Neither powertrain is always cheaper. For new vehicles, depreciation, financing and fees can outweigh an electric car’s lower energy and maintenance costs. For used vehicles, a battery-electric vehicle (BEV) can be the lower-total-cost choice after early depreciation, depending on model, mileage, electricity access and resale value. The only reliable answer comes from comparing similar cars over the same ownership period with local prices and incentives.
What the comparison should include
Total cost of ownership (TCO) is the money you spend minus what the vehicle is worth when you sell it. Comparing only gasoline with electricity, or only the sticker price, can produce the wrong result. The comparison should match vehicle size, equipment, ownership period and buyer circumstances.
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- Transaction price: Use the actual negotiated price, destination charges, dealer fees and taxes rather than a broad advertised MSRP.
- Financing: Include the down payment, interest and loan term. A higher purchase price can increase interest even when the monthly payment appears manageable.
- Depreciation: Subtract the expected resale or trade-in value from the purchase price. This is often the largest cost and can differ sharply between models and powertrains.
- Energy: Model gasoline, home charging, workplace charging and public charging separately. Public rates can be much higher than a residential tariff.
- Maintenance and repairs: Include scheduled service, tires, brakes, fluids, wear items and likely repairs.
- Insurance: Obtain quotes for the exact driver, address, coverage and vehicle. Repair costs and parts availability can make premiums differ by model.
- Taxes, registration and fees: Include purchase taxes, annual registration, inspection charges and any location-specific road or EV fees.
- Charging equipment: Add a home charger and electrical work only when the buyer actually needs them.
- Incentives: Check programs available in the buyer’s state, utility territory and purchase year.
A useful calculation is: purchase and financing costs − resale value + energy + maintenance and repairs + insurance + taxes and fees + charging installation. Run the calculation for the same years and expected miles for both vehicles. Keep one-time costs, such as acquisition taxes or charger installation, separate from recurring costs so you can see what drives the result.
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What the latest new-car comparison found
AAA’s September 2026 analysis estimates an average annual cost of $12,863 to own and operate a new vehicle. AAA changed its methodology from 2025, so the two annual totals should not be compared directly. Its study-period inputs were $4.152 per gallon for regular gasoline and 18.0 cents per kilowatt-hour for home EV charging; those are study assumptions, not a current quote for your utility or fuel station.
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| AAA 2026 measure | Reported result | How to interpret it |
|---|---|---|
| Average annual new-vehicle ownership and operation | $12,863 | Weighted estimate across the vehicles and costs included in AAA’s study. |
| Weighted average annual depreciation | $4,422 | AAA identified depreciation as the largest ownership cost in its overall analysis. |
| Gasoline medium sedan | $10,582 per year | Category result, not a quote for every medium sedan. |
| Comparable EV medium sedan | About $3,080 more per year than the gas category result | That implies roughly $13,662 annually before rounding; AAA reported EV costs 29.1% higher in this category. |
| Charging versus gasoline energy cost | Charging was 66%–70% lower across the studied categories | The saving was frequently offset by depreciation, finance costs and fees. |
The medium-sedan result illustrates why a simple “fuel is cheaper” argument fails. AAA found that EV sedans depreciated at roughly twice the rate of the gas models it compared. That difference was large enough to overwhelm the EV’s energy advantage. A different EV, a different transaction discount or a stronger resale market can change the result.
AAA director of automotive engineering Greg Brannon summarized the reason to compare complete ownership costs: “By looking at EVs, hybrids and traditional gas-powered vehicles within the same categories, consumers can better understand how total ownership costs vary by powertrain.” The category averages are useful for context, but they do not replace quotes for the specific cars you can buy.
Why EVs can still be cheaper to run
Electric drivetrains generally use less energy per mile and have fewer routine service items. The U.S. Department of Energy’s Alternative Fuels Data Center (AFDC) gives broad maintenance estimates of $0.101 per mile for gasoline vehicles, $0.090 for plug-in hybrids and $0.061 for all-electric vehicles. These are general averages, not a guarantee for a particular model, driving pattern or repair history.
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EVs do not require oil changes, spark plugs, exhaust-system service or many transmission-related repairs. They still need tires, cabin filters, wiper blades, suspension work and brake components. Regenerative braking can reduce friction-brake wear, but tire replacement and collision repairs remain significant costs. Battery warranty coverage, charging-system repairs and out-of-warranty battery work should be checked in the vehicle’s specific warranty documents rather than assumed. A used buyer should request service records and verify battery-health information when the seller or manufacturer provides it.
Energy savings grow with annual mileage, but mileage alone does not establish a break-even point. A driver who charges mostly at home on a low tariff may save substantially; a driver dependent on expensive public fast charging may save little. The purchase price, resale value and insurance quote can dominate the result even for a high-mileage driver. Conversely, a low-mileage driver who keeps a used BEV for many years may still benefit from reduced maintenance and a lower purchase price after depreciation.
What used-car evidence shows
A January 2026 study from the University of Michigan Center for Sustainable Systems analyzed about 260,000 U.S. used-vehicle listings collected from January through December 2024. It covered five vehicle classes, 17 cities and five charging strategies. Across those variables, used BEVs had the lowest TCO among the powertrains assessed, with depreciation patterns doing much of the work.
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In one seven-year ownership scenario, buying a three-year-old vehicle instead of a new midsize SUV was associated with approximately these TCO savings:
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| Powertrain | Approximate saving in the study scenario | Scope |
|---|---|---|
| Battery-electric (BEV) | $13,000 | Seven-year ownership; three-year-old versus new midsize SUV. |
| Internal-combustion (ICEV) | $3,000 | Same study scenario. |
| Hybrid or plug-in hybrid (HEV/PHEV) | $1,000 | Same study scenario. |
Those figures describe the study’s listings and assumptions, not a guaranteed discount in 2026. Used prices, battery condition, local inventory, interest rates and resale expectations can all move the result. The finding is nevertheless important: comparing a new EV with a new gas car may tell a different story from comparing a three-year-old BEV with an equivalent used gasoline vehicle.
Used shoppers should check how much battery warranty remains, whether the vehicle can use the charging network available locally, and whether insurance or registration differs from a gasoline counterpart. A low listing price is not automatically a low TCO if the car needs tires, suspension work, charging repairs or unusually expensive insurance.
How to calculate your own answer
- Choose genuinely comparable vehicles. Match body style, seating, cargo capacity, performance and equipment. Compare a specific EV trim with a specific gasoline counterpart rather than an average powertrain.
- Record the actual transaction price. Include dealer fees, destination, taxes and any discount. If one vehicle qualifies for a manufacturer or dealer promotion, apply it only to that vehicle.
- Set the ownership period and mileage. Use the years you realistically expect to keep the car and annual miles for commuting, trips and seasonal changes. Keep those assumptions identical for both vehicles.
- Enter financing terms. Use the same down payment and loan length if you are comparing affordability, or use each vehicle’s actual available rate if you are comparing your planned purchase. Show total interest, not just the monthly payment.
- Estimate end-of-period value. Use model-specific resale information and a conservative range. Depreciation is uncertain, so calculate a low, middle and high resale case.
- Price energy locally. Enter your gasoline price, residential electricity rate, workplace rate and public-charging share. Do not apply the home rate to every kilowatt-hour.
- Add maintenance, repairs and tires. Use model-specific schedules where available and treat broad averages as starting points. Include tire size and replacement intervals because heavier vehicles or high-performance tires can change costs.
- Obtain insurance quotes. Quote the exact VIN or trim, driver profile, address, deductibles and coverage limits.
- Add registration, taxes and fees. Include recurring charges and any EV-specific fee in your jurisdiction.
- Include charging hardware only when needed. Add the equipment and electrical work required for your home, not a generic charger allowance.
- Run sensitivity cases. Recalculate with higher and lower electricity and gasoline prices, different mileage, and weaker or stronger resale value. A vehicle that wins in one case may lose in another.
There is no source-backed universal mileage or ownership-duration threshold at which every EV becomes cheaper. The break-even point is model-specific because purchase price, efficiency, energy rates, depreciation and financing all vary together.
Energy cost: home, work and public charging
Home charging
DOE says a new EV includes a Level 1 cordset for a standard 120-volt household outlet. Level 1 may be sufficient for a low-mileage driver who can plug in for many hours. A 240-volt Level 2 unit is optional; DOE says Level 2 can generally recharge a fully depleted all-electric vehicle overnight. Check the vehicle’s charging capability, the home’s electrical capacity, panel location and permit requirements before budgeting installation.
A 240-volt Level 2 home charger can be convenient for drivers with higher daily mileage, but it is not required for every EV owner. Some homes need little or no electrical work, while others may require a longer circuit run, panel upgrades or permits. Confirm compatibility with the vehicle and electrical service before buying equipment. Do not treat a retail charger price as the complete installed cost.
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Workplace and public charging
Workplace charging can reduce the amount of home energy required, while public fast charging can be convenient on trips. Their prices, idle fees, memberships and availability vary widely. List the percentage of charging expected at each location and apply the appropriate rate. If you cannot charge at home or work, model a public-heavy case instead of assuming residential electricity. Include the possibility that a station is occupied, unavailable or located farther away than a gasoline station.
Gasoline use
Use the fuel economy of the exact trim and your real driving mix. Cold weather, speed, payload, towing and stop-and-go traffic can change consumption. For a fair comparison, apply the same mileage and comparable conditions to both vehicles. A gasoline estimate based on an optimistic highway figure should not be compared with an EV estimate based on winter or fast-charging conditions.
Federal credits and local incentives
The Internal Revenue Service says the federal new, previously owned and qualified commercial clean-vehicle credits are unavailable for vehicles acquired after September 30, 2025. A vehicle acquired on or before that date may still qualify when placed in service, subject to the applicable requirements. For a vehicle acquired in 2026, do not subtract those ended federal purchase credits from your calculation.
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When each choice is most likely to cost less
A new buyer focused on predictable depreciation
A comparable gasoline car may be cheaper when the EV carries a large price premium, has weak resale expectations or requires expensive financing. AAA’s medium-sedan result is an example of this pattern. A discounted EV with strong resale data could reverse it, so use transaction prices rather than category averages.
A high-mileage driver with reliable home charging
Lower energy and maintenance costs have more opportunity to accumulate when annual mileage is high and most charging occurs at home. This case still requires a resale and financing check; operating savings do not automatically repay a large upfront premium. Drivers with predictable overnight parking and a favorable residential tariff are in a stronger position than drivers who rely on public fast charging.
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A used-car buyer
Used BEVs deserve particular attention because the first owner may already have absorbed a substantial portion of depreciation. The Michigan study found the lowest TCO for used BEVs across its assessed variables, but battery health, warranty remaining, local prices and charging access should determine the individual purchase.
A driver without convenient charging
If home or workplace charging is unavailable, frequent public charging can reduce or eliminate the energy-cost advantage. Compare the time and price of public charging with the gasoline alternative, and consider whether installing Level 2 equipment is practical. A realistic public-charging schedule should include membership fees and any idle charges that apply.
Common mistakes that distort the result
- Comparing a heavily discounted gas car with an EV at full list price.
- Using a new-car depreciation assumption for a three-year-old used vehicle.
- Applying a residential electricity rate to public fast charging.
- Ignoring finance charges because they are hidden in the monthly payment.
- Assuming every EV needs a new Level 2 charger and assuming installation is free.
- Leaving insurance, tires, registration and local fees out of both totals.
- Subtracting a federal credit from a 2026 purchase even though the acquisition is after the eligibility cutoff.
- Treating broad AFDC maintenance averages or a national study as a promise for one model and driver.
- Using AAA’s 2026 total as a direct year-over-year comparison with its 2025 figure despite the methodology change.
- Comparing vehicles with different sizes, equipment or performance and attributing the entire price difference to the powertrain.
- Assuming a high odometer reading alone makes an EV a bargain without checking battery condition and remaining warranty.
Tools and evidence limits
The DOE AFDC Vehicle Cost Calculator can compare ownership cost and emissions for most makes and models using driving, purchase-price, fuel-price and electricity-use inputs. DOE warns that vehicle prices and specifications change frequently and that not all tool data have been verified by DOE or the site manager. Confirm the vehicle’s current specifications and replace default prices with local quotes.
The University of Michigan analysis uses 2024 used listings, so it does not guarantee today’s asking prices or your eventual resale value. AAA’s figures cover selected vehicles and categories rather than every model. AFDC maintenance figures are broad estimates. An IEA TCO tool last updated in 2022 can illustrate which cost dimensions matter, but it should not be used to establish current prices or policy. AAA’s Your Driving Costs calculator is another useful reference, provided you verify its inputs and methodology for your situation.
A practical decision checklist
- Have you matched vehicles by size, trim, equipment and use?
- Are purchase price, financing and expected resale value entered separately?
- Did you use local gasoline and electricity prices, including public-charging rates?
- Did you obtain insurance quotes for the exact vehicles?
- Are maintenance, repairs, tires, taxes and registration included?
- Did you verify charging access and electrical-installation requirements?
- Did you check state, local and utility incentives for your acquisition date?
- Have you run low, middle and high resale and energy-price cases?
- For a used EV, did you verify battery condition, warranty coverage and charging compatibility?
The lower-cost choice is the vehicle with the lower result under your realistic assumptions—not automatically the one with the lower fuel bill or the lower purchase price.
Frequently Asked Questions
Are electric cars cheaper to own than gas cars?
There is no universal winner. AAA’s September 2026 comparison found comparable EV medium sedans cost about 29.1% more annually than gas medium sedans, largely because of depreciation, finance costs and fees. A January 2026 University of Michigan study found used BEVs had the lowest TCO among the powertrains it assessed. Your result depends on transaction price, resale value, mileage, energy rates, charging access, insurance and ownership period.
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Do EV fuel savings make up for the higher purchase price?
Sometimes, but not automatically. AAA found charging costs 66%–70% lower than gasoline costs across its studied categories, while depreciation and other ownership costs often erased those savings. Calculate the upfront price, financing and expected resale value alongside energy and maintenance costs rather than relying on a fuel-only comparison.
Is a used electric car cheaper to own?
It can be. The University of Michigan Center for Sustainable Systems analyzed about 260,000 used listings collected in 2024 and found used BEVs had the lowest TCO among the assessed powertrains across its scenarios. In one seven-year scenario, a three-year-old BEV rather than a new midsize SUV was associated with about $13,000 in TCO savings. That result does not guarantee a particular car’s price or condition, so check battery health, warranty, insurance and charging access.
How much does EV maintenance cost compared with gasoline-car maintenance?
DOE AFDC general estimates are $0.061 per mile for all-electric vehicles, $0.090 for plug-in hybrids and $0.101 for gasoline vehicles. EVs avoid oil changes, spark plugs, exhaust service and many transmission repairs, but they still need tires, brakes, filters, suspension work, inspections and collision repairs. The figures are broad averages, not a quote for a specific model.
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No. DOE says a new EV comes with a Level 1 cordset for a standard 120-volt outlet. Level 2 at 240 volts is optional and can generally recharge a fully depleted all-electric vehicle overnight. Whether it is worthwhile depends on daily mileage, parking time, electrical capacity and installation requirements. Add equipment and electrical work to TCO only if your home setup requires them.
What incentives can I count on for a 2026 EV purchase?
Do not count on the federal new, previously owned or qualified commercial clean-vehicle credits for a vehicle acquired after September 30, 2025; the IRS says those credits are unavailable after that date. State, local and utility programs may still exist, but eligibility, funding and deadlines vary. Verify the program for your location and acquisition date before subtracting it from the price.
Is there a mileage number when an EV always becomes cheaper?
No universal break-even mileage is supported by the available figures. Higher mileage magnifies per-mile energy and maintenance differences, but depreciation, financing, insurance, local charging prices and resale value can still dominate. Run low, typical and high-mileage cases with your actual energy rates.
Which calculator should I use to compare ownership costs?
The DOE AFDC Vehicle Cost Calculator accepts driving, purchase-price, fuel-price and electricity-use inputs and can compare most makes and models. Replace default prices with current local quotes and verify specifications because DOE notes that data change frequently and are not all independently verified. AAA’s Your Driving Costs calculator can provide a secondary estimate.
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Electric cars are not automatically cheaper, and gas cars are not automatically cheaper. New-car depreciation and financing can outweigh an EV’s lower charging and maintenance costs, as AAA’s 2026 medium-sedan comparison showed. A used BEV may be more competitive after early depreciation, as the University of Michigan’s January 2026 analysis found. Compare equivalent vehicles using your actual price, mileage, local energy rates, charging access, insurance, fees and expected resale value, then test several scenarios before deciding.
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