Electric cars are now cheaper to insure than their petrol and diesel counterparts, analysis of the electric vehicle (EV) market has revealed.
EVs are now being priced more fairly as a rising number of insurers enter the electric car market, which means they no longer carry a hefty price tag when it comes to insurance.
Market analysis into what a typical driver can expect to pay for a 12-month policy, carried out by online car marketplace heycar, found that EV owners are increasingly getting favourable results.
For EV drivers, 2020 marked a “tipping point” as data from two of the largest price comparison sites now shows that EVs are now consistently cheaper to insure than their petrol and diesel counterparts. Examining annual insurance trend data from GoCompare, heycar found Nissan Leaf drivers paid on average £394 a year in 2020 while owners of the smaller and cheaper to buy Ford Fiesta were charged £550 for their yearly premiums across all petrol and diesel models.
This is compared to 2019, which saw Nissan Leaf drivers pay on average £424 for their yearly premiums, while drivers of the smaller Ford Fiesta paid £602.
This trend is echoed in data from MoneySuperMarket, with the electric Renault Zoe costing £451 to insure on average in Q2 2020. In comparison, a Vauxhall Corsa owner paid £776 – over 70% more than its electric rival. When it comes to luxury electric models, the Tesla Model 3 is the most expensive model to insure based on data from MoneySuperMarket. However, it also followed the downward price trend seen elsewhere – falling 16% from £1464 in 2019 to £1223 in 2020.
According to the Association of British Insurers (ABI), premiums for electric cars fell in 2020 because more insurers are entering the market to accommodate the growing number of EVs on the UK’s roads. Industry data from the Society of Motor Manufacturers & Traders (SMMT) shows a significant increase in the number of new electric vehicles being sold in the UK, with a year-on-year increase of 186% in 2020.
heycar CEO Mat Moakes said: “It is generally assumed that the insurance price for electric vehicles greatly exceeds the price of its diesel and petrol counterparts and it certainly used to be that way.
“But our analysis shows that it is now the opposite as more insurers enter the EV market, which helps bring the price down.
“The cost of electric cars is finally getting cheaper, which is great news for people who drive EVs – and those looking to make the switch – to cut their carbon footprint as they can now do that without footing a huge insurance bill.
“Last year was definitely a tipping point, with insurance premiums for electric cars falling significantly in 2020.”
In order to calculate premiums, insurers consider a number of factors – including the value of the vehicle, the ease of finding a professional qualified to repair the model, and the cost and availability of parts. Levels of theft of a particular vehicle in your local area are also taken into account.