This paper presents a comparative study between the nonrare-earth PM and rare-earth PM-based coaxial magnetic gears. First, using finite-element analysis, the electromagnetic performances of four coaxial magnetic gears, which are installed with nonrare- or rare-earth PMs, are analyzed and quantitatively compared based on the same structure. Then, the natural magnetic properties of nonrare- and rare-earth PMs are evaluated and discussed. Finally, the cost effectiveness of coaxial magnetic gears adopting different types of PMs is assessed. The results show that the nonrare-earth PMs, especially the aluminum-nickel-cobalt, are preferred for application to coaxial magnetic gears with emphasis on the cost effectiveness.