Electric cars are well-known for being cheaper to run than a conventional petrol and diesel car, but one sticking point has always been insurance premiums for them.
In the past, they’ve traditionally been seen as more expensive to insure – given the complexities of their parts – but new research from Compare the Market shows this doesn’t seem to be the case, with EV premiums now undercutting those of a petrol and diesel car.
Data from the insurance comparison site shows that electric cars were £75 cheaper to insure in the first quarter of 2021, with the average annual premium standing at £566, down from the £641 seen during the final quarter of 2020. Compare the Market says the drop is ‘partly caused by the reduction in car insurance claims during national lockdowns’.
The average petrol and diesel car insurance premium was £611 in the first quarter of this year.
Electric car drivers could save further, though, by switching to the cheapest deal, with the average cheapest premium said to be £477.
Despite EV premiums now working out cheaper, the site said that insurance for battery-powered cars has ‘fluctuated significantly’ in the past couple of years, reaching a peak of £692 in December 2019 and a low of £550 in February 2021.
Dan Hutson, head of motor insurance at Compare the Market, said: “Drivers making the switch to greener vehicles will be glad that our research shows electric cars could bring significant financial as well as environmental benefits over time. If drivers are considering buying a new car, then an electric vehicle could be an appealing option considering the savings on insurance, fuel and tax.
“Generally, electric cars have fewer complex moving parts that can be damaged compared with a traditional engine, and battery packs are reasonably well protected in accidents, reducing the risk of replacement.
“Electric cars are typically less likely to be stolen and more likely to be recovered when they are, due to their limited range and because charging them is relatively time-consuming.”
May 5, 2021