Cost of electric car cover reverses £75 in three months: ‘Green’ motors are cheaper to insure than petrol or diesel models – but the gap has narrowed
- Electric car insurance has fallen by average of £75 in beginning of 2021
- This means they are cheaper to cover than petrol or diesel vehicles
- There are savings to be made on electric models such as no need to pay road tax
The cost of insurance for electric cars has reversed by an average of £75 in the first three months of 2021, meaning the vehicles are still cheaper to insure than petrol or diesel motors – but the gap as narrowed.
The average annual premium for electric vehicles has dropped to £566 in the first quarter, down from £641 in the previous three months, according to data from Compare the Market.
Now, electric vehicles are typically £45 cheaper to insure than petrol and diesel alternatives, although some electric cars can still be more expensive to insure than others.
However, this gap has narrowed substantially compared to the last three months of 2020, with petrol and diesel models seeing bigger falls in cost.
Electric cars are still cheaper to insure on average than petrol or diesel models, new data says
Over the past two years, the average cost of insurance for electric cars has fluctuated, reaching a peak of £692 in December 2019 and dropping to £550 in February 2021 before rising to £588 in March 2021 as travel curbs started to lift.
The fall in the cost of insurance was partly caused by the reduction in car insurance claims during national lockdowns, the comparison website says.
Travel restrictions also pushed down the cost of insurance for non-electric vehicles, which declined by £101 over the same period.
Car insurance premiums for electric cars are typically lower but savings can be made on road tax since it does not need to be paid on cars that do not emit carbon and cost less than £40,000.
Drivers can also receive a £2,500 grant from the Government when purchasing eligible electric vehicles with a price tag under £35,000.
In addition,savings can be made on the cost of fuel, one of the largest expenses for drivers of petrol and diesel cars.
On average, the cheapest annual premium for electric cars was £478 in the first few months of this year, significantly lower than those for petrol or diesel vehicles.
|Average Petrol and Diesel Car Premium||Average Electric Car Premium||Cheapest Electric Car Premium|
|Source: Compare the Market|
The cheapest annual premium for electric cars was £478 in the first few months of this year
Therefore, motorists are encouraged to use price comparison services to see if they can secure further savings by switching to the cheapest deal available.
If a driver switches to the cheapest premium for an electric car from the average premium on a regular vehicle, they could save £133, depending on their driving history and experience.
Electric cars have substantially grown in popularity in the last year, with March data from the Society of Motor Manufacturers and Traders indicating that sales of new battery-powered electric cars have increased by 74.1 per cent in the year to date – albeit from a low level.
These electric vehicles represented 7.5 per cent of all new car sales in this period, increasing from 3.8 per cent in the previous year.
Dan Hutson, head of motor insurance at Compare the Market, said: ‘Electric vehicles are rapidly growing in popularity ahead of the Government’s target to phase out new petrol and diesel cars by 2030.
‘The transition to electric vehicles will be vital in tackling climate change, but the higher upfront cost of these cars compared with traditional models has often been a deterrent for many motorists.’
Some experts believe electric cars can be a good option for those looking to become more environmentally friendly – and for those looking to save on their insurance.
Hutson added: ‘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.’
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