Electric Car Insurance Up to 60% More Expensive Than ICE In UK

AUG 13 2018 BY MARK KANE 18

Electric car owners in UK are charged up to 60% more for insurance than in the case of comparable conventional gasoline cars.

According to the consumer website HonestJohn.co.uk, dearer insurance could be one of the causes that all-electric car sales in the UK decreased by over 3% during the first half of this year.

The advice is to add one more incentives in form of abolition of Insurance Premium Tax on pure electric cars.

“HonestJohn.co.uk is calling on the government to scrap Insurance Premium Tax (IPT) for electric vehicles after it emerged that some EVs cost as much as 60% more than their petrol-powered equivalents to insure.”

“High list prices, range anxiety and limited access to charging points have all been routinely blamed but the issue of highly charged insurance premiums has been quietly ignored.”

Why are BEVs more expensive to insure? Well, it must have something to do with the higher upfront price and loftier repair costs.

HonestJohn.co.uk Managing Editor, Dan Powell said:

“If the government is serious about getting more people into genuine zero-emission electric vehicles, rather than plug-in hybrids, then there needs to be decisive action. And the government itself holds the key. At present, it takes 12% off every motor insurance premium in IPT. If it removed IPT from pure electric vehicles, then premiums would instantly drop and this would improve the incentive for buyers to swap their diesel or petrol for pure electric.”

For example, insuring a 2015 Renault ZOE costs 60% more (£395) than a similarly priced and equipped 2015 Renault Clio (£247), according to the article.

We are not sure whether there should be a new incentive as there is a general Plug-In Car Grant already available (lowered from full £5,000 to £4,500 some time ago).

Renault ZOE

“HonestJohn.co.uk‘s analysis of the insurance market revealed that pure electric cars carry a hefty premium when it comes to comprehensive cover, with some models up to 60 per cent more expensive to insure than their petrol or diesel counterparts.

To make matters worse, it is young professionals – the target buyers for most EVs – being hardest hit, with some insurers demanding more than £1,800 for 12 months’ cover.

“While on the one hand electric vehicles tend to be smaller and less powerful, they also need specialist parts and skills to repair so may cost more to insure in some cases,” said a spokesperson for the Association of British Insurers. “But drivers can expect pressure on insurance premiums to reduce as the technology becomes more widespread”

After receiving complaints from HonestJohn.co.uk readers about the unaffordable cost of insurance for electric cars, the website analysed the market to see what a typical driver can expect to pay for comprehensive 12 month policy.

A test quote on similar models and car manufacturers from Confused.com found a female driver aged between 30 and 55 who had no motoring convictions showed that a petrol car with a comprehensive motor insurance policy was £567. Meanwhile it was £607 for a diesel car and £751 for an electric vehicle. Running the same quote for a male aged under 25 revealed that the average annual insurance policy would cost £1484 for a petrol car, £1592 for a diesel and a whopping £1854 for an electric vehicle.

Delve into the numbers at GoCompare for a professional in their 30s and the costs for insurance drop, but the price disparity grows. For example, a 35-year-old accountant living in a city with five years’ no claims can expect to pay £247 when it comes to insuring a 2015 Renault Clio petrol. A similar fully comprehensive quote for the same firm’s electric Zoe is £395 – 60 per cent higher than the Clio, despite the fact that both are similar priced and equipped.

“Until people actually live with electric cars, there’s a perception that owning one comes with a compromise,” added Dan Powell. “Many of these compromises have already been addressed – EVs have a good range, are quickly and easily charged and are getting cheaper to buy, but the government and insurance industries are doing the future of electromobility no favours at all, and this is something that requires immediate change.”

Typical Premiums for a used car*

Electric model Average premium Petrol model Average premium
Nissan LEAF £368 Nissan Micra £253
Renault Zoe £395 Renault Clio £247
Volkswagen E-Golf £388 Volkswagen Golf GTI £387

*Based on GoCompare average quotes on a 2015 car and a 35-year old accountant, living in Bristol, with five year’s NCB. Quotes obtained July 2018.”

Source: HonestJohn.co.uk

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18 Comments on "Electric Car Insurance Up to 60% More Expensive Than ICE In UK"

newest oldest most voted
offib

The UK I think should have bigger, more immediate priorities.

Avoiding a hard border with Ireland and northern Ireland is one. Avoiding brexit is another…

Chris

Completely irrelevant for this article whether true or not. The UK’s life doesn’t revolve around Brexit and certainly doesn’t make other policy decisions irrelevant. This is bad and does need addressing and is something that insurance companies are going to have to defend. Perception and fact are 2 different things, and ripping off the consumer (which this is) should have intervention.

SJC

Dismissing other comments is RUDE, get some manners.

james

But what about the exorbitant Irish green fees for golf courses! Oh wait, that isn’t relevant to this discussion either…

windbourne

LOL. Really?

Mister G

Ignorance ignorance ignorance everywhere about EV’s. It reminds of the tow truck driver that said a special tow truck is needed for electric vehicles LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS thanks co2.earth

Gazz

Bot

Mister G Jr.

Mister G is our boy.

dan

Actually, your tow truck driver IS correct. You do want a flat bed to tow most EVs, especially for a RWD or AWD EVs like all Teslas, BMW i3, etc. There is no manual transmission where the tow truck driver can remove the drive shaft from the drive wheels. You can fry the motor and the electronics by spinning it without power engaged. Remember that a motor is the same as a generator.

Adam

I don’t think it would be stretch to say that issue is two fold. First the EVs are new and the insurance companies don’t know how to properly evaluate the damage caused by an accident. Especially to critical systems like the battery and motor. Second EV’s are definitely have more performance off the line and they consider the cars more sporty. Look at the price difference between the E-Golf and the GTI.

Clarity

They should Jack up the rates on the Teslas and give us people in the slow cars a break. Jk trying out my trolling skills.

davb

I Got a quote for a Model S just to see how much it would be and to be honest, it was about three times more than my Leaf. As the decision for buying the Leaf was based on the overall running cost I did notice that it was a little bit more to insure than my last car, but this has been offset and then some by the savings in “fuel” costs.

Scott Franco

“Why are BEVs more expensive to insure? Well, it must have something to do with the higher upfront price and loftier repair costs.”

Last time I checked, car insurance does not pay for car repairs.

JC

Er… yeah it does – if you have comprehensive cover

Gazz

The cost of spare parts is proving to be a problem for EVs. For me %60 is another £600 thanks to living in Birmingham.

tekram

This article really doesn’t explain what the IPT is or how much or why. IPT is really just a VAT (value added tax) that generates cash for the UK Treasury. The VAT for insurance premium allows UK to collect a tax on the insurance premium for expensive items such as automobiles on a regular basis. The rate is now 12% from the original 2.5% in 1994.

nix

If this were in the US I’d say it smells like price fixing. I don’t know anything about UK insurance though, so I’ll leave it to others who do.

Casualsurfer

Not surprising. GEICO here in the States charges an arm and a leg for Tesla Model 3 vs similarly priced luxo vehicles. If you have their app, check it out.