Are electric vehicles expensive to insure?

The UK is on course to ban all sales of petrol and diesel cars by 2030 and hybrid cars by 2035. Electric car sales rose by 186% in 2020 and there are now an estimated …

The UK is on course to ban all sales of petrol and diesel cars by 2030 and hybrid cars by 2035. Electric car sales rose by 186% in 2020 and there are now an estimated 300,000 electric vehicles on UK roads as well as a further 600,000 hybrids.

In November 2021, the government furthered their plans to boost the electric car revolution by announcing that from 2022 all new houses must be built with an electric car charging port. This is in addition to the government’s electric vehicle grant of up to £2,500 on purchases made on select vehicles. These new laws combined with the introduction and expansion of the Ultra-Low Emission Zone (ULEZ) charges in London signal a significant shift towards electric and green vehicle use in the UK.

One of the few criticisms levelled at electric cars is that they are generally more expensive to buy than their petrol or diesel counterparts. However, the money saved on fuel and taxes often makes back such losses in just a few years. But what about the insurance? With electric cars on average costing more than regular cars, does that mean electric cars are more expensive to insure?

We are going to take a look at electric car insurance and find out just how much they cost to insure.

Are electric vehicles expensive to insure?

Previously, electric vehicles were more expensive than diesel or petrol cars to insure. However, recent figures show that as electric vehicles become increasingly commonplace, insurance costs are falling as insurers are growing the data on how much repairs and replacements cost for different models.

The cost of car insurance is decided by many factors that go beyond whether the car is electric or not. Electric cars are still quite costly because they operate using large, expensive batteries. The cost of insuring an electric car is likely to be based on the price of the vehicle rather than its fuel consumption. And there are still many additional factors that contribute to the overall cost of insuring a car, many of which can be affected and reduced by the driver.

So let’s take a look at how the cost of electric car insurance compares with the costs of diesel and petrol.

Do electric cars cost more to insure than petrol or diesel cars?

Comparing the costs of electric car insurance with that of diesel or petrol is tricky as, by definition, they are different vehicles.

Some car manufacturers have electric versions of petrol cars that have different average insurance costs to the standard model. However, in some instances, the insurance for the electric version is cheaper and in others, it is more expensive.

Another way to compare the costs of the different vehicle insurance is to compare the average cost of insurance premiums overall. Of course, this measure takes into account many other variables, but it gives a good indication of what the relative prices are.

In 2021, the average electric car insurance cost £566 per annum, compared to £611 average for petrol and diesel. This represents a £45 cheaper difference in the cost of insuring electric cars. So, while electric cars do, on average, cost more to purchase than petrol or diesel, they are both cheaper to run and are increasingly cheaper to insure. Therefore, it doesn’t take long to save the extra money spent on an electric vehicle.

Is electric car insurance different to regular car insurance?

On the whole, there is no difference between electric car insurance and regular car insurance. There are still the options of third-party, third-party, fire and theft, or fully comprehensive, as well as the additional policy extras.

As with regular cars, electric cars legally must have third-party insurance at a minimum. Most mainstream insurance companies offer premiums on electric cars.

How do electric cars save money?

If you choose to buy an electric car, the UK government will subsidise your purchase by 35% up to a maximum of £2,500 for vehicles priced at £35,000 or less. This initiative was brought in to encourage the purchase of greener vehicles, though it is unlikely to stay as more and more people opt to buy electric cars.

You also don’t have to pay vehicle tax on most electric cars. However, you must apply for this tax exemption and can find out more about it on the government’s website.

Electric cars are also exempt from paying the London congestion charge of £17.50. So for commuters or drivers who frequently travel across the capital, there are significant savings to be made by opting to get an electric car.

And of course, there are the savings made on fuel costs. In 2021, a full tank of petrol for an average car costs upwards of £80 in the UK. The cost of charging an electric car up to full battery depends on where it is charged. In some public places, charging electric vehicles is free. To charge a battery full from your home port should cost around £9 to £10. Wherever you choose to charge your electric car, you can always be guaranteed that it will be cheaper than filling a tank of petrol.

How much do electric cars cost?

As with regular cars, the range in price of new electric cars is huge. At the top end of the list are hypercars such as the Aspark Owl, which cost an eye-watering £2.6million. At the lower end are cars like the Skoda CITIGOe iV, which will set you back around £15,000.

There is a growing number of affordable electric cars that sit comfortably below £30,000. There is also a handful of trusty, reliable electric car makers that have joined Skoda in selling electric vehicles for under £20,000.

How can you save money on your electric car insurance?

There are many factors that affect the price of your electric car insurance and making only a few adjustments can lead to significant overall savings. At A-Plan we will explore your options with you and advise you of any changes you could make to reduce your insurance costs as much as possible.

You can:

  • Build up a no claims discount. Having a no claims discount from previous vehicles – electric or regular – will save you significant amounts of money on your insurance.
  • Increase your excess.
  • Remove any optional extras you don’t need.
  • Keep your electric car secure. This can include locking it in a garage at night or installing a tracker device onto the vehicle.