Hybrid vs. Gas-Powered Cars: Which is Best?

Since they first hit the market more than 20 years ago with the Toyota Prius, hybrid cars have gotten:

• More affordable
• More stylish
• More efficient

For these reasons, more Americans than ever are turning to hybrids. One of the main reasons, aside from environmental concerns, is cost savings that may come with minimizing the purchase of high-cost gas. But the questions remain: Do you really save money with a hybrid? And does it make more sense for you to purchase a hybrid or a traditional gas-powered car?

Below, we discuss the factors you should consider when deciding on hybrid vs. gas, including:

No matter what you prefer, make sure you're covered with an affordable car insurance policy. An independent insurance agent in your area can make sure you get the best coverage for your needs and budget. 

Hybrid vs. Gas: What's the Difference?

Gas-powered vehicles run on the internal combustion engine. When you turn the car on and press the accelerator, fuel from your gas tank moves through a filter that removes any debris to prevent clogs in the rest of the engine. 

A fuel injector pumps the filtered fuel into one of the engine’s cylinders. Pistons in the cylinders work to ignite the gasoline, creating energy to propel the wheels of the car.

Hybrid cars use a combination of both electric and gasoline power. At any time, one or the other or both of the engines may be engaged. Hybrids use regenerative braking to charge the car’s battery pack, and in some cases, the gas engine may also charge the battery.

Hybrid vs. Gas: Up-Front Costs 

Does a hybrid cost more than a gas car? The answer will always be: It depends. After all, different gas and hybrid cars come with different price points. 

Ultimately, the up-front costs depend on what you can afford and what model you want. But, in general, a hybrid car will cost more than a comparable gas-powered car. 

• The average initial cost of a gasoline-powered vehicle is $33,797
• The average initial purchase price of a hybrid is $39,040

Keep in mind that plug-in hybrids might require you to purchase charging equipment, and you might need to install a charger in your home. A basic 240-volt home charging station costs around $1,150 to $2,750 to purchase and install. These costs could increase if you have an older home and need to update your wiring or electric panel to handle the new load. 

Those who buy new hybrid or fully electric vehicles may be eligible for a tax credit of up to $7,500, and used electric or hybrid car buyers may qualify for up to $4,000. You can also opt to transfer the credit to an eligible dealer for an immediate discount.

Not all hybrids qualify for this discount, so be sure to check Internal Revenue Service resources in advance. In addition, the new presidential administration in 2025 may make changes or rescind this policy. Again, be sure to check for updated rules before you factor the tax credit into the purchase price of a hybrid car. 

Hybrid vs. Gas: Fuel Savings

Considering that it's likely you'll pay more for a comparable hybrid car versus a gas-powered car, you'll want to know if you'll be able to recoup your upfront costs with fuel savings over time. There are many online fuel economy calculators, such as fueleconomy.gov from the EPA, which allows you to compare various vehicles side-by-side.

In general, electricity is cheaper than gasoline. 

As of this writing, the average cost of a gallon of gas in the United States is $3.149. 

• Full tank (14 gallons) of gas for a typical gasoline-powered car = $44
• Typical range of a full tank = 350 miles
• Average price per gallon using these assumptions = $0.13
• Miles driven per year for the average American = 14,263 miles
• Total annual fuel cost = $1,854.19

The average cost per 1 kWh of electricity in the United States is $0.17.  Using these numbers and assuming your electric vehicle has a 100 kWh battery:

• Cost of a full charge = $17
• Battery median travel range = 234 miles per charge
• Cost per mile traveled for electricity = $0.07 
• Miles driven per year for the average American = 14,263 miles
• Average annual cost = $998

Aside from these calculations, there's a lot more to consider. When looking at fuel costs, you should also account for the following: 

• Daily commute: Hybrids use more electric power at low speeds and in heavy traffic. This means you could get much higher mileage out of your hybrid than someone who has to drive the interstate short distances at high speeds.
• Weather: If you live in a hot place and use the air conditioner constantly, you will use more gas.
• How long you keep the car: If you plan to keep your hybrid for just three years, you may not make up for the upfront price difference in gas savings. The longer you keep it, the more a hybrid makes sense.

What you drive, where you drive, how you drive, and how long you keep the car are all factors that will affect whether you recover the upfront costs of a hybrid in gas savings. 

Hybrid vs. Gas: Environmental Considerations

If reducing your carbon footprint is one of your main reasons to choose hybrid over gas, your choice is a little bit easier. 

New cars and trucks are the top polluters in the world. Greenhouse gas (GHG) emissions from transportation account for about 28% of total U.S. greenhouse gas emissions. Burning fossil fuels like gasoline and diesel releases carbon dioxide, a greenhouse gas, into the atmosphere. 

• A typical passenger vehicle emits about 4.6 metric tons of carbon dioxide per year. This number can vary based on a vehicle’s fuel, fuel economy, and the number of miles driven per year.
• Every gallon of gasoline burned creates about 8,887 grams of CO2.

However, hybrid car batteries are also problematic despite their reputation as environmental saviors. As the batteries age, they need to be replaced and require a complex process for safe disposal. They contain toxic materials such as lithium, cobalt, and nickel, which can leak into the soil and groundwater, creating serious environmental hazards. 

What's more, harvesting these rare earth minerals to manufacture the batteries in the first place is dangerous, environmentally hazardous, toxic, and often done in poor countries with questionable labor practices. The production of electric vehicle batteries can result in more carbon dioxide emissions than the production of gasoline-powered cars. 

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Hybrid vs. Gas: Tax Benefits 

Most people think about saving money on gas, but you might also be able to save up to $7,500 in tax credits when you buy a hybrid car!

The amount you can claim as a credit will depend on the model and its battery. When you're researching cars, be sure to look into their eligibility for tax credits. 

Take note that the hybrid and electric vehicle tax credits may be changed or rescinded at some point during the Trump administration. 

How an Independent Insurance Agent Can Help You Get Car Insurance for Your Hybrid or Gas-Powered Car

Finding the right car insurance policy can be just as overwhelming as choosing a car. 

Experts recommend that you shop around for the best coverage and rates. An independent insurance agent can make things much easier by doing the comparison shopping for you. 

Independent agents in your area can work with a variety of insurance companies to find the coverage you need at the best price. 

Find an independent insurance agent near you to customize coverage for your hybrid or gas vehicle.