Money Expert > Are Electric Cars Cheaper to Insure?

Are Electric Cars Cheaper to Insure?

Last updated: 05/09/2023 | Estimated Reading Time: 6 minutes

While electric cars can be cheaper to run than their fuel-powered counterparts, they aren’t necessarily cheaper to insure. However, there are many different factors that contribute towards the cost of electric car insurance, meaning it is possible to keep your premiums at a lower level. In this guide, we’ll explore the cost of electric car insurance, helping you to understand why your policy might be costing you more and how you may be able to make some savings.

In This Guide:

Is Electric Car Insurance Cheaper?

In general, electric car insurance is more expensive than insurance for fuel-powered vehicles. For many electric car drivers, this additional cost is well worth the environmental benefits and savings they gain by running an electric car instead of one that runs on petrol or diesel. However, a higher insurance quote may make some new electric car owners feel confused – why are they paying more to insure a car of a similar value just because it’s electric?

Why are Electric Cars More Expensive to Insure?

Electric cars are more expensive to insure for a variety of reasons, but one of the main ones is because they have more expensive parts that are not always readily available. Fuel-powered cars have been around a long time, meaning that there are a lot of different manufacturers that make parts for all kinds of makes and models. Electric cars, on the other hand, still make up a minority of the cars on the road, so when you need a replacement part, you have fewer places to turn to. Similarly, there are fewer mechanics specialising in electric cars than in traditional fuel-powered vehicles, which can result in higher repair costs as well.

But it’s not all bad news – the cost of insuring electric cars has decreased over the years as more people begin to use them. This means that over time, electric and fuel-powered cars may cost virtually the same amount to insure.

How Are Electric Car Insurance Premiums Calculated?

Electric vehicle insurance premiums are calculated in much the same way as their petrol and diesel counterparts. While these factors will vary slightly amongst providers, most electric car insurance companies will consider the following factors when calculating your monthly costs:

  • Your age and the length of time you’ve been driving
  • Your occupation
  • The area you live in and whether your car is stored on a driveway or in a garage
  • Your driving history and whether you’ve committed any motoring offences
  • How often you will need to use your car and for what purpose
  • The number of miles you will drive each year
  • Your car’s value as well as its make and model

Some of these factors will be out of your control and may increase the cost of your car insurance more than you’d like. However, that doesn’t mean there aren’t ways you can keep your electric car insurance premiums at a more affordable level.

Reducing Your Electric Car Insurance Costs

If your electric car insurance is proving to be more than you can afford, there are certain things you can do to bring down your costs.

Choose a Higher Excess

Your car insurance excess is the amount of money you have to pay to make a claim. This amount will be deducted from your final payout, so choosing a higher excess will mean receiving less money if you’re ever in an accident or your car is stolen. Having a high excess can lower your monthly costs, but you have to weigh up the negatives of potentially losing out further down the line.

Take an Advanced Driving Lessons

If you’re a young person or a new driver, car insurance companies will see you as a bigger liability no matter the type of vehicle you own. To try and bring down your premiums, you could consider taking advanced driving lessons to prove you’re a safe and responsible driver.

Have a Black Box Fitted

A black box can significantly reduce your car insurance premiums, but you have to be willing to stick to the rules outlined in your policy to reap the benefits. A black box will monitor your driving to make sure you’re not speeding or using your car after an agreed-upon time. If you’re happy to drive carefully and don’t need to use your car for long journeys, a black box could work well for you.

Improve Your Security

Some electric vehicles may be targeted by thieves, making them more expensive to insure. By taking some extra safety precautions, such as installing GPS tracking or an immobiliser in your car, you could show your insurer that your car is less likely to be stolen. Parking your car in a garage instead of outside your home can also deter thieves, so if this is an option for you, consider changing your habits and informing your insurance provider.

Mainstream vs Bespoke Electric Car Insurers

In the past, electric car owners would have to seek out bespoke electric car insurers to find a policy to suit their needs. These days, more and more mainstream car insurance companies offer electric vehicle insurance as well in order to stay competitive, but are you better off choosing specialist cover or a more general provider?

There’s really no right answer to this question, which is why it’s always best to compare electric car insurance policies from a wide range of providers before settling on one. Some bespoke insurers may be able to offer highly specialised cover, but it could come at an extra cost. Mainstream providers, on the other hand, may have blanket policies that cost less, but aren’t always as customisable.

It’s really important to weigh up your options carefully and find a policy that works for your unique needs. Car insurers have all kinds of packages on offer for new customers, it’s just a matter of finding the right one.

What to Consider When Insuring an Electric Car

Electric cars may come with more considerations than petrol and diesel cars, especially when it comes to insurance. Not only do you need to think about insurance costs and how much repairs might set you back, but the insurance add-ons you might need as well.

Some common extras that electric vehicle owners often opt for include:

  • Charging Cable Cover: If you’re planning to charge your electric car while on longer journeys, your charging cables are more likely to get stolen or damaged than when you’re using them at home. Adding some extra cover to your car insurance policy can help you cover the cost of replacing them.
  • Battery Cover: Electric cars are fitted with lithium ion batteries, which are not only expensive to replace, but can be complicated to repair as well. However, your car battery is arguably the most essential part of your EV, meaning you can’t really afford for it to malfunction. Battery cover can be added to electric car insurance policies to help you protect your battery specifically.

Find the Right Electric Car Insurance for Your Needs

The electric car market is growing all the time, which means electric car insurance policies are always changing to meet the demand. Comparing car insurance is the best way to make sure you’ve found the right deal for your needs. Our team at Money Expert can help you to find quotes and begin your car insurance journey whether you’re a brand new electric car owner or are looking to switch from your current provider.

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