If you’re looking to insure an electric car, you might wonder what costs are associated with this environmentally friendly vehicle, especially when compared to a gasoline-powered car. Learn about the costs associated with electric vehicles and how you might take advantage of certain discounts.
What Is an Electric Car?
Unlike gasoline-powered vehicles, electric cars don’t rely on combustible engines. Instead, they use an electric motor that’s powered by a battery pack.
First invented in 1832 by Robert Anderson, the electric car has taken off in popularity. You can purchase many electric vehicles for less than $40,000, and some can travel more than 370 miles with a single charge. Installing a home charging station can set you back anywhere between $200 and $1000 but allows you to charge your vehicle at home and then hit the road.
Why Do People Buy Electric Cars?
Over the past decade, the popularity of electric vehicles has spiked. Many buy them to save money at the gas station, while others want to help the environment. Some of the more popular reasons include:
- Energy independence. Electric vehicles still need a charging station for the battery, but they no longer need gas stations. Installing a home charging station allows you to charge your vehicle and have it ready whenever you need it.
- Reduced environmental impact. These vehicles produce no tailpipe emissions, so you’re not polluting the air as much as you would with a gasoline-powered car.
- Lower inhaled emissions. Tailpipe emissions not only affect the environment but also contaminate your vehicle’s interior. With a conventional vehicle, emissions seep into the interior. The amount of emissions depends on the vehicle type and climate control system. Electric vehicles help you avoid these emissions.
- Reduced maintenance expenses. An electric vehicle doesn’t require regular oil changes or parts replacements such as radiator hoses, fan belts, and gaskets.
What Are the Insurance Costs for Electric Cars?
Electric cars usually have higher insurance rates than gasoline-powered vehicles. This is because they cost more, suffer damage more easily, and are more expensive to repair. According to Bankrate, here are the six-month premium costs of several electric vehicles:
- Audi E-Tron: $486.
- Chevy Spark: $471.
- Fiat 500: $750.
- Ford Focus: $617.
- Jaguar I-Pace: $775.
- Mitsubishi i-MiEV: $685.
- Nissan Leaf: $713.
- Tesla Model S: $775.
- Volkswagen E-Golf: $748.
According to ValuePenguin, if your premium with a gasoline-powered vehicle is $1000, you might pay anywhere from $1180 to $1320 annually with an electric vehicle. Not every insurance company increases its rates the same.
While owning an electric vehicle doesn’t necessarily make you a riskier driver, it does make you a greater liability, according to insurance companies. One of the main reasons is that electric cars are more expensive to purchase compared to conventional ones.
For instance, if you get into an accident with your Chevy Spark electric vehicle, it costs more to repair or replace than a gasoline-powered Spark. As a result, even if you’re not a risky driver, insuring the electric vehicle exposes the insurance company to higher costs than a gasoline-powered car.
As time passes and electric vehicles become more popular, the costs associated with repairing them might become less expensive. This might cause insurance rates to drop.
Insurance costs for electric vehicles are higher than for gasoline-fueled ones, and a study from Self Financial found that:
- Compared to their gas equivalents, electric vehicles cost approximately $442 more to insure.
- A gasoline-powered vehicle costs about $1232 to insure annually compared to $1674 for an electric vehicle.
- The cost of running a gasoline-powered vehicle in the United States is about $3356 annually, while the cost for electric vehicles is only $2722 annually.
- When adding the purchase price into the equation, it costs $7952 on average annually to operate a gasoline-powered vehicle, while the annual cost to operate an electric vehicle is $9406. That’s a difference of $1454.
Another factor to consider is that repairs on electric vehicles are higher primarily due to the availability of parts from the manufacturer.
How Can You Save When Insuring an Electric Car?
Although the prices of electric and hybrid vehicles have decreased over the years, they’re still expensive to purchase and insure. It’s smart to look for savings if possible, and you can save on insurance the same way conventional car owners can by avoiding traffic violations and accidents as well as maintaining a good credit score. Follow these steps to save additional money with your electric car:
- File your claims wisely. Almost every car insurance company will raise your rates once you file a claim. These claims stay active on your account for three years, but the rate increase varies by state.
- Look for discounts. These discounts might be small, but they can add up. Ask your current insurance company if it offers discounts you’re not taking advantage of. Some examples include discounts for good driving, several policies, alternative fuel, paperless, or paying your premium in full.
- Find tax credits. Electric vehicles might allow you to take advantage of incentives at the local, state, and federal levels. For instance, the California Clean Vehicle Rebate Program gives Californians up to $4500 in rebates if they purchase specific electric vehicles. The federal government offers up to $7500 in tax credits for certain electric vehicles.
- Compare insurance rates. Don’t let the fact that you’re insuring a hybrid or an electric vehicle deter you from shopping for insurance. Compare rates from several companies to make sure you’re getting the best price.
- Find companies that reward you. Certain insurance companies offer discounts specifically for people who drive electric or hybrid vehicles. The amount depends on the company, but premium reductions typically are around 5 percent for a six-month policy.
The costs associated with insuring an electric vehicle are typically higher compared to a conventional vehicle, but that doesn’t mean you can’t find ways to reduce the overall costs. By doing research either before or after you purchase the vehicle, you might be able to pocket some extra money.
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