How to Decide if an Electric Vehicle is Right for You (And Your Financial Plan)?

Feeling pressure at the pump? You’re certainly not alone. Amid rising conflict in the Middle East, the average price of gas in the US has risen to over $4 for the first time since 2022. While geopolitical tensions are likely to be a temporary disruption, these fluctuations may have many considering long-term cost-reduction strategies. Going electric might be one of them.

Depending on your lifestyle and financial situation, purchasing an electric vehicle (EV) could be a great move. But, before you hit the gas pedal, it’s important to understand some implications that could mean fewer overall savings than you may think.

In this blog, we will review some key financial considerations when making the switch to EV so you can decide if it’s a good fit for your overall financial plan.

Would I Qualify for an Electric Car Tax Credit After 2026?

You may have heard one advantage of having an EV was receiving a $7,500 federal EV tax credit. However, as of September 2025 that credit has expired, and there is no anticipated tax credit like it to replace it at this time. So, if this was a determining factor in your decision, think again.

One of the main objectives of this tax credit was to help bridge the gap in affordability. However, as of September 2025, the average transaction price of an EV was $58,125 and $50,080 for an gas-powered vehicle. While increased domestic manufacturing is helping bring the price of electric vehicles closer to its traditional counterparts, the gap has not closed just yet.

Other Savings and Cost Considerations

Although the federal tax credit has expired, many dealers are offering discounts of their own to help incentivize consumers to make the switch. Every dealer and region has their own offers for leasing and buying, but in some cases, they may help offset the higher upfront cost.

Another consideration that goes beyond the price of the vehicle or lease payment is your car insurance. Since EVs tend to be more expensive to repair, it’s possible that your insurance premiums could be higher than your traditional vehicle. For this reason, it’s very important to price out your potential coverage before signing any dotted lines to help avoid unexpected expenses.

The good news is we are seeing manufacturers push innovation toward more affordable and cutting-edge technology EV options – like the Nissan Leaf, Kia EV3 or the Rivian R3. As technology improves, we could see maintenance and repair costs come down over time.

Is EV a Good Fit for My Lifestyle?

Regardless of possible cost-savings, driving an electric vehicle comes with other lifestyle considerations that may or may not be a good fit for everyone. Ask yourself:

• How much do I drive on a daily / yearly basis? A general rule of thumb is that driving less than 75 miles per day and over 10,000 miles per year for roughly 4-5 years is a break-even point both economically and financially. Factor in your commute, daily habits, and how often you take longer trips.

• How long do I plan to keep this vehicle? If you are someone who enjoys a new car with new technology every few years, leasing an EV might be a great option for you. But if you are someone who likes to own a car and drive it until the wheels fall off, be aware that you might have steep repair and maintenance costs over time. With EV technology rapidly evolving, you may feel like your car is a relic in just a few years, compared to its newer siblings.

• Does my home and community support charging needs? One of the biggest considerations is if your home can support a charging station. If you live in a condo or apartment building, is there a charging station on-site? Also evaluate public charging access in your area.

For more information about financing or leasing cars in retirement (without wrecking your budget), check out our short YouTube video here.

Besides your home, your car may be one of your largest assets. Deciding what kind of car you buy (or lease) should be considered within your overall financial plan. A financial adviser can help you evaluate your options and determine what best supports your long-term goals. If you’d like to speak with an Advance Capital adviser, click here to get started.