As gas prices reach record highs, many consumers are turning to electric and hybrid cars to save money further down the line.

There is an ever-growing number of hybrid and electric vehicles, as more and more giants of the motor industry scramble to get ahead of the game. This is partly due to the ban that some states will implement on the manufacturing and selling of gas and diesel cars starting in 2035.

For a long time, the Toyota Prius dominated this market space, so much so that as of September 2022, it is the world's top-selling hybrid car with over 5 million units sold.

New players are emerging, none more so than the Elon Musk-owned Tesla. Research estimates that Tesla has sold 1,917,450 units, with many of those sales happening in the last few years.

The main difference is the way the cars are made. There are three different methods to power the car's wheels: directly from the engine, exclusively from the electric motor, or jointly from both power sources.

For example, the Toyota Prius vehicles are predominantly hybrids, which means they have more than one method of powering the vehicle as they contain both a small engine, as well as a battery.

In a hybrid, a regenerative braking system generates energy whenever you slow down or apply the brakes and stores it in the battery for later use. It is key to remember that you do not charge hybrid vehicles like the Prius, they still rely on gas or diesel, but they use far less than a regular gas or diesel-powered car, saving you money and fewer CO2 emissions.

As for electric vehicles such as those manufactured by Tesla, these work by receiving energy from the charged battery, which is then converted into power by the electric motor. Once the power has been generated, it goes straight to the wheels.

Unlike hybrids, electric cars rely purely on electricity to get them from a to b, making them incredibly economical as they emit close to zero emissions.

To fuel an electric vehicle, you will either need to have a home charger installed at your home where you can then use your home’s electricity. Or you can use public charging stations. Rapid charging stations can power your vehicle from 0% battery to 80% in around an hour.

• Price

Electric cars are well-known for being quite expensive to buy. Kelley Blue Book estimates that the average cost of a new electric car is $65,291 as of September 2022, considerably more expensive than the average cost of a new car in the US, which is $48,681.

Hybrids are much cheaper in comparison, with prices typically in the range of $25,000 - $35,0000 – which is significantly cheaper than an electric car.

You will have to pay for fuel with a hybrid, even if it is far less expensive than your typical car. The official Fuel Economy US Government website estimates that the cost to fuel a 2021 model Prius is $1000 annually. So even if you keep the car for 10 years and pay for fuel on this estimate, hybrid cars still work out cheaper.

• Maintenance

In terms of maintenance, both hybrid and electric cars will likely need a battery change at some point during ownership. Research suggests that the cost of charging a battery in a standard model Prius is around $1,023 - $1,235.

Again, for an all-electric car, these prices jump up drastically, with ReCurrentAuto suggesting a battery replacement could cost you anywhere between $5,000 - $20,000 depending on the type and model of your vehicle.  

However, if you buy a brand new hybrid or electric car, the cost of a battery may be included in the manufacturer warranty, as long as it is within an 8-year period.

• Tax credits

Both hybrids and EVs may qualify for government-backed incentives. The IRS says that “You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV.)” 

It is always worth checking the laws and incentives in the state you live in, as they tend to vary from place to place.

Verdict – Hybrids are much cheaper

Unsurprisingly, hybrid cars are on average much cheaper to buy, lease, and maintain, but they will cost you a little more in annual fuel costs. As more and more companies adopt electric vehicles at scale, we should see these prices fall.

Pros 

• Environmentally friendly – Hybrids emit far fewer emissions than regular gas or diesel-powered cars, so for those who want to do their part in helping save the planet, they are ideal.

• Cheaper – When you factor in the fuel saving, alongside the potential government-backed incentives, hybrid cars can be considered as good value for money.

• Less maintenance – Typically speaking, hybrids tend to require less maintenance than the average car. Still expect occasional oil changes and maybe a new battery, but these are often covered by manufacturer warranty.

• Driving experience – Hybrids offer a very pleasant driving experience, especially given they are so quiet thanks to the motors. If you’re someone who values this, a hybrid could be the car for you.

Cons

• Upfront cost – The upfront cost of hybrid cars is likely to be higher than your average vehicle. This is often due to new technology, increased demand, and limited supply.

• Costly maintenance – Even though they typically require less maintenance, should something go wrong, the cost is likely to be higher than usual. Replacement parts can be expensive and scarce, and the developed technology is more complex to fix, resulting in higher costs.

• Fossil fuels – Despite being much better for the environment, hybrids do still produce fossil fuel emissions. Electric cars do not produce any, so if you are conscious about your carbon footprint, that might be the way to go.

If you still want to try a hybrid car, but don't want to pay the high upfront cost or deal with costly maintenance, consider a FINN car subscription. No down payment is necessary and maintenance is included in your subscription. Plus, FINN offsets emissions for every vehicle. 

Pros

• Emission – Electric cars produce zero emissions as they rely solely on electricity to power themselves. For eco-centered users, this is a huge plus.

• Incentives – There are many government-backed incentives for those who buy electric, often giving you money back on your purchase price. However, these only apply if you buy a new electric car, not a used one.

• Fuel – No more stopping at gas stations and spending upwards of $50 on gas or petrol. Electric cars run on electricity only, so just find a charging station and top up at will.

• Tax – Electric cars are tax-free as are zero-emission vehicles. This means you can save yourself hundreds of pounds annually compared to driving a typical gas or diesel vehicle.

• Maintenance – You can also wave goodbye to regular oil changes, as there is no need for them with EVs. There are also far fewer moving parts, which means less can go wrong resulting in lower maintenance costs for the driver.

Cons

• Range – Although drastic improvements have been made, the range of an all-electric car is much less than a gas or diesel alternative. This can be quite a shock if you’re new to EVs and can result in ‘range anxiety.’

• Charging  – Unlike gas stations that are scattered here there and everywhere, charging points for EVs are a little more scarce. Efforts are being made to increase the number of chagrin stations, but we’re still a long way off matching the sheer volume of gas stations.

• Charging time – Filling up your car's tank with gas or diesel takes less than a minute. Sadly, for EVs, this can take upwards of an hour. Rapid charging stations can take your battery life from 0% to 80% full in around an hour, but that is still far more time-consuming.

• Price – This is a big one. Electric car prices are currently sky-high, especially when compares with hybrids or petrol/diesel vehicles. They may be cheaper to run, and backed by government incentives, but the cost is still a real premium, which means only a select few can afford to buy a new electric vehicle.

The process of getting your hands on a new or used hybrid or EV is the same as any car. Either go to a dealer and check the stock, inquire online, or check second-hand sites. Tesla has completely streamlined the process, and you can now customize your car and choose from many financing options all from their website.

An alternative could be to lease one if you can find a good deal. You should be aware that you may need to wait longer for these types of vehicles given the huge demand and slightly faltering supply.

For a hassle-free alternative, consider trying a car subscription service like FINN. With a FINN car subscription, you can drive the latest hybrid and all-electric car models available with contracts starting from just 6 months.

Simply browse our ever-growing selection of new cars, fill out a few basic details, and arrange your free delivery. It has never been easier to get your hands on the latest models.

You should now have a better understanding of what hybrid and electric cars are, how they work, what they cost, and the pros and cons.

If you can afford them, they are great options for doing your part for the planet, and maybe saving you some money in the long run. Be sure to look out for any government incentives when buying new, as this can further increase your savings.

Starting in 2035, some states will ban new cars that are fitted with gas and diesel engines, so the future really does lie with hybrid and electric vehicles.