Electric vehicles (EVs) are gaining in popularity as time goes on. Considering most automakers are promising to be mostly electrified by 2025, the interest in EVs will likely grow even more over time. However, there’s more to EVs than just their proposed range, performance, and futuristic aesthetics.
Buyers also need to consider other factors when owning an electric car like the insurance premium associated with it when weighing the pros and cons. But which type of vehicle commands a higher insurance premium; gas or electric?
Electric vehicle versus gasoline vehicle insurance premiums
Since insurance premiums are often overlooked by buyers during the beginning stages of buying a car, Money Geek conducted a study to do some of the leg work for them. As a result, they found that electric vehicles carry a higher premium over their gasoline counterparts – by as much $1,300 to over $3,500 per year.
According to Car and Driver, a few of the reason that electric vehicles cost more to insure is due to the fact that they cost more than their gas counterparts, are more expensive to repair, and they are more vulnerable to damage in accidents. If you don’t believe it, then you can read about the Tesla Model 3 that incurred over $27,000 worth of damage from a simple fender bender.
Which EVs cost more to insure?
Take a look at the list of electric vehicles currently in the market and you’ll realize that most of them are made by luxury automakers. In that case, it’s no surprise that Porsche Taycan topped Money Geek’s list of annual EV insurance premiums. According to their results, the Taycan commands an average premium of $3,567 per year, which is more than 1.5 times the average annual cost of car insurance, reported the financial website.
As you can imagine, the following three spots were taken by Tesla models. Here is a breakdown of Money Geek’s list:
- Porsche Taycan – $3,567 (annual premium)
- Tesla Model S – $3,022
- Tesla Model X – $2,885
- Tesla Model Y – $1,901
- Audi E-Tron – $1,893
- Volvo XC40 Recharge – $1,886
- Tesla Model 3 – $1,885
- Ford Mustang Mach-E – $1,784
- BMW i3 – $1,700
- Volkswagen ID.4 – $1,679
How do insurance premiums for EVs and gas vehicles compare?
Now that we can see how much of a premium electric vehicles command, you might be wondering how they compare to their gasoline counterparts. Fortunately, Money Geek put together this handy table for comparison:
Insurance for electric vehicles might be high, but they save you money in other ways
While the insurance premiums for electric vehicles are elevated across the board, EVs can save you a lot of money in other ways. For starters, electricity costs less than gasoline in general. Although, electricity costs can vary from state to state.
Second, EVs have lower maintenance costs. Since they have fewer mechanical parts than their gas-powered counterparts, EVs are typically cheaper to maintain. AAA notes that EV maintenance costs an average of $330 less than gas-powered cars.
Lastly, some electric vehicles can qualify for federal tax credits and rebates during the time of purchase. An electric vehicle can also save you money when it comes to emissions as they don’t require emissions testing. Additionally, you can drive sans passengers in the high-occupancy vehicle lane on the highway if you’re in an EV.
While electric vehicles carry a higher annual insurance premium over their gas counterparts, that doesn’t mean you should count them out. There are plenty of other ways to save money by driving an EV, despite the high insurance rates.