Hybrid vs. gas cars in Canada

If you’re in the market for a new car, the options can feel overwhelming, especially with so many engine types now available. It’s no longer just about picking your favourite make, model, or colour. You also need to decide how your car is powered. Should you stick with a traditional gas engine? Or is it time to consider a hybrid?

If you're leaning toward a hybrid vehicle, you're not alone. According to S&P Global, about one in every six new vehicles registered in Canada is now a zero-emission model (including hybrids and electric vehicles). But there are still many vehicle owners who choose to remain with a gas-powered vehicle.

So, if you're stuck between the two, this blog will help you determine which one best fits your lifestyle. By the end, you'll have a clear understanding of how gas and hybrid cars compare in terms of things like fuel economy, maintenance, environmental impact, and overall cost.

Cost of hybrid vehicle vs. gas car ownership in Canada

When shopping for a new vehicle in Canada, it’s important to look beyond the sticker price and think about the total cost of ownership. That includes everything from purchase price to fuel (or electricity) costs, maintenance, and even its long-term value.

To help give you a more visual idea of these costs, we’ll compare three popular options in Canada from the Toyota lineup: the RAV4 (gas), the RAV4 Hybrid, and the RAV4 Prime (plug-in hybrid). All three offer similar size, features, and styling, but differ significantly in how they’re powered and how much they cost to run. By comparing these three vehicles, we’ll be able to show you how gas and hybrid vehicles compare in overall cost. Here are the differences:

Purchase price

If you're deciding between gas and hybrid vehicles, cost is likely one of your top concerns. Generally, hybrid models cost more upfront than their gas-powered counterparts. Take the 2025 Toyota RAV4 lineup, for example, with starting prices listed as:

• The RAV4 LE (gas) starts at around $33,555

• The RAV4 LE Hybrid starts at approximately $36,505

• The RAV4 SE Prime (a plug-in hybrid) starts at about $51,715

Fuel (and electricity) costs

Hybrid and plug-in hybrid vehicles can offer major fuel savings compared to traditional gas vehicles, especially if you spend a lot of time on the road. This is because hybrids are known for being more fuel-efficient vehicles.

Let’s break it down using the 2025 Toyota RAV4 lineup base models as examples. We'll assume 20,000 kilometres (km) of driving per year, and use $1.332 for the fuel cost, which was the average cost of fuel in Toronto (Ontario) in April 2025, according to Statistics Canada. We'll also use Hydro One’s Ontario time-of-use rates for the RAV4 Prime.

Note: These estimates are based on average energy consumption and fuel prices in Ontario as of June 2025. Your actual costs will vary depending on your driving habits, local fuel and electricity rates, and how often you drive using electric-only mode.

It's important to note that if you choose to drive a plug-in hybrid, like the RAV4 Prime, you'll likely want to install a Level 2 home charging station. According to Green Building Canada, this can cost anywhere from $700 to $2,500, depending on the setup. While that adds to your first-year cost, at least the long-term savings on fuel will help make up for it over time.

Maintenance costs

Gas-powered vehicles are generally more straightforward and less costly to service. They’ve been around for decades, so parts are widely available, and most mechanics are familiar with them. Routine services like oil changes, air filter replacements, and brake jobs are predictable and typically affordable.

Hybrid vehicles, on the other hand, are more complex under the hood. They have both a traditional gas engine and an electric drive system, which means more components that could need servicing over time. While regenerative braking helps reduce wear on the brakes, hybrids still need regular oil changes and other routine services. And if something goes wrong with the hybrid battery or electric motor, repairs can be more expensive, especially once the battery ages. Below we will discuss the real cost of a new battery—and when to replace it:

Battery replacement

Hybrid and electric car batteries are designed to last for several years, but if you need to replace one out of warranty, it could cost anywhere from $2,000 to $8,000 or more, depending on the make and model. So while hybrids can save you money on fuel, it’s a good idea to factor in the potential long-term maintenance costs as well.

Resale value considerations

When it comes time to trade in or sell your vehicle, resale value can make a big difference, and hybrids are starting to come out ahead. Thanks to growing interest in fuel-efficient and environmentally friendly vehicles, London Auto Valley notes that demand for used hybrids (and electric vehicles) is rising in Canada.

While gas-powered vehicles still hold decent resale value, they can depreciate faster as fuel prices rise or as more hybrid and electric models enter the market. On the other hand, hybrids tend to hold their value better, particularly if the battery is still in good condition and under warranty. That said, resale value can vary depending on the make, model, mileage, and overall condition of the vehicle.

Insurance costs and considerations for gas and hybrid vehicles

You may have noticed that one of the disadvantages of hybrid vehicles is that insurance premiums are often higher than premiums for a gas-only vehicle. On average, you can expect hybrid insurance premiums to be around 5% to 10% more expensive than coverage for traditional gas vehicles, mainly because hybrids tend to cost more to repair or replace than standard gas-powered cars.

Hybrids have more complex systems under the hood; they combine a gasoline engine with electric components, including a high-voltage battery. If those systems are damaged in an accident, repairs can be more expensive and may require specialized technicians, leading to a potentially more expensive insurance claim and a higher premium for collision coverage to cover it.

Further, because hybrids have a higher resale value and often use keyless entry and ignition systems, and car theft from relay attacks is a growing issue, according to CAA, some insurance companies consider them more attractive targets for theft. This increased theft rate, combined with a higher purchase price to replace it, can potentially lead to higher premiums for comprehensive coverage.

Gas-powered cars, on the other hand, are typically cheaper to fix as they have less complex systems, parts are often more widely available, and they don't require specialized technicians. That can help keep insurance rates a bit lower overall.

With all that said, many insurance companies in Canada offer discounts for eco-friendly vehicles, including hybrids, so it’s worth asking your provider if you qualify. To learn more about the difference in hybrid vs. gas car insurance premiums or to receive a free quote, reach out to BrokerLink.

The environmental impact of gas vs. hybrid vehicles

When you compare gas-powered cars with hybrids, the environmental differences extend far beyond fuel savings. Quick facts:

Tailpipe emissions

Tailpipe emissions refer to the gases and particles released from a vehicle’s exhaust system as a result of burning fuel in the engine. Gas-powered vehicles emit nitrogen oxides (NOₓ), particulate matter, carbon monoxide (CO), and volatile organic compounds, which are all harmful to air quality and human health.

But thanks to frequent electric driving and the regenerative braking system, tailpipe emissions are reduced in hybrids, especially when driving at lower speeds or in stop-and-go traffic. Plus, plug-in hybrids, when running only on electricity, have zero tailpipe emissions.

CO₂ emissions

Gas vehicles emit significantly more greenhouse gases, such as carbon dioxide (CO₂), during operation. According to TD Economics, their internal combustion engines convert only ~16–25% of fuel into motion (the rest is wasted), resulting in higher lifetime CO₂ emissions.

Hybrids, on the other hand, combine gasoline and electric power, reducing fuel use and CO₂ emissions when driving. In fact, according to the U.S. Department of Energy, on average, hybrid cars produce almost half the amount of CO₂ emissions as gasoline cars.

Battery production and carbon footprint

But while hybrid cars reduce tailpipe and CO₂ emissions while being driven, hybrid vehicles do carry a higher environmental cost up front than gas vehicles due to battery production.

Manufacturing the lithium-ion batteries used in hybrids requires extracting resources like lithium, nickel, and cobalt. These processes can be water-intensive and ecologically disruptive if not managed responsibly. However, Canada is making strides in regulating sustainable mining and battery recycling.

But despite that early impact, hybrids tend to make up for it quickly. One Canadian lifecycle study noted that manufacturing an EV results in around 2 tonnes more CO₂ than a gas car, but hybrids largely offset this over their lifespan through their improved fuel economy and lower operational emissions.

Who should choose which?

Not sure whether a gas or hybrid vehicle is the right fit for your lifestyle? Here’s a quick guide to help you decide:

Consider a hybrid if

• You do a lot of city driving with frequent stops and starts (great for regenerative braking)

• Fuel efficiency is a top priority, and you want to save money at the pump

• You’re environmentally conscious and want to reduce your carbon footprint without switching to a fully electric vehicle

• You're comfortable with a slightly higher upfront cost in exchange for lower fuel use over time

• You plan to keep your vehicle for several years and want to benefit from improved resale value

• You're driving in provinces offering rebates or tax incentives on hybrid models

Consider a gas vehicle if

• Your initial budget is tight, and you want the most affordable purchase price

• You live in a remote or rural area where access to hybrid repairs or parts may be limited

• You prefer simpler maintenance and want to avoid potential battery replacement costs

• You spend more time highway driving, where hybrid benefits like regenerative braking are less impactful

• Resale value isn’t a major concern

Contact BrokerLink for more insurance insights

For a more detailed comparison of hybrid versus gas cars or to receive a professional opinion on what insurance you need for your car, contact BrokerLink. BrokerLink is one of the leading insurance brokerages in Canada. We have helped Canadians find quality car insurance coverage for years.

Get in touch today to learn more about how you can find affordable, quality car insurance with help from a BrokerLink broker. You can reach us by phone, email, or in person at any one of our locations throughout Canada. No matter how you choose to get in touch, a BrokerLink insurance advisor will be happy to assist you. We also encourage you to take advantage of our free online quote tool that can provide you with a competitive quote in minutes.

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