have been gaining popularity in the U.S. In 2024, sales were up 7.3% from 2023, with 1.3 million plug-in electric cars sold. If you’re getting ready to buy a car, you may be wondering if you should get in on the action or stick with a tried-and-true gas-powered vehicle.

Cutting out fuel costs is appealing, but are electric vehicles, or EVs, cheaper to operate and maintain overall? Adding up the dollars and cents is not as cut and dry as it sounds. In this article from The Police Credit Union, we’ll show you how to weigh the price of owning an electric vehicle versus a gas-powered vehicle so you can make an informed decision when you buy your next set of wheels.

Create a Vehicle Budget

To compare costs, you’ll want to make a budget for each type of vehicle. Since buying a car is a big investment, you’ll probably want to include an auto loan in your budgeting, no matter which car you decide to buy. Take note that car loan interest rates and terms can vary depending on your credit history, the time of year you purchase the vehicle, and other factors. You’ll also want to account for maintenance, insurance, and other expenses for each type of car. All these items will have an impact on the final ownership costs.

Use our Savings Goal Calculator and Auto Rebate vs. Low Interest Financing Calculator to help add everything up.

Vehicle Purchase Price

Buying an EV typically comes with a heftier price tag than a traditional gas-powered car. However, the gap between gas and EV purchase prices has started to close in recent years. According to Cox Automotive, the parent company of Kelley Blue Book, the average price of an EV in July 2025 was $56,910 while the average gas-powered vehicle came in at only a few thousand dollars less, around $48,907.

Tax Credits and Incentives on Electric Vehicles

In an effort to promote the purchase of EVs, the federal government offers a tax credit of up to $7,500 for new EVs and is also paying out a $4,000 credit for used EVs through September 2025.

Many states also offer electric car incentives like rebates for purchasing or leasing an electric vehicle or for purchasing a charging station. California currently offers numerous incentives, rebates, and rewards.

• Clean Vehicle Rebate Project
• Clean Cars for All
• California Air Resources Board

Maintenance and Insurance Costs

Since routine engine maintenance and oil changes aren’t needed on an EV, they’re cheaper to own in that respect. However, other repairs can be a different story.

Certain EV parts are much more expensive than parts for a gas-powered vehicle, so when repairs are required, they often cost more. For example, replacing the battery on a gas vehicle is typically around $100-200, while EV batteries start around $4,000 and, depending on the make and model of your car, can reach a staggering $20,000. Another thing to consider is locating an EV repair shop in your area with specially trained technicians. These mechanics can be harder to find depending on where you live, and may charge higher fees. So, how reliable the EV you buy proves to be can become a major factor in your ownership costs.

The higher costs to repair and replace an EV are the major contributor to higher insurance rates as well.

You may want to consult AAA’s Your Driving Cost fact sheet to get a better idea of how much you might pay in maintenance per mile to drive different types of vehicles.

The Cost of Fueling Up vs Plugging In

Charging an EV could be more attractive than fueling up a vehicle if you’re looking for more stability in your car expenses. Driving a gas-powered vehicle puts you at the mercy of historically unpredictable fuel prices that rise and fall depending on the economic climate, and sometimes causing serious pain at the pump. For example, the national average per gallon went from $2.17 in 2020 to $3.30 in 2024, with lots of other ups and downs over the last 20 years. So, while high fuel costs may not be stressing your budget at the moment, they could change anytime.

On the other side of the coin, when making an investment in an EV, you’ll likely need to pay to install a charger at your home unless you’re living in an apartment community that has this feature. A standard 120-volt outlet typically offers about 32 miles of range. If you want to be prepared for longer trips, you can get a Level 2, 240-volt outlet that can add 250 miles of range. Installation is around $2,000, but some states and local utility companies offer incentives to reduce the cost.

Car and Electric Vehicle Financing

How the numbers add up around your unique circumstances will help you see whether a gas-powered car or EV is right for you. When you’re ready to hit the road, The Police Credit Union is ready to help you get into the right auto loan at competitive rates. Contact us today or visit one of our branches in California.