CarInsurance.com Insights
- Owning an electric car has many hidden costs, from pricey insurance to higher registration fees.
- Some of those costs can be recouped in lower maintenance fees.
- Drivers might be willing to pay more to protect the environment.
Electric cars look set to take to America’s roadways in a big way. The recent Inflation Reduction Act’s tax credits boosted the affordability of these cars, and bipartisan infrastructure legislation provides funding for charging networks – all 50 states will receive funding to install charging stations on 75,000 miles of highway.
But as electric cars become more ubiquitous, it is crucial to understand the hidden costs of EV ownership.
1. Electric vehicles are more expensive to insure
When you buy a new car, it is easy to overlook the cost of insurance. But it’s also a mistake.
Cars with higher insurance rates drain money from you year after year. And electric vehicles generally cost more to insure than traditional gas-powered cars. Electric vehicles can be costly to repair, making them more expensive to insure.
According to Lynne McChristian, director of the Office of Risk Management and Insurance Research at the University of Illinois-Urbana Champaign’s Gies College of Business, there are a couple of reasons why.
“Typically, the repairs are more expensive. So when an electric car gets damaged, it’s not as simple as just replacing or repairing a fender. There are sensors and electronics that might be damaged. And with electric cars, unlike gas-powered vehicles, you might not be able to repair it. You might have to replace the whole thing. So that’s a difference,” she said.
Insurance costs reflect the cost of claims.
“And the cost of claims with electric vehicles are just higher,” she said.
McChristian noted that mass-produced EVs haven’t been around long. And, she said, “because electric vehicles are still relatively new, there’s not decades of claims data. And that uncertainty sometimes adds a complexity to [insurance] pricing.”
The best way to lower these rates is to shop around and compare quotes from various providers.
2. Electric cars have expensive batteries
There is no way to sugarcoat it: The cost of replacing a battery in an EV is exorbitantly high.
Estimates vary, particularly from model to model. But a recent survey by The Drive found that you can expect to pay $10,000 to $20,000 — and sometimes more — to make this repair. The battery modules in current Tesla models should last 300,000 to 500,000 miles.
Battery costs aren’t just a maintenance worry; they’re also the top insurance concern for prospective EV buyers. A 2026 CarInsurance.com survey found 51% of drivers considering an EV cite battery replacement or repair coverage as their biggest insurance-related concern, well ahead of worries about higher premiums (24%) or uncertain long-term EV insurance trends (17%).
And 41% of drivers said they weren’t even considering an EV. This mirrors the attitudes found by a 2023 CarInsurance.com survey as well.
3. EVs have pricey repairs
The good news about electric car ownership is that ongoing maintenance costs can be lower than those of traditional gas-powered vehicles.
In fact, scheduled maintenance costs for a light-duty battery-electric vehicle total about 6.1 cents per mile, compared to 10.1 cents per mile for a conventional internal combustion engine vehicle, according to the U.S. Department of Energy.
The bad news is that the cost can be steep when you need to repair your electric vehicle. A survey of auto insurance claims by CCC Intelligent Solutions Inc. found that the average EV model costs 27% more to repair than the average non-EV model.
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4. You have to pay to charge a Tesla at a charging station
Charging your Tesla is not free. According to the U.S. Department of Energy, it costs an average of $13.96 to charge a Tesla. The precise cost varies by car model and ranges from $9.62 to $18.30. However, those charging costs still represent significant savings over filling a tank with gas.
5. You might need a home charger for your EV
If you buy an EV, you might need a home charger to keep your vehicle road-ready. The cost of purchasing such a charger typically runs from about $300 to more than $1,000, according to J.D. Power.
You likely will have to pay around that much to have an electrician install the unit, which adds to the overall cost. J.D. Power notes that if you have a 240-volt outlet for charging the car, you might not need to install a home charger to save money.
6. High initial purchase price of an EV
Electric vehicles are not cheap. According to the Natural Resources Defense Council, the average cost of a new EV was about $10,000 higher than the average for all cars, including gas-powered and electric vehicles. The high cost of EVs is a big reason they have not yet been widely accepted.
7. More expensive registration fees
The fee you pay to register a vehicle is typically based on the car’s value. Because EVs have higher sticker prices than gas-powered vehicles, expect to dig deeper when registering an electric car. Check with your state’s DMV to see the title and registration fees.
8. Possibility of future VMT taxes on electric vehicles
While buying an electric vehicle might be good for the planet, it may hurt your wallet with a “vehicle miles traveled” fee, often known as a VMT. This fee is intended to replace the revenue governments will lose as electric vehicles become the dominant form of transportation and gas taxes become an unsustainable funding source for roads.
Several states have looked into implementing a VMT fee, and smaller programs featuring these fees are already underway in Oregon and Illinois.
Adam Grant, a car specialist and founder of Car Fuel Advisor, said that replacing gas taxes with VMT charges will raise commuting costs for users and mass-transit drivers in urban areas, and that implementing a nationwide VMT tax could be more expensive than the resulting revenue gains.
“Considering the projected growth of electric vehicles in the United States, there will likely be 19 million electric vehicles on the road by 2030. Around 15.2 million would be battery-electric vehicles that consume no gasoline at all,” Grant said.
“As it turns out, those EV owners don’t pay any federal tax that can contribute to the funds for HTF. To keep the Federal Highway Trust Fund solvent in this situation, there is no other way but to implement a tax on electric vehicles for their use on the highways.”
Paul Miller, managing partner & CPA at Miller & Co., said the increasing popularity of hybrid and electric vehicles is reducing gas tax revenues, prompting more states to consider charging fees based on miles driven to help pay for roads and bridges.
“Under some of the current programs, the state installs devices in vehicles to measure the miles driven. Other programs rely on drivers to report the miles they’ve driven, or track miles through year-over-year odometer readings when drivers renew their registrations. Under all states’ existing laws, vehicle owners voluntarily sign up for the programs,” Miller said.
Final thoughts: Hidden costs of owning an electric car
Buying an electric car can be expensive, and hidden costs only add to the financial pain. But these cars are generally cheaper to maintain than gas-powered ones, helping you recoup some of the cost.
Resources & Methodology
Sources
- The Drive. “The Replacement Battery Costs for These Six Normal EVs Is Staggeringly High.” Accessed September 2026.
- FleetOwner. “Focus on fuel taxes — and prospects for a VMT.” Accessed September 2026.
- J.D. Power. “What Does an EV Home Charger Cost?” Accessed September 2026.
- Natural Resources Defense Council. “Electric vs. Gas Cars: Is It Cheaper to Drive an EV?” Accessed September 2026.
Methodology
In the fall of 2026, CarInsurance.com surveyed 1,471 drivers about auto insurance in September 2026, exploring attitudes toward climate change, electric vehicles and insurance costs. CarInsurance.com editors collected rates from Quadrant Information Services for a 40-year-old male and female driver carrying a full coverage insurance policy with limits 100/300/100 and $500 comprehensive and collision deductibles. Read the detailed methodology for more information.
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