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Do you save money with electric cars?

Electric vehicles (EVS) are increasing in popularity, and most auto manufacturers have at least one EV or hybrid plug-in in their fleet. But is an electric car cheaper than gas?
Long-term ownership of an electric vehicle may be cheaper than owning a gas-powered vehicle. However, there are some important factors to consider before purchasing an EV, including charging on the road, home chargers, battery replacements, etc.
At Credit Union of Southern California (CU SoCal), we make buying an electric vehicle in California easy.
Call 866.287.6225 today to schedule a no-obligation consultation and learn about our auto loans, home equity lines of credit, personal loans, checking and savings accounts, and other banking products. As a full-service financial institution, we look forward to helping you with all of your banking needs.
Read on to learn more about how much can you save driving an electric car.

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Electric vs. gas cars: cost breakdown

Here is an overview of the costs associated with owning an electric vs. gas-powered vehicle:
Purchase price. This will largely depend on the make and model you choose; however, EVs tend to cost more initially than their gas-powered equivalent models.

Fuel. A Consumer Reports study shows that a typical EV owner who does most of their fueling at home can expect to save an average of $800 to $1,000 a year on fueling costs over an equivalent gasoline-powered car.
Charging at home vs. on the road. EV owners will need to install a home charging station or be prepared to pay by the minute at a public charging. Charging at home is most cost effective.

Batteries. A battery for a gas-powered vehicle may cost $80 - $200-plus, depending on the vehicle, and may last from three to five years. The batteries in today’s EVs are designed to last 1-20 years, pretty much the life of the vehicle, so you may never need to replace the battery.

Rebates and incentives. Both EVs and gas-powered vehicles can have special promotions, some provided by the manufacturer and/or the dealerships. Some states, including California, offer specific rebates for EVs.

Depreciation. All vehicles depreciate as time passes. This is due to wear and tear as well as demand. EVs may depreciate more as older vehicles since the battery will need to be replaced, which is very costly.

Maintenance and repairs. A Consumer Reports study shows that gas-only cars cost more in repairs in the long-term.

Long-term vs. short-term ownership. EVs are pricey to purchase, and many people are finding that leasing is more affordable, providing a short-term option that lets drivers see how they like driving an EV. All vehicles cost more in the short term, particularly if the purchase is financed by a loan. In the long term, EVs tend to cost less, but again, the ultimate savings will depend on the make and model of the vehicle, driving conditions in which it’s used, your driving style, and how well the car is maintained.

Final verdict

When it comes to average cost of electric car vs. gas car, owning an electric vehicle may be cheaper in the long run than owning a gas-powered car, especially if you plan on keeping the car for several years. How much can you save driving an electric car depends on the make, model, and features you choose, as well as how long you own the car.

Electric car FAQs

Here are answers to some of the most common questions about the average cost of an electric car vs. a gas car:

1) How far can EVs go?

According to the U.S. Department of Energy, the median EPA estimated range for all EV models offered in the 2020 model year exceeded 250 miles. The 2020 model year also marked the first year that an EV achieved an EPA estimated maximum range of more than 400 miles.

2) Are electric vehicles worth it?

Although the initial cost for buying an electric vehicle is typically higher than a gas-powered vehicle, California electric car rebates and incentives can make them more affordable. With gas prices going up, electric cars might actually be more affordable in the long run

3) How do I buy an electric car in California?

CU SoCal can provide lower interest rates and terms than traditional banks. A CU SoCal auto loan can put you in the EV driver’s seat with no loan application or funding fees, and electric vehicles get a .25% loan discount! Learn more about buying an EV in California.

4) What is the California electric car rebate?

The California Clean Vehicle Rebate Project (CVRP) is a popular California electric car rebate that makes buying an electric car or plug-in hybrid more affordable.

5) How long do EV batteries last?

The EV battery technology is improving each year, and EV batteries are being built to last 15-20 years. Because EV batteries don’t perform as well in cold weather, a car driven in cold or extreme conditions may become depleted sooner.

6) What's the difference between an EV, hybrid, and PHEVs?

Electric vehicles, also referred to as battery electric vehicles (BEVs), run entirely on an electric charge from a rechargeable battery, with no other fuel source needed.

Hybrid electric vehicles (HEVs). Sometimes referred to simply as “hybrids,” HEVs are powered by a gas-powered internal combustion engine and an electric motor that uses energy stored in a battery.

Plug-in hybrid electric vehicles (PHEVs). These are powered by an internal combustion engine in combination with an electric motor that uses energy stored in a battery.

7) What happens if you run out of charge?

All electric vehicles feature a warning light and/or dashboard symbol that alerts the driver to a low battery in need of charging. If you pay attention to your car’s battery charge indicator (as you would pay attention to the gas gauge) you shouldn’t worry about running out of charge. Most vehicles with GPS will provide a map of the nearest charge locations. If you do ignore the low charge warning, the car will eventually stop and you will need to get towed to a charging station.

8) Can I finance a Tesla?

Yes. A new Tesla may be $43,000 at the low end, and more than $150,000 when fully equipped. Even used models are in high demand, which means higher prices.
Credit Union of Southern California has auto loans for financing a Tesla.

9) How long does it take to charge an EV?

The time it takes to charge an EV depends on the battery size, how much charge is left in the battery since the previous charge, and the power capability of the charging station. So, the time it takes for a full charge can range from minutes to hours.

10) Are EVs better for the environment?

Due to their reduced C02 emissions, EVs may be better for the environment than an average gasoline-powered car.

Why savvy consumers choose CU SoCal

For over 60 years CU SoCal has been providing financial services, including car loans, mortgages, Home Equity Loans, HELOCs, personal loans, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
Please give us a call today at 866.287.6225 today to schedule a no-obligation loan consultation with a CU SoCal Member Services specialist.

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