Are Electric Cars Worth the Money?

“I was really focused on the total cost of ownership,” explained Gooch, a consumer who wanted to replace his gas-powered sedan with an electric vehicle (EV). “I made my pitch to Trisha. The car payments would be a little more month to month. However, the cost to operate an EV is significantly less than a gas car.”

In fact, more than 1.3 million consumers chose to purchase an electric vehicle in 2024, as sales reached a record high. With the cost of EVs dropping, the possibility of tax credits, and improvements in technology, an EV may make good financial sense over time, especially when gas prices are high.

If you want to lower your carbon footprint and stretch your dollars in the long run, an EV may be ideal, with a payoff that might be both financial and environmental. While you can’t use a personal loan to purchase a car, you may be able to get a green loan to cover the cost of a home charging station or to help pay for EV maintenance down the road.

Interested in exploring whether an EV might make sense for you? Here are some things to think about.

Table of contents

•  Is it worth it to buy an electric car?
• Are tax credits available for EV purchases?
• What are the benefits of electric cars?
• Are EVs really better for the environment?
• What are the potential drawbacks of EVs? 
• Are there enough EV charging stations? 
• Can you easily charge an EV at home?
• Should you get an electric vehicle?

Is it worth it to buy an electric car?

With most Americans supporting steps to protect the environment, electric vehicles receive plenty of attention these days, and for good reason. EVs are expected to make up more than 50% of global car sales by 2035.¹

Although purchasing a new EV may set you back more than a comparable gas-powered car would, the price gap is narrowing. In fact, the average price of an EV has fallen 25% since 2018.

Also, since electric cars are less mechanically complex than gas-powered cars, EVs typically require less standard maintenance.² The potential savings can add up to hundreds of dollars a year, according to Coltura, a nonprofit organization that supports shifting away from gas-powered vehicles. As of August 2024, the organization estimated that “superusers,” which are defined as drivers in the top 10% of U.S. gas consumption, could save an average of $400 on fuel and maintenance costs each month with an EV.³

Are tax credits available for EV purchases?

To add to the savings, EV tax credits and rebates may also be available from federal and state agencies for many models of cars, depending on the type of vehicle, your income, and where you live. New EVs purchased in 2023 or after may be eligible for a federal income tax credit of up to $7,500.⁴ Used EVs might be eligible for a tax credit of up to $4,000.⁵

Additionally, new rules from the U.S. Department of the Treasury will now allow participating auto dealers to provide the tax credit directly to consumers at the point of sale, making savings more immediate.⁶ Many states also offer their own tax incentives and rebates. Be sure to double-check with your tax professional.

What are the benefits of electric cars?

The benefits of EVs range from saving money on gas and maintenance and reducing your carbon footprint to the convenience of powering up your vehicle at home. 

With more electric cars on the road these days, it may be easier to find information from various sources on the pros and cons of EVs. This might help you make your decision when shopping for a new car. You can now also choose an EV from almost every class of vehicle, whether you’re looking for a subcompact, an SUV, a luxury sedan, or even a truck.

For many, the most compelling benefit may be the amount of money that won’t be spent at the pump, especially if the vehicle is charged at home. For example, Gooch said his family was spending $300–$350 each month on gas for Trisha’s daily commute. Since buying a second EV to replace her gas-powered car, they’re now saving up to $250 per month, even as their monthly electric bill increased $75–$100 to charge the two cars. 

Such cost savings are largely based on the fact that EVs are about 4.4 times more efficient than gas-powered engines, according to government data.⁷ 

This kind of reduction in your monthly spending might go a long way toward reducing your expenses and helping you reach financial goals, so it’s definitely worth considering.

Are EVs really better for the environment?

An EV’s carbon footprint is typically smaller over its lifetime than that of a gas-powered car, even when including the electricity used for charging and battery manufacturing.⁸ 

As more people and businesses become interested in pursuing renewable energy sources like wind and solar, these alternatives will make up an increasing share of the electric power–generation grid, adding yet another layer of assurance for green-minded EV drivers looking to charge up.

The process of recycling old EV batteries is also improving, as research on how to reclaim more EV battery materials and boost the recycling rate is underway. 

For these reasons, especially for people who drive every day, choosing an EV may be an important step toward developing a lifestyle that’s more eco-friendly.

What are the potential drawbacks of EVs?

Despite the cost savings and environmentally friendly benefits, there are a few potential downsides to owning an EV.

Among the concerns is worry over the vehicle’s range. Rapid advancements in battery technology, however, mean that most EVs can be driven more than 200 miles on a fully charged battery, with all new models rated for more than 100 miles on a single charge.⁹ Researchers are working to develop even longer-range models in the years ahead.

Driving habits and weather conditions also affect the range of an EV. For example, if you need to run the heat or A/C, you’ll need to recharge sooner. Charging a vehicle’s battery can be more difficult or take longer in cold weather.

While the cost of maintenance tends to be lower for EVs, issues about battery replacement and vehicle depreciation are also real. Although replacing batteries may be costly, batteries may last 8–15 years, depending on climate, with several manufacturers offering eight-year or 100,000-mile warranties, or extended warranty programs.¹⁰ However, the issue of battery replacement may lead EVs to lose their value faster than gas-powered cars.

Are there enough EV charging stations?

One persistent concern about EVs is the availability of charging stations in the U.S. In response, the federal government has launched several initiatives to address EV-charging needs, especially in rural areas,¹¹ and in low- and moderate-income neighborhoods.¹² 

While the availability of charging stations may have been a bigger problem in the past, the number of them has been increasing, with more than 192,000 public charging ports in the U.S. as of 2024.¹³

You can use an app to locate a charging station wherever you are, and several automakers are integrating charging-location information into their vehicles’ dashboard information systems. In addition, workplace charging is available in some places. 

Can you easily charge an EV at home?

With the right equipment, charging an EV at home can be simple and efficient. Home charging options vary depending on your home and where you reside: Some multifamily homes built in the past few years have access to vehicle charging stations on-site. In some parts of the country, local code requirements for new-home construction include specifications to accommodate EV charging.

EV owners who live in older homes are typically able to charge an EV using a standard 120-volt power outlet. While it can take more than 50 hours to reach a full charge, this option might still serve your needs, depending on your driving habits.

For faster charging, you could install a Level 2 (240-volt) charging station, which will power your vehicle up faster than Level 1. But there may also be additional expenses if your home’s electric line needs to be adjusted. (Fast-charging alternatives that can take just minutes are not feasible for home use.)

Should you get an electric vehicle?

Whether you’re motivated by the prospect of saving money on your transportation costs or taking steps toward a greener lifestyle, it might be worthwhile to consider your EV options.

There may be multiple reasons to jump on board with the growing EV trend, including less maintenance and the ability to ignore price jumps at the pump. Other benefits are potential tax credits and helping to reduce your environmental impact. 

However, there might also be additional expenses that come with owning an electric car, including paying an electrician to inspect your home’s power system, installing an at-home charging station, or replacing the battery.

For his part, Gooch said he’s happy with his family’s switch to electric. “I know our family is done buying gas cars,” he said. “I haven’t been to the gas station or gotten an oil change for my car in four years. We’ve seen the tangible impact to our monthly operating costs, and we aren’t going back.” 

If you’re looking at the EV option, or for other ways to green your life and home, but are worried about the costs, don’t fret. While we don’t offer green loans, we do have information on how using a personal loan for home renovations could help you make energy-efficient and cost-saving improvements in a way that fits your budget now and in the future

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