Electric vehicles are no longer a far-flung thing of the future. Chances are, if you’re in the market for a new vehicle, more electric options are available since the last time you shopped for a car. Ditching the fuel pump in favor of a plug-in hybrid or all-electric vehicle could be great for your wallet — and the environment. Bankrate’s insurance editorial team is here to thoroughly review some electric car benefits to help you decide if going green is right for you.

Key electric car facts and statistics

  • Q3 2024 saw an 11% increase in EV sales compared to that same quarter the year prior. (Cox Automotive)
  • EV sales in California accounted for around 35 percent of all EV sales in the country. It also leads the way in terms of EVs on the road, with over 1.2 million registered vehicles. (U.S. Department of Energy)
  • Florida has the second-most registered EVs, followed by Texas. (U.S. Department of Energy)
  • Current outlooks predict that 1 in 5 vehicles on the road in the U.S. will be electric by 2030. (International Energy Agency)
  • Incoming President Trump’s proposed environmental regulations rollbacks could affect EV sales. S&P has lowered its EV projections from 6.5 million by 2030 to just 5 million. (S&P Global Mobility)
  • Roughly 96 percent of EV owners say they would buy or lease another one. (AAA)

How do electric cars work?

Traditionally, vehicles use an internal combustion engine that relies on gasoline for the energy to move and work correctly. An electric vehicle uses electric energy, which is stored in the battery packs within the vehicle. The battery packs provide the energy source for the electric motor. You can charge the battery packs for an electric vehicle by plugging them into a standard outlet at home or a charging station while out on the road.

Not all electric vehicles operate the exact same way. Battery electric vehicles, usually referred to as EVs or electric cars, get their energy solely from charging battery packs. Hybrid electric vehicles, or HEVs, use a combination of the battery pack (which needs the electric charge) and an internal combustible engine, which relies on gasoline. HEV models do not plug in to charge the way an electric vehicle does. If you want a hybrid model that relies on a plug-in charge, you have to purchase a plug-in hybrid vehicle, or PHEV.

Electric vs. gas vehicle costs

Electric vehicles are still slightly more expensive than gasoline-powered cars, but the gap is rapidly closing. As of November 2024, the average cost of an electric vehicle was $55,105. This is only around $6,300 more than the average cost of a gasoline vehicle, which was $48,724. That purchase price doesn’t include electric vehicle incentives, which could yield up to a $7,500 tax credit on top of state and local EV initiatives. 

Long-term benefits of owning an electric car

So, what are the benefits of buying an electric car? Saving money on gas, maintenance and insurance costs stand out as some of the major perks.

Save on gas

The average price of gas per gallon is $3.07 for regular, according to the latest data from AAA, which remains around the same price as this time last year.

Even though gas prices remain steady, the cost of gasoline can still take an uncomfortably large bite out of your budget. Electric cars use electricity as their primary source of energy. While electricity prices were up 5 percent from November 2023 to November 2024, prices have generally remained more stable over time than gasoline prices.

To get the most accurate estimate of how much electricity it would cost to charge an EV, you can use a calculator like this one provided by the Alternative Fuels Data Center to compare the savings of charging versus filling, based on where you live and the vehicles you drive.

Save on maintenance

Maintenance costs are another major benefit of buying an electric car. Due to fewer parts and no need for oil changes, electric car owners typically make fewer trips to a mechanic. With an electric vehicle, there are no more tune-ups and oil changes to schedule, and you do not have the worry of the combustion engine breaking down like you do with gasoline-powered vehicles. Over time, this can make them cheaper to own. A report from AAA found that EVs cost an average of $300 less than gas vehicles to maintain each year, for a total of $949 annually. Meanwhile, Bankrate’s Hidden Cost of Car Ownership Study found that, on average, drivers spend $6,684 per year on expenses like insurance, gas, maintenance and repairs, and vehicle taxes. 

Keep insurance rates reasonable

The price to insure your electric car varies depending on your personal factors and the vehicle itself. For instance, luxury EVs like Teslas typically have higher insurance rates than more affordable cars like the Toyota Prius. In the past, insuring EVs cost more than insuring gasoline-powered cars. However, EVs are now more common, and they have a multitude of safety equipment options that can qualify for insurance discounts.

To find affordable insurance for your EV, you may want to shop around. Request quotes from several insurers and learn about what EV discounts they offer. Many providers allow you to combine discounts to save even more. When you request quotes, don’t forget to use the same amounts and coverage type to make an even comparison between providers.

Sustainability benefits

Owning an electric vehicle significantly reduces your carbon footprint. The sustainability benefits are numerous, including:

  • Electric vehicles do not produce any tailpipe emissions.
  • Overall, air quality is better for everyone when more electric vehicles are on the road.
  • EV companies typically use eco-friendly materials in the production process.
  • Even when you count the manufacturing process, the greenhouse gas emissions associated with an electric vehicle over its lifetime are lower than the average emitted from a gasoline-powered vehicle.
  • The possibility of reusing and recycling the batteries for electric vehicles is growing due to better technology.

States that offer electric car incentives

Purchasing a new electric car can be an expensive proposition. However, there are several federal, state and local incentives in place that could potentially offset some of these costs. These electric car incentives encourage buyers to buy more climate-friendly alternatives to gas-powered vehicles. It’s important to research what incentives are available in your state and through your local utility companies, but here are a few programs currently available:

  • Tax credits: The U.S. government provides up to a $7,500 electric vehicle tax credit for electric vehicle purchases prior to 2022. The exact tax credit varies by brand and it should be noted that Tesla, Toyota, General Motors and Ford electric vehicles are being phased out of the tax credit program. To see if your vehicle qualifies for the tax credit, consult the IRS qualification criteria.
  • State incentives: Currently, 45 states and the District of Columbia provide some level of incentive for purchasing an electric vehicle. There may be local incentives with your city government as well, such as incentive programs available in San Francisco, California, and Buffalo, New York, in addition to state programs.
  • Utility incentives: Utility companies may offer their own incentives for electric vehicle owners. Check with your utility company to see if your vehicle is eligible.
  • HOV access: Some cities, such as San Jose, California, and Atlanta, Georgia, offer HOV lane access for anyone driving an electric vehicle. These lanes are typically restricted to vehicles with two or more passengers but this requirement is not in place for EV drivers.
  • Toll incentives: Some states offer toll reduction incentives for drivers of electric vehicles.

How will the second Trump administration affect EV initiatives and sales?

Many EV tax incentives are active due to the Inflation Reduction Act (IRA) passed under the Biden administration. President-elect Donald Trump has vowed to rescind unspent funds under the IRA. The National Bureau of Economic Research predicts that if the Trump administration does away with IRA tax credits and subsidies, new EV registrations could fall by 27 percent. 

Charging stations in the U.S.

The federal government has pledged to increase the number of charging stations available in the U.S. The more stations available, the more confident electric vehicle owners may feel while out on the road. You can find a current list of charging stations through the Alternative Fuels Data Center.

Top 10 states for EV charging stations

State EV charging stations 
1 California 16,619
2 New York 4,554
3 Florida 3,637
4 Texas 3,692
5 Massachusetts 3,464
6 Washington 2,394
7 Georgia 2,124
8 Colorado 2,320
9 Pennsylvania 1,900
10 Viriginia 1,756

Tips for buying an electric car

If buying an electric car is in your future, there are a few steps you can take prior to buying to make ownership a more realistic possibility.

  • Check how many charging stations are available in your area. Use the interactive map available through the Alternative Fuels Data Center to find the nearest charging station to your home, work or while traveling.
  • Explore EV incentives available. There are several resources available online, including this database maintained by the Alternative Fuels Data Center, detailing the federal and state incentives available for buying an electric vehicle (or PHEV or HEV). You can also check with your local utility company for incentives.
  • Once you have identified potential models, be sure to check out the vehicle’s operating range. It will be helpful to calculate how far a charge can take you and ensure it’s sufficient for your daily commute and other weekly commitments.
  • Modify an outlet at home to optimize charging. You can charge an electric vehicle by simply plugging it into a standard outlet, but it takes up to 24 hours with some models. You can have an electrician install a 240-volt outlet instead, which will allow a charge to complete in four hours versus 24.
  • Review maintenance requirements. One of the benefits of electric vehicles is the reduced amount of maintenance overall, but things do happen. Repair shops for EVs are still somewhat limited in many areas, so you may want to research which models require less maintenance.

Best electric cars

There are a variety of electric car models now available on the market. Here is a snapshot of the top-selling models in the U.S. based on Q3 2024 car sales.

Model Q3 2024 Sales
Tesla Model Y 86,801
Tesla Model 3 58,423
Tesla Cybertruck 16,692
Ford Mustang Mach-E 13,392
Honda Prologue 12,644
Hyandai Ioniq5 11,590
Chevrolet Equinox EV 9.772
Chevrolet Blazer EV 7,998
Rivian R1S 7,245
Ford F-150 Lightning 7,162

Frequently asked questions

  • Depending on the kind of electric vehicle you have and when you purchased it, you may earn up to $7,500 back in the form of a tax credit. Keep in mind that manufacturing eligibility requirements changed with the Inflation Reduction Act of 2022. You can check the IRS’s website for a list of qualified vehicles. If your vehicle qualifies, you will need to fill out Form 8936 in order to receive the credit.
  • Buying an electric car can benefit both you and the planet. In addition to decreasing your carbon footprint, owning an electric car may also come with lower maintenance costs and a federal tax credit. Depending on your car insurance provider, you may also enjoy a lower car insurance rate for an electric vehicle.
  • The cost of car insurance for an electric car will depend on a myriad of things. Some electric vehicles may be more expensive up front to insure due to their expensive replacement parts, but they may also qualify for insurance discounts. The best ways to find cheap car insurance for an electric car are probably to shop around and compare quotes before committing to a policy.

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