Electric vehicles (EVs), hybrid cars, and other electric vehicles are becoming increasingly popular as a result of increased automobile competition.
This competition has given buyers more choices than ever. As more companies have entered the market, the prices of smaller EVs continue to fall. This has made high-end electric vehicles accessible to a wider buyer base.
As the EV market grows, so does the number of government tax credits.
Although there are many benefits to buying an electric vehicle, owners are often shocked by the cost of insurance compared to another model with similar specifications and features.
In order to get the best deal on auto insurance for an electric vehicle, you will want to take into consideration several factors. We'll give you the essentials in this article if you are thinking about buying a hybrid or electric vehicle.
Why is electric car insurance so expensive?
Insurance coverage is usually the same for gas and electric cars. It may surprise you to learn that auto insurance rates for electric vehicles are higher than those of regular cars.
Bankrate data shows that the average annual cost of car insurance in the United States is $2,014 with full coverage and $622 with minimum coverage. Insurance costs vary depending on your location, driving history, age and type of vehicle.
Insurance for electric vehicles is more expensive because of:
Electric and hybrid vehicles are typically slightly more expensive than gas-powered cars. The main reason for this is the use of electric components, such as lithium-ion batteries and advanced software and hardware.
Electric car parts and repairs: The high number of parts and repairs that are required for electric cars can also increase the price of insurance. Even though the number of EVs is increasing, not every mechanic has the skills or parts to repair an EV if it breaks down or gets into an accident.
In general, it is understandable why higher-priced cars may cost more to cover because their repair costs are more expensive. Electric and hybrid vehicles that have a lot of technology such as the battery pack can be more expensive to repair or cover.
Insurance for EV models is more expensive than other types of cars. This is due to the high cost of repairing or maintaining a luxury electric vehicle.
This means that insurance companies are going to increase the cost of coverage in the case of an accident involving a hybrid or electric vehicle. Policyholders may end up paying more than they would for gas-powered vehicles.
It's always important to review all of your insurance policies. This includes auto, home, health, and life. You will know exactly what you're paying for if you keep your policies current. If you make any changes to your lifestyle, you should inform your insurance provider.
What is the average cost of electric car insurance in Australia?
The cost of vehicle insurance can be affected by a number of factors, including the type of vehicle, the age of the driver, the location of the home, the use of the car, the frequency of usage, and even the place where the car is parked at night or during the day.
Insurance companies also take into account these factors when quoting you on an electric car or hybrid. However, as we have already mentioned, high-end technology and specialized mechanics can increase liability, leading to higher premiums.
For gas-powered cars, the national average ranges between $2,014 (full coverage) and $622 (basic coverage). Insurance prices in some states are significantly lower than the national average. These include Maine (-44%), Ohio (41%), Vermont (39%), Idaho (38%), and Virginia (30%).
According to ValuePenguin's recent data, the insurance cost for luxury electric and hybrid cars can range between $2,152 and $4,725.
Insurance coverage for the Hyundai Kona SUV starts at $2,152. The Porsche Taycan electric sports car is the most costly at $4,725.
Model Y, Model 3 and Model Y, two of the most popular and widely-available Tesla models, are all priced above the average $3,012 at $3,215 each and $3,278 respectively.
Recent data shows that American motorists spend on average 2.93% of their annual income for auto insurance. In recent years, the cost of car insurance has increased significantly at the state level due to the pandemic and high inflation.
What auto insurers offer the cheapest EV coverage?
You have a variety of options when it comes to choosing a car insurance policy for your new hybrid or electric car.
According to industry data, the six most affordable electric car companies are:
Tesla Insurance: $1.899
These providers offer a range of insurance premiums depending on where you live, the amount your car is used and even your driving history.
Consider the increase in insurance premiums each year. Some companies will lower their insurance costs by having lower deductibles, or they may increase them based on the model, technology upgrades, overall condition of battery pack and total cost to replace a damaged one.
The cost of replacing a battery in an EV ranges from $9,180 to $11,475, the lowest being between $3,000 and 4,500 for a Nissan Leaf, and the highest costing about $47,000 for a Ford F-150 Lighting.
According to the National Automobile Dealers Association, the cost to replace an engine on a gas powered car can range from $2,500 to $4,000. It could even go up to $10,000. This will depend on engine specs, parts availability and labor costs.
These are a few things to consider before purchasing an electric or hybrid car. Electric cars are a great solution for the automotive industry. However, the cost to maintain and care these vehicles is higher.
What are the ways to save on electric vehicle insurance policies?
There are a few things that you can do to get your insurance premiums for your electric vehicle lower.
Compare quotes from different providers before you sign up for insurance with your existing auto insurance company. Shop around and compare quotes from three to five insurance companies.
Compare the different options available to you. You may find that the insurance prices are similar and only vary by a few dollars.
Get special offers and discounts
Some insurance providers offer discounts to new car buyers. Older drivers who may not use their electric car as often as younger owners might have several options available.
Some companies offer special discounts to retired veterans and even products for families. This can help reduce costs.
Consider alternatives possibilities
You can also ask your insurance company to charge you per mile. This allows you to pay less for the monthly rate and pay more per mile. This option may not be available from all insurance companies, and drivers must log their monthly mileage.
Electronic devices that can be connected to a vehicle will automatically track the distances covered. Your insurance provider can use this information to calculate your total mileage.
Insurance deductibles can be increased
You may be able to adjust your deductible amount, which is the amount that you must pay up front before you receive a payout after you have made a claim.
You can lower your monthly premiums by increasing your deductible, but you'll have to pay more if you need to make a claim.
Tax deductions are available to you
Several state and federally improved programs offer EV owners tax credits or rebates.
The Inflation Reduction Act is one of the most popular federal programs. It offers tax credits up to $7500 for EV buyers who purchase certain electric cars and SUVs.
California Clean Vehicle Rebate Project is another example. This project offers rebates of up to $4,000 to Californians who purchase or own a battery-electric or electric vehicle.
Check to see if there are any rebate or tax-deductible programs in your state for electric vehicles. Also, you can find out if the electric vehicle that you are looking to purchase qualifies for other federal tax programs.
Electric vehicles are a great way to reduce your carbon footprint, become more energy-independent, and possibly reduce the need for fossil fuels over the long run.
Insuring your electric or hybrid vehicle can be expensive, especially if you consider that the premiums for EVs are higher than those of regular gas-powered vehicles.
In the short term, it may be cheaper to own or purchase an EV due to the advanced technology needed to operate and maintain an electric vehicle, as well as the limited number of mechanics with the necessary knowledge.
The cost of auto insurance for EVs can be reduced in the future, when more commercial vehicles are adopted.
Before making the switch to an electric vehicle, it is important to consider any additional costs that you might incur.