MW Looking to get an EV for the first time? How to avoid making a huge financial mistake.

By Venessa Wong

$4 gas got you looking at EVs? You're not alone. Here's what to think about first.

Fuel costs alone do not make EVs the best financial choice for consumers.

Join MarketWatch for a live talk about teen investing on Wednesday, May 6 at 1:30 p.m. Eastern time. Sign up and submit your questions for the Q&A here.Higher gas prices have more people looking at electric vehicles - but if you're EV-curious, it's important to remember that fuel costs are far from the only factor when deciding whether an EV makes financial sense.

American car shoppers have increasingly been eyeing electric vehicles in the wake of the U.S. and Israel's war with Iran, which has sent gas prices up to an average of more than $4 a gallon across the U.S.

From the end of February to the end of March, searches for new and used EVs on Cars.com increased by 25%, according to data from the company. Half of surveyed car shoppers said they are considering an EV or a plug-in hybrid EV due to rising gas prices. Even car-rental companies are seeing a surge of interest in EVs.

Even as electricity rates have increased, charging an EV still costs less than filling up a gas tank. A new Kelley Blue Book analysis estimates someone driving the national average of 1,015 miles per month would "need to refuel about three times each month and spend about $147.24 ($49.08 x 3) for gas, compared to $59.66 for charging an EV at home" at the average 17.65 cents per kWh.

Yet fuel costs alone do not make EVs the best financial choice for consumers. Simply put, "spending $55,000 to save on $5-per-gallon gas, the economics don't work out," Ivan Drury, director of insights at Edmunds, told MarketWatch.

A car should meet your needs in terms of size and other features first. "Don't rely on the price of gas to make your determination," he said. "The worst thing you can do is drive it for a year and say, 'You know what? This just doesn't work for my family,'" and end up trading in a car with thousands of dollars in negative equity - a more severe problem with EVs, which depreciate in value quickly.

Read more: These hidden costs of car ownership are giving buyers sticker shock long after they leave the dealership

High price to buy or lease EVs

First, there's the high cost of EVs for those planning to buy. The average transaction price for a new electric car was $56,170 in March, according to data from the car-buying site Edmunds. Dealers lowered EV prices from the average $60,446 a year ago to compensate for the loss of the EV tax credit, which expired in September 2025.

Despite those reductions, EV prices remain considerably higher than the average $45,092 for new non-EVs.

Even used EVs are more expensive than other options, with an average sales price of $31,817 compared to $25,839 for all used cars.

Meanwhile, the price to lease EVs remains high as well. While there are still attractive EV lease deals - with some dealers offering payments of less than $300 per month with $4,000 down - on average, the monthly payment on a new EV lease in March was $665, compared to $594 for non-EVs, according to Edmunds.

At this point, "the ideal [EV] customer is one who has the easiest way to charge, and who doesn't have a long commute," said Drury - not consumers who are price sensitive.

More more MarketWatch: Buying a car out of state can save you thousands of dollars - but ask these 3 questions first

What to consider if you're looking at an EV

Recent policy changes have created potential hurdles for EV drivers. After allowing the EV tax credit to expire last year, the Trump administration has also halted funding to build charging stations and has proposed a requirement that chargers contain mostly domestically made parts.

"The Trump administration is committed to maximum optionality for American consumers without Joe Biden's heavy-handed mandates," White House spokesman Kush Desai told MarketWatch in an email. "The Trump administration's proven economic agenda of tax cuts, rapid deregulation and energy abundance is creating a prime growth environment for businesses and consumers alike."

Local incentives for EV buyers may still be available - including newly announced funding in New York state - but the uncertainty surrounding the EV market has slowed sales. Electric vehicles went from 10.6% of new-car sales in the third quarter of 2025 to 5.8% in the first quarter, according to Cox Automotive data.

Demand for hybrids, on the other hand, has continued to "demonstrate solid growth," Cox noted, led by Toyota $(TM)$ (JP:7203) and Honda $(HMC)$ (JP:7267).

Related: Americans would love this $25,000 hybrid SUV - but it's not available here yet

As EV sales increased in other countries, "the U.S. EV market has clearly entered a new phase," said Stephanie Valdez Streaty, Cox's director of insights, in a statement. "What comes next will be driven less by policy and more by fundamentals: more affordable products, smarter pricing strategies and continued investment in infrastructure."

The bright spot for the EV industry has been the used market, where demand remains positive, according to a recent report by CarGurus. Used models such as the Tesla $(TSLA)$ Model Y (with an average price of $30,100), Hyundai (KR:005380) Ioniq 5 ($25,500), and Chevy $(GM)$ Equinox EV ($26,200) were popular in the first quarter.

Cars.com also pointed out used EV models with low average list prices for curious shoppers:

Subaru (JP:7270) $(FUJHY)$ Solterra: $23,866Toyota bZ/bZ4x: $24,125Ford $(F)$ Mustang Mach-E: $30,339Chevrolet Blazer EV: $30,242Chevrolet Equinox EV: $26,550

But even at these prices, because EV adoption remains in its early stages in the U.S., "I still would say, for anyone who's never had an EV before, just lease it - or buy used, because it's already been depreciated," Drury said. "If it's your first go-round [with an EV], don't let it also be one of your worst mistakes financially."

See also: Tesla is in a no-win situation as it faces the ire of its earliest customers

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-Venessa Wong

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April 25, 2026 09:00 ET (13:00 GMT)

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