Are Electric Cars Cheaper Than Gas? Here’s Why

Recently, there has been a lot of hype around electric cars. You can fill up their tank from the comfort of your own home while you are sleeping. They claim to have very little maintenance costs over their lifespan.  They sound like the cheapest option for transportation in today’s aggressive automotive market. 

Are electric cars cheaper than gas? Electric cars are cheaper to refuel and need very little maintenance in comparison to gas cars. Most electric car recharge or fill-ups are less than $20 to perform at home or even at some fast-charging stations.  No costly engine oil changes, timing belts, or transmission fluid services are needed. 

While the cheap recharge and decreased maintenance items are very appealing there are many things to consider when factoring in the costs of owning an electric vehicle. Here we will discuss some of the most important things to keep in mind to really find out if electric cars are cheaper than ga

Initial Purchase Price

In your search for an electric car, the biggest expense in the process will be the cost of the electric car itself. Just like gasoline vehicles, there are a number of different options to consider when buying an electric car. Do you buy new or used? 

You first need to find out which electric car fits your needs. Are you looking for a family vehicle that has space like an SUV, or do you want a sporty coupe that can speedily deliver you to your destination with a less than 3 second 0-60 time? These things will highly affect the price for which you will sign the dotted line when purchasing an electric car.

You will find that most brand new electric vehicles started around $60-70,000 when they were first offered on the public market. That was for an entry-level electric car in the mid-2010s. Today your options are much wider as well as cheaper. Most entry-level electric cars start around $45,000. While most gas vehicles are close to around $18,000 for a midsize sedan like a Hyundai Sonata or Nissan Altima. 

While big names like Tesla or Rivian may come to mind when thinking of electric cars, most manufacturers are releasing new electric cars as well. You may have heard of the Ford Lighting all-electric truck, Hyundai Kona EV, or the Volkswagen id4. These are the first mass-produced full-electric cars that will be available to you in the coming months if they haven’t already started to arrive at stealerships…I mean dealerships. 

Since electric cars are so new and COVID-19 has affected the supply chain of the entire automotive industry, these electric cars will be very pricey to obtain from a dealership. The reason being is that they can sell the car for more than the MSRP (Manufacturer Suggested Retail Price). While the sticker says it costs $45,000 the dealership will, in some cases mark up the price of the car due to lack of availability and the demand for the highly anticipated electric car. You may spend $5,000-$15,000 more simply because there is only one of that exact make and model at the dealership at that time. While gasoline cars are more readily available you most likely won’t pay over MSRP. 

This can be extremely frustrating for new electric vehicle customers. The last thing you want to do is pay more than what a car is worth especially if it is being sold over MSRP. You may be able to find a dealership that has better selling standards and won’t sell them over MSRP but they are few and far in between. The cars these dealerships sell are sold before they make it to the lot.

The staggering prices at the dealership may convince you to buy a used electric car. The used electric car market has also been affected by COVID-19. Since electric cars are a new concept available to the public and the auto industry is behind years in production now, this allows used electric cars to be worth more than they have been in the past. 

Your options will be very limited as well seeing as the only cars available were mostly Tesla electric vehicles in the past 5-10 years. The cost of a used 2014 Tesla model S with over 100,000 miles is close to $40,000. This is almost the same as a brand new Volkswagen id4. Depending on which electric car you go with will determine the cost of recharging your batteries as well. 

If you’re also interested in the cost difference between an EV and a hybrid check out our in-depth article by clicking here.

Cost Of Fuel

Electric cars still need recharging similar to gasoline vehicles needing a tank of gas once empty. When owning an electric car, you do not need to worry about the fluctuation of gas prices, like most of the world does. Gas prices can almost double with a change in presidency, a natural disaster near an oil field, or because of a gas shortage prediction going viral on social media. 

While charging your electric car at the charging stations that now cover most of the USA, you can expect to pay anywhere from $0-$20 for a full charge. Yes, I said $0 to recharge your electric car. Some manufacturers will cover your recharge costs for the first few years you own it. Some even allow upgrades to the charging that you receive so that you can recharge faster than a standard recharge. 

Gasoline vehicles on the other hand, as of October 2021, it will cost about $45-$50 to fill up in the US. The cost for grade 85 fuel is between $3.20-$4.00 per gallon depending on location. Most gasoline vehicles can range from 350-450 miles on a tank.

Electric cars have a range of 250-400 miles on a single charge. Again this will vary a lot depending on the electric car that you decide to buy. The more expensive ones will have a longer range. Some do have longer range capabilities that are available through a simple update that extends the range. The updates can cost $1,000s of dollars but if you buy a used electric car, it’s possible this may be installed on the car already. Be sure to verify with the previous owner if this has been done, but I’m sure they will tell you during the sales process. 

When buying a used car, either gas or electric, it is important to know if the mileage-based services have been completed. This can add value to a car, as it has been taken care of over its life. So what does maintenance look like on an electric car?

Cost of Maintenance

Electric cars do not require anywhere near the maintenance we are used to seeing on gasoline cars. No quarterly trip is needed to the dealership for changing of oil, fluid recommendations, or battery replacements every 3-4 years. The cost of maintenance on an electric car can be very simple if you let it. What I mean by that is most people keep a car for a few years and then sell it. This seems to be the trend with electric cars as well. 

You may need to replace brake pads, tires, and possibly coolant for your ownership of a brand new electric vehicle. This is if you decide to keep it for a few years and then replace it with another. Those maintenance items will total $1500-$2500, the most varying cost being the tires as this will be up to your personal preference. These costs would accumulate after 80,000 miles of ownership from brand new.  

Electric cars do not have hydraulic power steering, so no pump maintenance is needed. Most other fluids like transmission fluid is a lifetime fluid, meaning they are good for the entire life of the transmission. There are also no differentials that need to be serviced because they have electric motors that drive the wheels directly. 

Gasoline cars will need all of the maintenance stated above and then some. Most manufacturers have a mileage-based system that they encourage you to follow to maximize the components of your vehicle. There are hundreds of thousands of parts that are moving on a gasoline vehicle, that electric cars do not have, that will need your attention in order to last. 

Most of the fluid changes in a gasoline vehicle are due by the 60,000 mile marker. This includes fuel injection cleaning, coolant replacement, transmission oil replacement, engine filter, differential oil replacement, power steering fluid service, and all of the engine oil changes that have led you to this point. Don’t forget the tires and the brake pad replacements. The total of those services will be roughly $3000-$4000, also heavily influenced by your tire preference and whether or not you use full synthetic oil during oil changes. 

The estimated cost of maintenance over a few years would be roughly half of what it would be in a gasoline vehicle. Not to mention all the time you have saved by not wasting an hour or two at the dealership waiting for these services to be done. These maintenance items even though they are few, on an electric vehicle, may influence the resale value once you are ready to sell it. 

Resell Value And Total Cost Of Ownership

Now that you’ve seen a peek at what the maintenance costs of an electric car could be, the ultimate question is if it will be worth it to do those things when it comes time to sell it. The short answer is Yes. 

The hype surrounding electric cars right now is going to ensure that you get the most resale value. Many are excited about the new technologies associated with these cars and will pay a good price for a used electric vehicle. There are plenty still interested in gasoline cars as well but they don’t quite stand out like a used electric car. 

I’m sure you have already seen on the local used car blogs the prices that these electric cars are going for. They prove that the electric car does lose some value over the ownership of the car as they are not selling for more than the msrp used.

Let’s put the numbers into play here. It is 2015, and you get your brand new Tesla Model S for $76,000. Yes a bit of a premium for a car but it’s your baby for the next 4 years. You put about 60,000 miles on it, replaced the brake pads and threw some brand new tires on it. They cost you $2,000 through Tesla’s maintenance team. You had the first two years of charging covered by Tesla or about 30,000 miles. You had to pay for the other 30,000 miles which came to about $2,700. That brings your total cost of ownership to around $81,000 and you sell it in 2019 for $50,000. That brings in a loss of about $31,000.

In comparison, let’s say you bought a gasoline car comparable to the 2015 Tesla Model S. Let’s go with a 2015 base model BMW 5 series. You land one for $50,000. You keep it for 4 years and put 60,000 miles on it. During that time you followed each manufacturer’s recommended service, synthetic oil change interval, replacing the tires and brake pads. That would bring your total to roughly $4,500 in maintenance.

Let’s say it averaged over all 32mpg which brings us to 1,875 gallons of gas used. We will say gas averaged about $3.30 per gallon for those years bringing our total for gasoline to $6,187.50. The total for ownership of this car comes to $60,687.50. Then you post it up for sale having done all the maintenance and everything and have to take the offer of $20,000 because your base model bmw couldn’t attract enough serious buyers. Bringing the loss to $40,687.50.

This is a very rough estimate showing over a 4 year period driving an average of 15,000 miles and doing all recommended services with both an electric car and a gasoline car of comparable features. The electric car comes to be about $9,000 cheaper over that time period. Granted there are lots of things to factor in because we missed such as car insurance, taxes to register the vehicle each year, driving habits, but those vary quite a bit. 

We’ve mentioned before about how easy it was to charge these electric cars from your own home, but how easy could it be to install a charger in your home? 

Installing A Charging System At Home

Not all electric cars have the same batteries and will require different power supplies to keep them charged. There are a few electric cars that have a charger that plugs into a standard 110v outlet. There are others that require a much more powerful charger to accomplish efficient charging.

Most of our phone chargers and computers use a 110v outlet with two to three prongs that plug into a common outlet. You may have seen that behind your washer and dryer that it has a weird 5-6 prong plug for the dryer to plug into. This is because it needs 220v to be able to produce the right amount of heat for your clothes to dry fast. Some cars can quickly charge depending on the amount of power available and have around an 80% charge in just minutes! 

Electric cars are no different and need a higher powered outlet in your garage or near where you park your car to charge it properly. To start you will want to have an electrician walk you through the fuse box you have in your home. The last thing you want to do is burn your entire life’s work to the ground while trying to charge your new electric car. 

After having consulted with the electrician, and watching a few youtube videos you could be ready for your install. It consists of first making sure the location you have chosen will work with the location of your home’s fuse box. Then it will be placing the charger of choice in its mounting location. Most people mount it directly to a wall, having it in the interior or exterior of your home will be up to you. 

You will then guide your wires to the fuse box from the charger location. There are special hangers you can use to hang up the wire if it needs to reach a long distance. This is a good time to drill any needed holes in walls to make sure you have a clean appearance when running the wires. Run the wires to the locations into the fuse box where the electrician guided you to install them. Turn on the associated breaker for a quick test and plug in your electric car.

While it seems simple, depending on your technical abilities, you may want to contact a local electrician to install the correct outlet in the most convenient location to charge your car. These cars require higher voltages and it can be dangerous to install a charger if you do not feel comfortable doing it. The cost of an installation will vary according to the charger, but between $300 to $800 is a good guess depending on where your fuse box is located and where the charger will need to be. 

Related Question:

Is it cheaper to charge a Tesla at home or at a supercharger? In general, it is cheaper to charge a Tesla at home rather than at a supercharger. It costs around $12 to fully charge a Tesla at home. If you use a supercharger, it will average around $22. These prices may change based on where you live. Some Teslas that were purchased before January of 2017 are able to use superchargers for free. For more info on this topic check out our full article by clicking this link.

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