Prior to buying your electric vehicle (EV) it’s common to worry about insurance.
You may be comparing the cost of insurance to your current petrol or diesel car, or this may be your first car and you have no idea about insurance at all.
You may wonder if insurance will be higher because electric vehicle technology is still relatively new.
Or if insurance will cost more because electric cars are becoming more desirable than traditional, Internal Combustion Engine (ICE) vehicles.
Read on to find out how much you might need to spend to insure your EV.
Everyone is different
Car insurance premiums are, helpfully, different for everyone, so generalising about them can be tricky.
However, car insurance is based on your:
- Your car
- Your address
- How securely your car is kept
- How you use your car
- Your claims history and no claims bonus
- Your excess
- The type of policy you choose
These factors are collated to create a risk factor, and this then informs your insurance premium price for that year.
So, a high-risk driver faces higher premiums and vice versa.
However, electric vehicle insurance is only marginally higher than that of a diesel or petrol car, so it shouldn’t put an end to your electric dreams.
A recent Nimblefins study has found the average price that a driver in their 30s with 5 years no claims discount could expect to pay for a range of popular models.
They found that drivers could expect to pay between £406- £1, 628, with an average price of £629 per year.
Graph from Nimblefins.
Reasons EV insurance costs more
For the foreseeable future, it will be slightly more expensive to insure an electric car compared to petrol or diesel vehicles.
This is predominantly because of the complexity of the battery technology, which increases the price of the electric vehicle.
As battery technology improves and becomes more affordable, this will likely become less of a factor. This should then in turn decrease insurance prices.
Other, more minor reasons for insurance price increases include:
- The newness and cost of electric vehicles.
Insuring a brand-new Lamborghini will always be more expensive than your 20-year-old Ford KA.
Similarly, insuring a 2020 EV will always be more expensive than insuring a 2020 ICE vehicle, because the outright cost of the vehicle is more.
- Electric cars are rarer.
This comparative rarity means that parts for electric cars are still harder to come by and there are fewer EV-specific, specialist mechanics that are suitably experienced in repairing electric vehicles.
As the number of EVs on the road increases, spare parts will become easier to find and more mechanics will train or retrain to focus on electric vehicles, so we can anticipate that this will also become less of a factor for insurance companies, depending on the make and model of your car.
Reduce costs by investing in an electric vehicle
The gap between the cost of insuring an electric vehicle compared to a petrol or diesel equivalent is closing every year, but for now, it’s still a bit more expensive to insure your new electric vehicle.
However, there are many more cost savings you can get from buying an electric vehicle that can more than make up the difference and save you more money in the long run.
Here are some of the things you should know about the cost savings involved with electric vehicles:
- Purely electric cars pay no road tax
This will save EV owners £165 per year compared to ICE vehicles, or £155 for owners of hybrid vehicles.
- Recharging is cheaper than filling up at the pump
Using a domestic EV charger instead of the three-pin plug will allow you to save money on charges as charging time will decrease and smart chargers can schedule charges to occur during cheaper tariffs.
Similarly, there are over 19,934 free, rapid chargers across the UK, which will allow you to recharge while doing your weekly shopping or indulging in some retail therapy.
Will the Government’s 2030 target bring electric car premiums down further?
With the government’s 2030 ban on new petrol and diesel cars approaching, we are likely to see rapid change and insurance prices will start to decrease as more drivers make the switch from petrol and diesel towards electric.
We’ve already seen a 1,699.5% increase in electric vehicles on the road since 2019, according to Next Green Car.
Contact Downtown Electrical to lower your EV charging costs.