Hidden costs of owning an electric car

There are some unexpected expenses that come with owning an electric car, like annual EV registration fees and higher insurance costs.

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Rachael Brennan

Rachael Brennan

Senior Editor & Licensed Auto Insurance Expert

Rachael Brennan is a senior editor and a licensed auto insurance expert at Policygenius. Her work has also been featured in MoneyGeek, Clearsurance, Adweek, Boston Globe, The Ladders, and AutoInsurance.com.

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Most people know that an electric vehicle comes with a higher price tag than a car with an internal combustion engine, but there are other costs associated with having an electric vehicle that drivers may need to consider before buying.

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Every car will have expenses over time, whether it is an electric vehicle or a gas-powered car, but electric vehicles come with some unique expenses that you may not be expecting when you purchase your car.

Key takeaways

  • Because electric cars don’t use gas, some states have instituted an additional registration fee for drivers with electric cars.

  • Buying a charging station for your home will cost you anywhere from $300 to $2,000, depending on which level charger you choose to purchase.

  • Heat can melt or damage the plastic and electronics in your car, while the cold can freeze parts of your car in place.

Annual EV registration fees

In most states, highway maintenance is partially funded by a tax on gasoline. A portion of the money you are spending goes to repair and maintain the roads every time you fill up your tank in a gas-powered or hybrid vehicle.

Because electric cars don’t use gas, many states have instituted an additional registration fee for EV drivers. Depending on the state, you could end up paying $250 or more each year toward this infrastructure fee.

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Charger prices and installation

While it is possible to own an electric car without installing a home charger, it takes a lot more work. Electric cars usually come with a charging cord that can be plugged into a traditional electrical outlet, but charging your car this way takes much longer than using a charging station.

Buying a charging station for your home will cost you anywhere from $300 to $2,000 [1] , depending on which level charger you choose to purchase. This doesn’t include the labor for installation or the increase in your electricity bill, so plan to spend a fair amount of money outfitting your home to charge your electric car.

Right to repair

Gas-powered cars can be repaired by almost any mechanic, auto technician, or even the car’s owner, if they have the ability. This is because parts and diagnostic tools are available to anyone, whether or not they work for the car manufacturer.

However, electric vehicle owners face a bit of a conundrum — an EV is essentially just a box of electronic equipment, similar to a smartphone, which means intellectual property rights on the part of the manufacturer can prevent the car’s owner from tampering with it or allowing a third party to repair the vehicle. This creates a situation where the manufacturer can charge whatever they want for a repair and the vehicle owner has no way to avoid that cost. 

Temperature issues

If you live in an area with extreme heat or cold, snowy weather, your electric vehicle might run into some trouble. Heat can melt or damage the plastic and electronics in your car, while the cold can freeze parts of your car in place. In fact, if you have an EV with retractable door handles, you may not even be able to get into your car on a cold day. Additionally, heat and cold can both wreak havoc on your car’s battery.

If you live in an area where high or low temperatures are common, you may need to have an indoor parking option like a garage to protect your EV from the elements.

Insurance costs

Insurance costs for electric cars are typically more expensive than their non-electric counterparts. The chart below shows the average annual premium for some common electric vehicles in comparison to popular gas-powered vehicles:

Electric vehicleAverage annual premiumGas-powered vehicleAverage annual premium
Chevrolet Bolt EV$2,015Ford F-150$1,665
Nissan Leaf$1,955Jeep Wrangler$1,771
Tesla Model 3$2,855Honda CR-V$1,673
Tesla Model Y$2,884Toyota Corolla$1,945

Benefits of owning an electric car

Despite the hidden costs, there are many benefits to owning an electric car. Many people love having a vehicle that doesn’t run on fossil fuels and creates zero emissions, but that isn’t the only benefit to driving an electric vehicle.

Because electric cars are lighter they have much better performance, accelerating and stopping more quickly than gas-powered cars. Also, because they require so little upkeep, their annual maintenance costs are also much lower than gas-powered cars.

Frequently asked questions

Are electric cars expensive to maintain?

Electric cars usually need less maintenance than cars with an internal combustion engine. While a gas-powered car needs oil changes, spark plugs, transmission fluid, and a whole host of other maintenance to keep your car in good shape, an electric car doesn’t require any of that upkeep. They will still need occasional repairs and basic maintenance like tire rotation, but maintenance costs for electric cars are typically much more affordable than gas-powered cars.

Is an electric car more economical?

According to a 2018 study from the University of Michigan, the average annual cost of driving a gas-powered vehicle is $1,117 while the average annual cost of driving an electric vehicle is $485, making electric vehicles far more economical than the alternative.

How much does an EV battery cost?

Electric vehicle batteries can be very expensive, averaging $11,500 in 2017 according to the International Council on Clean Transportation. There are also battery rental options, which allow you to pay somewhere between $60-$125 per month for your battery. The good news is that EV batteries get cheaper every year, which means the cost to replace your battery could be significantly lower in the future.

How much does an electric car raise your electric bill?

According to Kelley Blue Book, the average increase in electricity for EV charging is $25 to $33 per month, but this depends on a number of factors. How much your local utilities charge per kWh is a big factor, as well as how you get your electricity. For example, people who own solar panels may find that charging their car costs less because they aren’t paying for the electricity.


Policygenius has analyzed car insurance rates provided by Quadrant Information Services for every ZIP code in all 50 states, plus Washington, D.C. 

For full coverage policies, the following coverage limits were used:

  • Bodily injury liability: 50/100

  • Property damage liability: $50,000

  • Uninsured/underinsured motorist: 50/100

  • Comprehensive: $500 deductible

  • Collision: $500 deductible

In some cases, additional coverages were added where required by the state or insurer.

Rates for overall average rate, rates by ZIP code, and cheapest companies determined using averages for single drivers age 30, 35, and 45 based on our sample vehicles.

Rates for driving violations and “poor” credit were determined using average rates for a single male 30-year-old driver with a credit score under 578.

Some carriers may be represented by affiliates or subsidiaries. Rates provided are a sample of insurance costs. Your actual quotes may differ.