If you’re planning to insure an electric vehicle, there are some important financial considerations to weigh before shifting your plans into higher gear.

What’s going on with electric cars?

Close up of a electric car charger with female silhouette in the background, entering the home door and locking car
husjur02 / Shutterstock

Electric vehicles, or EVs, which are powered by battery packs rather than combustion engines, have been around a lot longer than you may think.

The first electric vehicle was developed back in 1832, but it was another 40 years before auto makers came up with a practical design.

Between technological developments and increased social interest, the popularity of this sustainable alternative has spiked over the last decade as electric cars have become more affordable and more able to travel long distances between charges.

And it’s only been over the last few years that owning an electric car has become accessible to the average consumer. Companies like Volkswagen, Nissan, Chevrolet, Ford, Hyundai, Kia and of course Tesla produce electric vehicles that retail between $32,000 and $43,000.

Get the right coverage for all your vehicles and pay less. Compare quotes in minutes with Pretected.

Get a Quote

Do EVs cost more to insure?

two men up close, holding a clipboard and pen, two cars in the background
mojo cp / Shutterstock

While you’re going to save about $250 a month on gas, an electric vehicle will generally cost you more to insure.

Why is that? Car insurance companies come up with rates based on a whole range of factors. So even if you have a spotless driving record, live in a low-crime area and take advantage of some driving discounts, your rate is still likely to go up compared to your gas-powered car.

That’s because electric vehicles cost more outright and are more expensive to repair. The insurance company may deem you low risk to file a claim, but if anything happens to your car, it’s going to mean costly repairs. So your premiums will be set high to reflect that risk.

If your premium with a gas-powered car is $1,000 a year, you’ll probably pay between $1,180 to $1,320 with an electric car, according to ValuePenguin. But, as always, your rates will vary from insurer to insurer.

How do other costs stack up?

Mechanic in blue uniform lying down and working under car at auto service garage
Twinsterphoto / Shutterstock

Most electric cars generally cost more to buy than standard vehicles. And when they’re damaged, you may have a harder time finding a mechanic qualified to repair them — in addition to requiring more expensive and difficult-to-source parts.

Damaged batteries can add to your repair costs as well. If your battery’s leaking, your mechanic will have to take extra precautionary measures, which will be reflected in your bill.

There’s also the need for a charging station. You should expect to have to pay somewhere in the range of $200 to $1,000 to install your own charging station before you hit the road.

Nevertheless, you can expect your new car to incur lower maintenance expenses overall.

Cutting out tailpipe emissions protects both the environment and your car’s interior as you won’t have those chemicals seeping in. And electric cars also don’t need frequent oil changes or replacement radiator hoses, fan belts or gaskets.

So even with slightly higher insurance, your car budget shouldn’t have to change drastically.

Find an affordable life insurance policy to keep your loved ones protected. Get a free quote from Quotacy in under five minutes.

Get a Quote

Where do I go from here?

Father with son and dog look from the car window
Soloviova Liudmyla / Shutterstock

Some states, like California, offer rebates to electric car owners that can also help offset additional costs. And the federal government offers a tax credit of up to $7,500 for some electric vehicles.

If you do purchase an EV and begin the process of switching over your insurance policy, don’t forget to ask your insurer if there are any promotions or discounts you can take advantage of to lower your costs.

You may be able to bundle your other insurance policies, like home insurance or life insurance.

Insurance companies often give discounts to safe drivers with clean records. Don’t be afraid to ask in case you’ve missed something in your own research.

Over the year, you could see some significant savings in other ways through switching to an electric car. Running a gas-powered car costs about $3,356 a year, compared to $2,722 for an electric car, according to a study from Self Financial.

But your best option to find savings when you’re looking for car insurance is to shop around for rates. Experts like the Insurance Information Institute will recommend you seek out at least three quotes before settling on an offer.

Shopping around can save you up to $1,100 a year on insurance.

With that done, you’ll feel all the power of sitting in the driver’s seat even when you’re not behind the wheel.

Compare car insurance and save up to $500 a year

If you haven't compared car insurance recently, you're probably paying too much for your policy. Getting quotes from multiple insurers used to be time-consuming, but today's technology makes it easy.

Using a free site like Pretected is easy and could help you save up to $500 a year on car insurance. In mintues, their "smart matching" system will provide tailor-made quotes from insurers that can meet all of your coverage needs - and your budget.

Stay protected on the road and find more affordable car insurance in minutes with Pretected.

What to Read Next

Disclaimer

The content provided on MoneyWise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.