Why do Teslas 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, any 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. As a luxury car, Teslas are pricier still.

Motortrend recently studied how much it would cost each year to insure the various Tesla models available. Among other factors, these averages assume the owner is a single 40-year-old man with a clean record and good credit score:

  • Tesla Model 3: $2,114-$2,351
  • Tesla Model S: $3,673-$4,143
  • Tesla Model Y: $2,118-$2,227
  • Tesla Model X: $3,355-$4,025

Of course, your rates will vary from insurer to insurer — which is why you should always compare quotes from multiple insurers.

How do other costs stack up?

Tesla Model S while plugged-in and charging at Supercharger.
JL IMAGES / Shutterstock.com

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.

Where do I go from here?

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

If you do purchase a Tesla or another 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 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.

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

Some studies show shopping around can save you up to $1,100 a year on auto 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.

About the Author

Sigrid Forberg

Sigrid Forberg

Staff Writer

Sigrid is a staff writer with MoneyWise. A graduate of Carleton University's journalism program, she spent the better part of the last six years writing about business and retail. In her spare time, she enjoys reading, baking and riding her bicycle.

`

You May Also Like

5 Identity Threats You’ve Never Heard Of — And How to Defend Against Them

Scammers have developed some truly ingenious ways to steal your cash and data.

Title Fraud Can Mean the Loss of Your Home — Here’s How To Protect Yourself

Prevent scammers from stealing your biggest assets and demolishing your credit.

Do Big Stores Save You the Most? We Price-Check Our Shopping List

With one 30-second trick, we found $460 in savings beyond Walmart and Amazon.

Here's How to Pay for That Perfect Patio Escape This Year

Don’t settle — with one move, you can make your staycation sensational.

`