A recent study has revealed that while the desire among drivers to switch to electric vehicles (EVs) is on the rise, high insurance costs are posing a significant hurdle. According to a survey conducted by Close Brothers Motor Finance, approximately two-thirds of UK motorists would consider choosing an EV as their next vehicle. Of those surveyed, almost half cited environmental friendliness as their primary motivation, while a third believed that EVs are more cost-effective to operate.
Unfortunately, the efforts of these environmentally-conscious drivers to combat climate change are not being rewarded in the insurance market. In fact, many EV owners are facing skyrocketing insurance premiums or even difficulties obtaining coverage. The average cost of comprehensive car insurance for petrol and diesel vehicles increased by 29% over the past year, reaching £824. However, insurance quotes for electric cars saw an even more significant surge, with prices rising by up to £959, a staggering 72% increase in the same period.
Insurers justify these exorbitant premiums by pointing to several factors. Firstly, EVs tend to have a higher purchasing cost compared to their traditional counterparts, which leads insurers to assume that repairing or replacing these vehicles will also be more expensive. In addition, EVs are equipped with advanced technology and parts, further driving up the cost of repairs in the event of an accident.
Insurers also associate higher risk with EVs due to their rapid acceleration capabilities. While this feature may be enticing for many drivers, it also increases the likelihood of accidents. According to Thatcham Research, a motor research group, claims for EVs are, on average, 25% higher than those for petrol or diesel vehicles. Moreover, the intricate and expensive battery systems in EVs often result in higher repair costs and more total write-offs.
There is also a shortage of skilled technicians qualified to repair EVs, further driving up claims costs. Although the number of EV-qualified mechanics in the UK has been steadily increasing, estimates suggest that by 2032, there could be a shortage of around 16,000 professionals in this field.
Despite these obstacles, experts believe that the price of EV insurance will eventually decline as more drivers make the switch to eco-friendly vehicles. As the market expands, insurers will be compelled to adjust their offerings, leading to more competitive pricing. In the meantime, drivers can explore options from major insurers, such as LV, who offer specific policies for EVs. Additionally, comparison websites like Compare the Market, Confused.com, GoCompare, and MoneySuperMarket can help drivers find the best insurance deals.
With insurance costs for EVs currently high, it is crucial for drivers to shop around and consider factors such as annual payment options, mileage limitations, and avoiding unnecessary add-ons that can increase premiums. By being proactive and informed, drivers can navigate the insurance landscape and contribute to a greener future on the roads.
Why is electric car insurance so expensive?
Electric car insurance tends to be more expensive due to several factors, including the higher cost of the vehicles themselves, the advanced technology and parts used in EVs, the higher risk of accidents due to faster acceleration, and the shortage of qualified technicians to repair EVs.
Will the cost of EV insurance decrease in the future?
Experts predict that as more drivers switch to EVs and the market expands, insurance costs for these vehicles will eventually come down. Insurers will be forced to adjust their offerings to remain competitive, leading to more affordable premiums.
How can I reduce my insurance costs for an EV?
To reduce insurance costs for your EV, you can shop around for the best deals from major insurers and specialist providers. Comparison websites can help you view multiple quotes at once. Additionally, consider paying annually instead of monthly, keeping your mileage in check, and avoiding unnecessary add-ons that can increase premiums.