How We Calculate Vehicle Ownership Costs
Every cost comparison on GearUp Insights is built on a consistent set of assumptions, publicly available data sources, and a defined methodology. This page explains exactly how we calculate total cost of ownership (TCO) figures so you can evaluate whether our numbers apply to your situation — and adjust them if they don't. Last updated August 2026.
Core Assumptions
All cost comparisons use the following baseline assumptions unless a specific article states otherwise:
| Parameter | Baseline Value | Source |
|---|
| Annual mileage | 15,000 miles/year | Standard TCO convention — AAA Your Driving Costs and Edmunds both model 5 years / 75,000 miles. Note: FHWA's own per-driver average is closer to 13,500 miles/year, so our fuel-cost figures are conservative for a typical driver. |
| Ownership period | 5 years | Standard TCO analysis period (AAA, Edmunds) |
| Gasoline price | $4.07/gallon (national avg) | AAA national average, August 13, 2026 |
| Home electricity rate | 18.44¢/kWh (national avg) | EIA Electric Power Monthly, Table 5.6.A, May 2026 (residential, U.S. Total) |
| Time-of-use (TOU) rate | Varies widely — roughly 9¢/kWh off-peak in low-rate territories to over 30¢/kWh in California | Published utility TOU tariffs. PG&E EV2-A off-peak was about 31¢/kWh in 2026; Southeastern utilities are far lower. Use our Charging Cost Calculator with your own rate. |
| Public DC fast charging | 42¢/kWh (national avg) | AAA national average public EV charging rate, August 6, 2026 |
| Charging losses | Already included — no separate factor applied | EPA: MPGe and kWh/100mi ratings are measured from the wall and already account for EVSE and on-board charger losses (Level 2 AC). Applying an additional loss factor would double-count. |
| Federal EV tax credit | $0 (expired Sept 30, 2025) | IRS.gov — Section 30D credit status |
| Financing | Cash purchase (no loan interest) | Simplification for apples-to-apples comparison |
| Geography | U.S. national average | Regional variations noted where significant |
Articles may adjust these baselines when the comparison calls for it — for example, a California-specific article uses West Coast electricity rates rather than the national average. When we deviate from the baselines above, the article states the change explicitly and links back to this page.
Purchase Price
We use MSRP as the starting point for all vehicle prices, sourced from manufacturer websites and verified against Kelley Blue Book (KBB) and Edmunds listings. Where significant dealer markups or discounts are common, we note this in the article.
Incentives: We do not apply the federal EV tax credit in our baseline calculations because it expired on September 30, 2025. State-level incentives vary widely and are noted as scenario adjustments rather than baseline figures.
Destination fees: For consistency we always start from MSRP plus a standard destination fee (roughly $1,000–$1,500 for most mass-market models) rather than advertised prices that exclude delivery charges. Trade-in value, dealer markups, and market-based discounts vary so much by region and negotiation that we treat them as scenario adjustments in the interactive calculators rather than baseline inputs.
Representative models used: Tesla Model 3 Standard Range (~$38,990), Chevy Bolt EV (~$26,500), Toyota Prius (~$30,000), Toyota Camry Hybrid (~$32,000), Honda Civic (~$26,000), Toyota Camry (~$28,000). Prices are approximate and reflect 2025–2026 model year MSRP.
Fuel & Electricity Costs
Gasoline vehicles: Annual fuel cost = (annual miles ÷ MPG) × gasoline price. MPG figures come from EPA FuelEconomy.gov official ratings (combined city/highway).
EVs: Annual charging cost = (annual miles ÷ miles per kWh) × electricity rate. Efficiency figures (miles per kWh) come from EPA FuelEconomy.gov. We calculate three scenarios: home charging at national average rate, home charging at TOU off-peak rate, and a mixed scenario (80% home, 20% public fast charging).
To convert EPA efficiency ratings into a dollar figure, we divide rated miles per kWh by the applicable charging rate. For the mixed scenario we assume 80% of charging happens at home and 20% at public DC fast chargers, which reflects the typical usage pattern across published survey data. When an article compares plug-in hybrids, we apply the electricity rate to the electric-only portion of miles and the gasoline price to the engine portion.
Hybrids: Use the same gasoline formula as conventional vehicles, with EPA hybrid-specific MPG ratings. Plug-in hybrids (PHEVs) are calculated with a blended approach based on typical electric-only range utilization.
Maintenance Costs
Maintenance cost estimates are built from three sources:
- Manufacturer maintenance schedules — We read the actual recommended service intervals from Toyota, Honda, Tesla, and Chevrolet owner's manuals to identify what services are required and at what mileage intervals.
- AAA Your Driving Costs Study (2025) — Provides annual maintenance cost benchmarks by vehicle category (small sedan, EV, hybrid).
- Consumer Reports Reliability Survey — Used for long-term repair frequency and average repair cost data.
Key differences captured: EVs have no oil changes, no transmission fluid, no spark plugs, and reduced brake wear (regenerative braking). EVs do require tire rotation, cabin air filter replacement, and periodic battery coolant checks. Tire wear is noted as slightly higher for EVs due to vehicle weight.
Insurance Costs
Insurance estimates are based on national average annual premiums from the Insurance Information Institute (III) and Bankrate insurance survey. We use a standard driver profile: 35-year-old driver, clean record, full coverage, $500 deductible.
EVs typically carry 5–15% higher insurance premiums than equivalent gasoline vehicles due to higher repair costs. We apply a 10% premium for EVs over comparable gasoline models unless model-specific data is available.
Depreciation
Depreciation is calculated as: Purchase price − estimated resale value after 5 years. Depreciation estimates are based on iSeeCars 2026 category averages: EV 57.2% / Hybrid 35.4% of MSRP over 5 years.
EV depreciation has historically been higher than gasoline vehicles due to rapid model updates and battery range concerns. However, this varies significantly by brand and model. Tesla Model 3 retains value better than most EVs; Chevy Bolt has historically depreciated faster. Therefore, in comparisons where model-specific residual data is unavailable, this variation is not reflected — a limitation that can cause break-even mileage to be unrealistically high when purchase prices differ significantly.
We note where depreciation assumptions significantly affect the comparison outcome and provide sensitivity ranges where relevant.
Primary Data Sources
All cost figures are ultimately traced to the following publicly available sources. We prefer primary government or industry data over aggregated third-party estimates.
Update Policy
Vehicle ownership cost data changes over time as gasoline prices fluctuate, electricity rates change, new models are released, and government incentives are modified. We review and update our core cost comparison articles on the following schedule:
- Quarterly: Gasoline and electricity price assumptions updated to reflect current EIA data
- Annually: Vehicle prices, depreciation estimates, and maintenance cost benchmarks reviewed against latest model year data
- As needed: Federal or state incentive changes, major policy shifts (such as the Sept 2025 federal EV credit expiration), or significant new data
Each article displays a "Last Updated" date. If you notice data that appears outdated, please contact us.
Every figure on this page carries an explicit source and date, so you can tell how current a number is at a glance. When a baseline changes (for example, the EIA electricity rate or the AAA gas price moves in a quarterly update), every article and calculator that imports the shared baseline is updated together — we never leave a stale number behind.
Limitations & What We Don't Include
Our TCO calculations are intentionally simplified to be useful for most drivers. The following factors are not included in our baseline figures:
- Loan interest / financing costs — We assume cash purchase. If you finance, add the total interest cost to the purchase price column.
- Home charger installation — Level 2 charger installation costs $500–$2,000. We note this as a one-time EV-specific cost in relevant articles. The federal Section 30C home charger credit expired for equipment placed in service after June 30, 2026, so no federal offset applies to installation costs.
- Registration and taxes — These vary significantly by state and are excluded from national comparisons.
- Parking and tolls — Not vehicle-type-specific in most cases.
- Opportunity cost of capital — We do not apply a discount rate to future savings.
These simplifications make our numbers easier to compare but mean your actual costs may differ. We encourage you to use our figures as a starting point and adjust for your specific situation.
Cost Comparison Articles Using This Methodology