Are electric cars cheaper to insure? 

Typically, electric car insurance costs more than petrol- or diesel-powered cars. However, thanks to tax incentives, going electric may still be more financially (and environmentally) beneficial. Electric cars also have much lower running costs, which can offset higher interest rates.

5 min read
Woman standing next to her electric car whilst it charges

How much does it cost to insure an electric car?  

Like with any other type of vehicle, there isn’t a magic number for how much it will cost you to insure your electric car. This is because electric car insurance can vary, depending on the type and how high-powered your car is. Insurers will also look at how at-risk they consider you to be as a driver, taking into account personal information and how many accidents you’ve had.  

However, electric cars are generally more expensive to insure than petrol and diesel cars. When they first came on the market, the prices were extremely high, largely because there was a lack of knowledge about them. Insurance is based on risk assessments, so this caused many insurers to refuse to provide cover at all. 

Although the cost of insuring an electric car is still higher, prices are slowly improving as this type of car becomes more commonplace. 

Why are electric cars more expensive to insure?  

There are several reasons why electric car insurance costs more: 

  • expensive technology – this is more expensive to repair than a standard car would be 
  • advanced equipment – again, the parts cost more to replace  
  • less data – a new vehicle on the market means that there is no data for insurers to go off, causing them to increase prices or refuse to provide insurance at all 
  • labour costs – there are fewer repair places with the knowledge on how to fix electric cars, so labour costs are more expensive than for petrol or diesel cars
  • less saturated market – since there are less insurers who cover electric cars, the market is less competitive, causing prices to rise
  • worries about battery failings – insurers might be concerned that the battery will fail, however, most manufacturers now cover this  

Note: While electric cars are still more expensive to insure, they may be cheaper to run – even when you take insurance into consideration.  

Also, more insurers are starting to provide insurance for electric cars (and at a cheaper price) as they become more commonplace and more data is available.  

Should I buy an electric car?  

There are loads of benefits to opting for an electric car, despite the high insurance rates. Some points you might want to consider are: 

Less likely to be stolen  

Electric cars are less likely to be stolen because of their limited mileage. Car thieves will typically drive a great distance with a stolen car before selling it on or breaking it down for parts – so that the car is less likely to be recognised. The limited milage on electric cars prevents them from doing this. 

Besides, charging them is complicated and there are a limited number of ports throughout the country.  

More environmentally friendly  

A massive advantage to getting an electric car is how environmentally friendly they are. Since they don’t have tailpipes, they emit no exhaust gases. A city full of electric cars would dramatically improve air quality for its inhabitants and have a positive impact on the environment.  

Very cheap to run 

Electric cars are much cheaper to run compared to petrol and diesel cars. Here are some examples of how: 

  • to drive 100 miles – a petrol or diesel car costs £11.05 on average, whereas an electric car costs less than £1.30.  
  • charging and petrol – petrol and diesel prices vary but charging your electric car at home can be a lot cheaper, especially if you have a charging port on your home energy tariff.  
  • warranties – most manufacturers have long warranties (including against battery failings), so you won’t have to pay out if anything fails.  
  • road tax – fully electric cars don’t have to pay road tax and some plug-in hybrids are eligible for a £10 annual discount.  

Discounts on congestion charges  

Some councils have introduced new ‘clean air zones’, and it’s likely that many more will follow. Essentially, you have to pay a fee for polluting these areas. This includes any vehicle driver, except for electric cars. For example, the Ultra-Low Emission Zone in London costs £12.50 per day for cars. You’d save over £4,500 annually by switching to electric! 

Enhanced driving experience   

You’re less likely to be seriously injured when driving an electric car because of the low centre of gravity, as well as the weight and distribution of the batteries. They also feed energy back into the battery by regenerative braking when you ease off the accelerator. Finally, they have high and responsive acceleration due to instant torque from the electric motor. 

Things to consider  

There are some drawbacks to getting an electric car, so make sure you consider these as well: 

Expensive to buy  

Despite the fact that they are becoming more common, electric cars will still set you back a fair few pounds. You have to buy them new, and they are expensive to manufacture, both of which contribute to the final price point. Add on the price of insurance and an electric car may simply not be in your price range. 

Lack of infrastructure  

While there are a lot of charging ports throughout most cities, there aren’t as many in the countryside. You’d have to be able to charge your electric car at home unless there was a charging port conveniently nearby. People without a drive or garage may struggle to charge their car frequently. 

Long-distance driving  

Most people don’t do a lot of long-distance driving unless they drive for work. But if you do, an electric car might not be the best choice for you. As mentioned above, there aren’t enough charging ports throughout the UK. You’d have to plan your route to charge your car. But this is changing very quickly, so may not be a problem in the near future. 

 

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