Gas vs Hybrid vs EV – Full TCO Breakdown: Which Saves You More Money?

Before buying a vehicle, it is important to understand its total cost of ownership (TCO), which does not include the purchase price of the car but also the cost you have spent over the year to drive it on the road. 

In the United States market, there are types of vehicles available for sale, including ICE that runs on gas; hybrid, which also runs on gas along with battery; and electric, which runs on battery.

If you are planning to buy a vehicle with your hard-earned money, you surely understand about the TCO and then make a decision about which powertrain vehicle you should buy. Here, we have discussed it all.

What is the total cost of ownership for a vehicle?

Before jumping to breakdown for total cost of ownership for gas, hybrid, and electric vehicles, let’s understand what it actually means. The TCO includes the purchase price of the car, running cost, maintenance, insurance, and resale value. It means the TCO is the total amount you will have to spend during its ownership, not only the purchase price. 

The breakdown of TCO for gas, hybrid, and electric vehicles will help you to understand which will actually save you money. To make a conclusion regarding it, keep reading. Firstly, we are discussing the purchase cost, followed by others, and by the end you get the answer for your query.

Purchase Cost 

In the US, the ICE vehicles are available at very affordable pricing, hybrid vehicles are slightly costlier than gas vehicles, and the electric vehicles are the most costly. Compared to ICE vehicles, the hybrids cost $7,000 to $8,000 more, and EVs $10,000 to $12,000.

For reference, below we have shared three entry-level vehicles with ICE, hybrid, and electric powertrains so you can learn about the pricing differences among them.

ICE

• Nissan Versa: ~$17,390
• Kia K4: ~$22,290
• Toyota Corolla: ~$23,125

Hybrid 

• Toyota Corolla Hybrid: ~$24,975
• Hyundai Elantra Hybrid: ~$26,500
• Honda Civic Hybrid: ~$28,500

Electric 

• Chevrolet Bolt EV: ~$28,995
• Nissan LEAF: ~$29,990
• Fiat 500e: ~$32,500

By now, you surely have understood about the purchase pricing. Let’s jump to the running cost breakdown to learn which may be less costly for you to drive on the road.

Running Costs

In the United States, it costs 12.2¢ to 13.8¢ to drive an ICE vehicle, the same for a hybrid is 7.7¢ to 8.3¢ per mile, and for an electric, 4.4¢ to 5.1¢ per mile. It means, for each 1000 miles of driving, you have to spend:

• $44 to $51 if you opt for EV.
• $77 to $83 if you go without the hybrid vehicle.
• $122 to $138 if you buy an ICE vehicle. 

It is clear that the running cost for an EV is way cheaper than for an ICE and hybrid. Suppose you drive 5,000 miles a month; you may save $10,800 to $11,920 in a year if you opt for an electric vehicle.

Maintenance Cost 

The maintenance cost for an EV is very low, as it doesn’t have an engine, so there is no oil changing, very few moving parts, and features regenerative braking. The annual maintenance costs for gas, hybrid, and EVs are

• Gas Vehicle: $800 to $1,200 per year
• Hybrid Vehicle: $500 to $800 per year
• Electric Vehicle: $300 to $600 per year

The EVs need 40% less maintenance compared to hybrid and ICE vehicles; owning an EV over a decade can save $5,000 to $6,000 compared to ownership of an ICE vehicle.

Insurance 

The EV has the most costly insurance; the reason behind it is battery repairs are expensive, spare parts are costly, and technological complexity. The annual insurance costs for each type of vehicle are shared below:

• ICE Vehicle: $1,500 to $2,000 per year
• Hybrid Vehicle: $1,600 to $2,200 per year
• Electric Vehicle: $2,000 to $3,000

Resale Value 

In the present time, the best resale value among the ICE, hybrid, and electric vehicles is the hybrid, then the ICE, and then an EV. For a hybrid purchased at the price of $25,000, you may get 55-60% of the purchase cost even after using it for 5 years. 

After five years of use, an ICE vehicle gets around 40-45% of its purchase price, and an EV after the use of five years roughly gets 35-40% of the purchase price. 

TCO: Gas vs Hybrid vs EV

By now, you have understood the pros and cons of a vehicle with an ICE, hybrid, and electric powertrain. Now, let’s know the total cost of ownership of an ICE, hybrid, and electric vehicle if you use it for 5 years.

• The average purchase cost of an ICE vehicle from the above three mentioned cars is $20,935; running for 5 years with 5,000 miles of driving over a period of 5 years is $610 to $690; 5 years of maintenance cost is $4,000 to $6,000; and 5 years of insurance cost is $7,500 to $10,000. So, the TCO for ICE vehicles is $33,045 to $37,625.
• Similarly, the average purchase cost of a hybrid vehicle is $26,658; the 5-year running cost of 500 miles of driving is $385 to $415; the 5-year maintenance cost is $2,500 to $4,000; and the 5-year insurance cost is $8,000 to $11,000. So the TCO of hybrid vehicles is $37,543 to $42,073.
• The EV’s average purchase cost is $30,495; 5 years’ running cost of 500 miles of driving is $220 to $255; 5 years’ maintenance cost is $1,500 to $1,800; and 5 years’ insurance cost is $10,000 to $15,000. The TCO for EVs is $42,215 to $47,550.