Electric cars might be cheaper to charge than a petrol or diesel one is to fill up with fuel, but zero-emissions models might not be as cost effective as you think.
A comparison of average electric car insurance premium and those for an equivalent model with a traditional internal combustion engine shows the greener choice costs 14 per cent – or £116 – more to cover for a year.
According to Vantage Leasing, the two million motorists expected to own electric cars – which tend to be more expensive to purchase than traditional vehicles – by 2025 will be forking out a collective extra £231 million on insurance.
Plug-in premiums: New research claims an electric vehicle is 14% more expensive to insure than a like-for-like convention petrol or diesel model. That accounts to a £116 annual difference in premiums
With many predicting that the electric market will boom in the coming years – courtesy of the crackdown on diesel cars and ban on sale of combustion engine vehicles in Britain from 2040 – drivers could find the cost of making the switch pricier than they originally thought.
Vantage Leasing’s comparison of vehicle costs and average premiums estimated that a battery-powered vehicle is around 18 per cent more expensive to purchase than a like-for-like model with a petrol or diesel engine.
And while the average difference between cover costs was 14 per cent, electric vehicles can be over a third dearer to insure than an equivalent motor using fossil fuels.
When conducting the comparison of premiums, it used the example of a male, aged 35, living in Milton Keynes who is a married sales manager and had three points on their licence.
Quotes were based on a vehicle parked on driveway that was used for social and commuting, covering 12,000 miles per year with five years no claims.
It found that a £27,690 VW e-Golf would cost someone living in Milton Keynes £904 to insure.
A £27,000 1.5-litre TSI petrol VW Golf was quoted at £710 – a massive £194 difference.
You can see more examples of the premium breakdown for other like-for-like unleaded and diesel models in this table:
There’s almost a £200 difference in insurance costs between an electric VW e-Golf (left) and a petrol Golf (right), despite the two being similar in price, performance and size
Insurance quotes can be higher if you park your car in a garage overnight. For those with wallbox chargers in their garages, this could push the cost of EV premiums higher
Why are electric cars more expensive to insure?
Higher retail prices are partly to blame for higher premiums, while the cost of more specialised parts and a lack of mechanics with the necessary skills and training may mean servicing and repair bills are bigger.
There’s also the higher cost of damage caused in a crash, especially if it results in battery harm and shifts the packs that are located under the floor or near the back of the chassis.
The Institute of the Motor Industry (IMI) has been leading efforts to secure minimum training standards for technicians working at different levels on electric and hybrid vehicles, from basic maintenance to full diagnostic and repair.
It currently estimates that that more than eight in 10 independent garages are struggling to recruit technicians qualified to work on plug-in cars.
Electric cars tend to be more expensive to insure because of a range of factors: higher purchase prices, expensive parts and a shortage of qualified mechanics to work on them
Steve Nash, CEO at the IMI, said: ‘This will mean that the market will fail to open up and develop to the benefit of the UK economy, and without competition in the marketplace, the UK customer will suffer higher pricing.’
However, as electric cars become more mainstream and prices begin to decline and aftercare services become acclimatised with plug-in vehicles, premiums should – in theory – be no more expensive than they are for petrol and diesel models today.
And many will argue that the fact electric vehicles have fewer moving parts, there are fewer things to go wrong, meaning breakdowns and accidents caused by component failures are likely to be less common. This should also help to reduce insurance costs.
Source: This is Money
