The future of automobiles is all about renewable resources. According to Bloomberg New Energy Finance, by 2040 over 50% of vehicle sales around the world will come from electric vehicles. This is because driving an electric vehicle, as well as a hybrid car, is better for the environment. These type of vehicles put off fewer emissions and allow you to lessen your carbon footprint on the planet.
One unfortunate downside to owning a hybrid or electric car, however, is the cost. They’re more expensive than a standard vehicle to manufacture due to their specialized systems, and some insurance companies actually charge more for insurance on a hybrid or electric vehicles. To help offset these higher premiums, though, many insurance companies offer their customers a discount for driving them.
If you’re thinking of buying a hybrid or electric vehicle, here’s what you should know about the potential insurance discounts available to you.
How Does a Hybrid/Electric Vehicle Discount Work?
A hybrid/electric vehicle discount, also called a green vehicle discount by some insurance companies, gives you a slight discount on your auto insurance policy if you drive an environmentally friendly vehicle.
In addition, some companies believe that people who drive these cars tend to be more responsible, qualifying them for lower overall insurance rates.
Pros and Cons of Driving a Green Vehicle
Statistics support the notion that people who drive green vehicles tend to be in fewer car accidents. Maybe this is because drivers go slower to save on fuel consumption or that such vehicles top speed and acceleration are less than combustion-engine vehicles.
One downside to driving a hybrid/electric vehicle is the fact that if you do have an accident, the costs to repair it are on average $182 higher than repairs for a gas-powered vehicle.
Hybrids are also more likely to be involved in a collision with a bicycle or pedestrian, according to a report by the National Highway Traffic Safety Administration. This is mainly because of the quieter hybrid and electric engines, which sometimes keep people from hearing these vehicles.
How Much Can You Save With a Hybrid/Electric Vehicle Discount?
While it is awesome to reduce your impact on the environment and get discounts for doing so, only a handful of car insurance companies offer a hybrid/electric vehicle discount. So, check with your insurance company before opting for a policy.
Some of the insurance companies known to offer a green car discount include Allstate, Liberty Mutual, and Farmers. When you do go with one of these companies, expect to save on average 5% to 10% per policy period, although this depends upon the individual company.
Other Ways to Save Money When You Drive a Hybrid/Electric Vehicle
There are more ways to save when you own a hybrid or electrical vehicle than just on your car insurance. Some of the other ways you can save money by owning and driving a green car include:
Tax Credits: The federal government offers you a tax credit if you own an electric or hybrid vehicle. Called the Qualified Plug-In Electric Drive Vehicle Credit, the tax credit allows you to claim a credit equal to 10% of the vehicle’s purchase price with a maximum credit of $2,500.
Fuel Bill: A hybrid/electric vehicle uses from 30% to 60% less gasoline than a combustion engine vehicle. Some utility companies will even offer a lower cost to charge the vehicle during off-peak hours.
Maintenance Costs: Purely electric vehicles are also easier to maintain. Without all of the working parts of a combustion-engine vehicle, electric vehicles cost half as much to drive compared to a strictly gas-powered car.