The $7,500 electric vehicle federal tax credit ended in October 2025, and predictably EV sales dipped in the months that followed. But even without the tax credit, EVs are sometimes still the smart choice when deciding between an electric car and one with an internal combustion engine.
Bottom Line Personal asked car expert Karl Brauer of the automotive website iSeeCars.com what car buyers need to know as they weigh the pros and cons of electric cars and gas-powered cars.
EV vs. Gas: Financial Factors
New EVs typically have higher sticker prices than comparable gas-powered vehicles, a difference that grows starker now that there is no more tax credit. But sticker price doesn’t tell the whole story…
The end of the $7,500 credit doesn’t necessarily make new EVs $7,500 more expensive
Automakers will no doubt reduce EV production in the coming years to account for reduced consumer demand…but what about the EVs already sitting on dealer lots? Auto manufacturers and dealerships will have to set the prices for those EVs low enough to lure buyers without the tax credit, even if that means taking big losses on each sale. “We are seeing manufacturers offer EV discounts post-tax credits,” says Brauer. “The discounts are usually on the lease side.”
Even when the tax credit was still available, many EV models were selling slowly, leading to large numbers of leftover 2025 and 2024 EVs languishing on dealer lots as of early 2026. And the start of a new calendar year tends to make automakers more willing to offer lease incentives and reduced prices on leftover models—they know buyers don’t want to pay new-car prices for prior-year models. There are lots of leftover 2024s, including Genesis GV60, Dodge Charger and Chevy Silverado EV…and 2025s, including the BMW i4, Porsche Macan, Volkswagen ID.4, Cadillac Escalade IQ, Genesis Electrified GV70, Genesis GV60 and Honda Prologue.
Used EVs likely will become increasingly affordable in 2026
It’s not just new cars that are expensive these days—used cars have become costly, too. Used-car prices are being inflated both by high demand—consumers who can’t afford today’s prohibitively expensive new cars are buying used instead…and low supply—curtailed production during the pandemic means fewer cars from those years are available secondhand now.
The supply of used EVs is about to increase dramatically. Reason: EV leasing surged in 2023. Since the typical auto lease lasts three years, approximately a quarter million EVs will come off lease and flood back into the market as used cars in 2026, according to J.D. Power. That big inflow of used EVs plus EVs’ relatively steep depreciation—more about depreciation below—likely means that used EVs will be significantly better deals than used gas-powered cars in the coming years, despite the recent expiration of the $4,000 used EV tax credit. EV batteries are protected by warranties that last at least eight years or 100,000 miles, so buying a three-year-old used EV isn’t especially risky.
EVs are less expensive to operate
The electric bill from driving an EV tends to be lower than the gas bill from driving a gas-powered vehicle, according to numerous studies. But this holds true only if you charge your EV at home and rarely use relatively pricey public charging stations. This EV savings also varies substantially depending on how much electricity and gasoline cost in your area. Example: If you live in New England, you might pay well-above-average electricity rates of 25 to 30 cents per kWh but more or less average gasoline prices of around $3 per gallon. What’s more, electricity prices are expected to continue to increase nationwide in 2026, according to the US Energy Information Administration (EIA), while gasoline prices are expected to remain stable or even decline slightly.
Related: EVs tend to have lower basic maintenance bills than gas-powered cars—EVs don’t require oil changes, and they have fewer moving parts that wear out and need to be replaced.
EVs tend to be more expensive to insure
The difference in premiums can be significant—EV owners pay 49% more, on average, than the owners of gas-powered cars, according to research by insurance company Insurify. These higher premiums are largely a result of the often-steep prices of EV replacement parts and repairs. “Get a quote from your insurance company before you buy an EV,” advises Brauer.
EV resale values are relatively low
The typical EV loses 58.8% of its value during the first five years of ownership, according to iSeeCars.com research, well above the overall five-year depreciation rate of 45.6% for a new car. Helpful: There’s no need to worry about resale values if you plan to keep an EV for its entire life or lease an EV rather than buy. Low resale values are good news for buyers of used EVs.
An EV charger adds to the cost of EV ownership
It typically costs $1,000 to $2,000 to have a “Level 2” charger installed at home, an added expense that buyers of gas-powered cars don’t face. Level 2 chargers use 240 volts to deliver between 3.9 and 19.2 kilowatts of power and add 10 to 60 miles of range per hour. Costs can climb significantly higher if the home is old and its electrical system must be upgraded to add the charger. State or local incentives are available in some areas to help cover EV-charger installation costs.
What Else to Consider?
Choosing between an EV and an internal-combustion-engine vehicle isn’t only about dollars and cents. The experience of owning these vehicles differs in some meaningful ways…
Driving distances matter
Many modern EVs can travel 300 to 400 miles or more on a single charge. That’s sufficient for the vast majority of drives, but an EV might not be the ideal choice if you regularly drive longer distances.
Having a garage or driveway matters
If you can’t park in or immediately next to your home, you might have to rely on public chargers to power an EV. That can significantly increase the costs—and frustrations—of EV ownership.
Having multiple vehicles in the household matters
EVs are particularly sensible when partnered with gas-powered vehicles. Example: If one spouse owns an EV and the other a gas-powered vehicle, then whenever either spouse must make a long drive, he/she can use the gas-powered vehicle and avoid EV range concerns.
Climate matters
Frigid temperatures can dramatically reduce EV range and increase charging times. Sweltering weather also reduces EV battery performance, though not to the same degree.
Hauling matters
While there are EV pickup trucks and SUVs capable of pulling heavy loads, hauling tends to dramatically reduce EV range.
Public charger availability matters
There’s almost always a gas station available when you need one, but that’s not necessarily the case with public EV chargers. Confirm there are public chargers in the places you drive regularly before buying an EV. Even if you plan to charge your EV at home, you’ll likely need a public charger at some point.
Patience matters
Drivers of gas-powered vehicles typically can pull into a gas station and fill up in around five minutes. Charging an EV takes longer. How much longer depends on the charger and how much charge the EV’s battery requires, but expect it to take at least 15 minutes to charge an EV battery from 40% to 80% using a “Level 3” commercial charger, which delivers between 50 and 350 kilowatts of power and can provide hundreds of miles of range in an hour. It could take considerably longer if the battery needs to be charged even more…there’s a wait for the charger…and/or the Level 3 charger doesn’t charge as quickly as it’s supposed to—a chronic issue.
Driving priorities and pleasures matter
If you enjoy the sensation of rapid acceleration when you drive, an EV might be for you—even affordable EVs deliver this. If you like a car with a refined, quiet ride, that’s another point in EV’s favor—they tend to be wonderfully quiet and smooth. But if you’re a vehicular traditionalist who loves the roar and vibration of an engine, then internal combustion might bring you more driving pleasure.
