True Cost of Owning an EV: What Buyers Miss (2026)
On this page
Most EV buying decisions are made on sticker price. Most EV satisfaction or regret comes from the full five-year picture. Here's how to think about what an EV actually costs to own, the real savings, and where costs surprise people.
The Variables in Total Cost of Ownership
Total cost of ownership (TCO) over five years includes purchase price, financing cost, fuel or electricity, insurance, maintenance, tires, registration, and depreciation. EVs tend to cost more upfront, less to fuel and maintain, somewhat more to insure, and depreciate at a rate that's now more predictable than during the volatile period of 2022–2024.
Financing Cost: The Most Important Variable
On a $45,000 EV loan, total interest paid over the loan term varies dramatically by rate:
| APR | 60-month payment | Total interest |
|---|---|---|
| 5.25% | ~$854 | ~$6,240 |
| 7.50% | ~$900 | ~$9,000 |
| 9.99% | ~$955 | ~$12,300 |
The difference between a 5.25% and 7.50% loan on $45,000 is $2,760 over 60 months. This is the cost most easily reduced by lining up your financing before you buy.
Fuel Savings: Consistent and Significant
US average electricity rate: ~$0.17/kWh. A Tesla Model Y Long Range uses approximately 25 kWh per 100 miles.
At 12,000 miles/year: ~3,000 kWh/year × $0.17 = ~$510/year in electricity.
A comparable gas SUV at 28 MPG: ~430 gallons/year × $3.50 = ~$1,500/year in gas.
Annual fuel savings: ~$990. Over 5 years: ~$4,950.
Maintenance: Lower, Not Zero
What you won't need to think about with an EV: oil changes, transmission service, spark plugs, exhaust.
What remains: tire rotations, cabin air filter, brake fluid, wiper blades.
Total annual EV maintenance: roughly $200–$400/year vs. $800–$1,200/year for a comparable gas car.
5-year maintenance savings: $2,000–$4,000.
Insurance: 10–20% Higher
EV insurance is higher due to repair costs, specialized components, and fewer certified shops. A Tesla Model Y LR runs $1,800–$2,400/year; a comparable gas SUV runs $1,500–$2,000. Shopping quotes specifically for the EV model is worthwhile, rates can vary significantly between insurers. Tenet customers have had good success with StateFarm and AllState, they also payout fairly if the vehicle is totaled.
Depreciation: Stabilizing
2023–2024 saw sharp depreciation as Tesla cut prices. 2022–2024 used Tesla values have since stabilized. Current 5-year depreciation for a Model Y Long Range: roughly 45–55% of purchase price retained, which compares favorably to mainstream gas SUVs. Hold for 5+ years and the math improves significantly.
Five-Year TCO Comparison
| Tesla Model Y LR | Toyota RAV4 Hybrid | |
|---|---|---|
| Purchase price | $52,490 | $37,000 |
| Financing (5.25%, 60mo) | $6,240 interest | $4,400 interest |
| Fuel (5yr) | $2,550 | $5,250 |
| Maintenance (5yr) | $1,500 | $4,000 |
| Insurance (5yr) | $10,500 | $8,500 |
| Tires (5yr) | $1,800 | $1,200 |
| Registration fees | $900 | $600 |
| Home charger install | $1,200 | — |
| **Total 5-yr cost** | **~$77,180** | **~$60,950** |
| Residual value (est.) | ~$26,000 | ~$20,000 |
| **Net 5-yr cost** | **~$51,180** | **~$40,950** |
The Model Y costs more on a net basis. The math is far more attractive when comparing used. A used Model Y (starts at $29,000–$32,000), where the lower purchase price and residual value difference relative to the gas alternative are smaller, while fuel and maintenance savings are even better.
The Financing Rate Factor
The single variable most within a buyer's control: the financing rate. At $45,000, every 1% of APR costs roughly $1,200 in additional interest over 60 months. Most buyers who finance through a dealer, marketplace, or Tesla's in-house program pay 1–3% more than they need to.
One Last Thing
Total cost of ownership analysis consistently shows EVs are financially competitive with gas cars over five years, particularly for buyers who hold the car long-term and charge at home. The purchase price gap is still sizable but greatly reduced for used vehicles.
Check your EV financing rate — two minutes, no credit impact.
Rates as of April 2026, subject to change. APR range 5.25%–18.99%; regional rates as low as 4.40% through select credit union partners. Minimum loan balance $10,000. Tenet Energy Inc., NMLS #2262929.