Is Car Insurance for Electric Vehicles More Expensive?
Find out if you’re getting ripped off on your car insurance in less than two minutes.
No long forms · No spam · No fees
A lot of people are considering buying electric vehicles these days. They look at the rising cost of gas and think it would be a good way to save money in the long run. However, they don’t always factor in the cost of car insurance.
This can change the price of operating a car by a lot. Fortunately, someone has compared the insurance costs of electric vehicles to gas-powered vehicles and reported their results.
Most electric vehicles are a little more expensive to insure.
The gas-fueled vs electric vehicle study
MoneyGeek.com picked several electric cars and gas-fueled vehicles. It then compared the insurance costs of the electric vehicles to the insurance costs of the gas-fueled cars.
They were careful to compare models of the same make and size. Even with that caveat, electric cars were always more expensive to insure.
It didn’t always cost a lot more. The cost difference varied a lot by make.
For instance, the Ford Mustang Mach-E cost 8.87% more to insure than the gas-powered Mustang coupe. On the other hand, the Volvo XC40 Recharge cost 40.82% more to insure than the Volvo XC40.
The price increase wasn’t normally very steep, either. The Hyundai Kona Electric was only 10.18% more to insure than the gas-powered Hyundai Kona. It cost only 6.5% more to insure a Mini Cooper SE than a gas-powered Mini Cooper.
The average increase in price, in fact, was 15%. Some cars, such as the Kia Soul EV and Audi e-Tron, almost matched that average. The Kia Soul EV was 16.26% more to insure than its counterpart, and the Audi e-Tron was only 17.11% more to insure.
Why electric vehicles are more expensive to insure
Most of that price difference comes from the initial cost of the car. Cox Automotive reported that the average price for an electric car was $49,766, which is $7,000 more than the industry average.
It’s hard to make direct comparisons, though. According to autotrader.com, electric cars often come with higher-end features in addition to being powered by electricity.
For instance, the Volvo XC40 Recharge comes with all-wheel drive and other luxury features. The same size gas-powered Volvo only has them if you get a higher trim level.
In fairness, even when you compare an electric car to a gas-powered car of a higher trim level, the electric car is still normally more expensive. The higher trim Volvo XC40 is $42,045, but the XC40 Recharge is $55,085.
Your insurance company doesn’t worry about why the car is expensive. It only factors in the base price when deciding on the premium.
When can your electric vehicle expect cheaper insurance?
Electric cars have come a long way since their inception. More models are being designed, and those models are getting better.
This means that prices for electric cars are already dropping, and that will bring the cost of insurance down with it.
That still doesn’t make electric cars cheap. There are a few things that could bring the price down even further. Manufacturers could start making models with lower trims, and they could decide to start cranking out a lot of them.
Insurance companies might also start offering discounts to people who drive electric vehicles.
It might be hard to find all the discounts on your own though, and, for right now, your best bet for cheap car insurance if you own an electric car is to price shop.
Fortunately, you can get Jerry to do the comparison shopping for you. The app compares quotes from up to 45 different insurance companies for you in under a minute, without any long forms to fill out.