Is Car Insurance Cheaper For Electric Cars?

Written by Zego

Published on

Is car insurance for electric cars cheaper? It’s a question we hear a lot. The simple answer is: not necessarily.

While electric vehicles (EVs) are often cheaper to run and maintain, insurance costs can sometimes be higher than that of petrol or diesel cars.

However, the gap is closing, and in some cases, insurance for EVs is becoming cheaper. Let’s take a closer look.

The complex world of electric car insurance

Electric cars are hailed as the future of transportation. They're eco-friendly, efficient, and increasingly affordable. But when it comes to insurance, are they really cheaper? The answer is a bit more complex.

Historically, electric cars have been more expensive to insure. This is primarily due to their higher purchase prices and the relative lack of data on them compared to internal combustion engine (ICE) cars. However, the tide is turning. As more data becomes available and as the electric car market grows, insurance costs for electric cars are starting to fall.

EV insurance data: A case study

According to a recent analysis by NimbleFins, the average cost of EV car insurance is around £654 for the most popular electric car models in the UK.

However, premiums are highly variable from one car to the next, with quotes ranging from around £400 to over £1,000 per year. This indicates that the insurance costs for electric vehicles are becoming more competitive.

So, what's the insurance bill for an electric car?

It's important to note that insurance companies consider a multitude of factors when determining car insurance prices, and the vehicle's fuel type is not always at the forefront. For instance, insurance costs may rise significantly if the driver is inexperienced.

The following is a snapshot of average annual insurance costs for some of the most popular EVs in the UK, from April to July 2021. This information was obtained from

  • Nissan Leaf 'Tekna' - Average Annual Premium: £421.76
  • MG ZS EV 'Exclusive' - Average Annual Premium: £459.12
  • Renault Zoe 'Dynamique Nav' - Average Annual Premium: £591.33
  • Tesla Model 3 Long Range AWD - Average Annual Premium: £1,160.35

Even though these electric vehicles are considered more 'budget-friendly,' they still hold a higher insurance cost compared to a majority of traditional vehicles. This is particularly true when the Government's Plug-in Car Grant is not factored into the equation.

Why are electric cars somtimes more expensive to insure?

One of the main reasons why electric cars are often more expensive to insure is the cost of the battery. Car batteries are still expensive to produce – demand is high, but large-scale production is still at an early stage.

There have also been issues with the limited availability and associated costs of certain metals used to produce batteries. However, as the price of batteries continues to decrease and as more mechanics become familiar with electric vehicles, the cost of insuring an electric car is expected to continue to fall.

If you’re in the process of choosing an electric car for private hire work, check out our guide to the best electric cars for Uber taxi drivers here.

Other things that contribute to lower insurance costs

Electric cars are generally less likely to be stolen due to factors like limited range, limited charging options, and onboard tracking technology. They also have a lower centre of gravity, which makes them less likely to roll in the event of a collision. These factors can contribute to a lower insurance risk, which tends to mean lower insurance costs.

What does this mean for you?

If you're considering an electric car, don't be put off by the potential insurance costs. While they may be higher in some cases, the gap is closing. Plus, the other benefits of electric cars – such as lower running costs, environmental impact, and potential government incentives – often outweigh the slightly higher insurance premiums.

The future of electric car insurance

While electric car insurance isn't necessarily cheaper at the moment, the trend is moving in that direction. As the electric car market continues to grow and mature, it's likely that insurance costs will continue to fall, making electric cars an even more attractive option for all drivers.

Remember, insurance is just one factor to consider when choosing a car. Before deciding on which car to buy, it pays to consider other things like the overall cost of ownership, reliability, comfort, environmental impact, and the joy of driving.

Frequently asked questions

Are electric cars cheaper or more expensive to insure?

While electric vehicles (EVs) are often cheaper to run and maintain, insurance costs can sometimes be higher than their petrol or diesel counterparts. However, the gap is closing, and in some cases insurance policies for EVs are becoming cheaper.

Is it cheaper to run an electric car or petrol?

Historically, charging an electric car has been cheaper than filling up with conventional fuel, especially with the rising costs of diesel and petrol. This means over the course of electric vehicle ownership, you could save yourself a lot of money in running costs.

Are EVs still cheaper to run?

For many years, electric cars have been considered cheaper to run than petrol and diesel cars. However, since mid-2022 this statistic has been up for debate, mostly due to the increase in energy costs as well as taxation on public charging.

Is it cheaper to run a petrol or electric car in the UK?

If you're thinking of driving an electric car, the upfront or monthly leasing cost can be higher than an equivalent petrol or diesel model. However, in most other regards an electric vehicle (EV) will be cheaper to run, which potentially adds up to large savings over time.

Why is Tesla car insurance so expensive in the UK?

As Teslas are a luxury electric vehicle, they can generally be more expensive to insure than competing vehicles. This is because of the cost of their technology and parts, which makes them more expensive to repair or replace following a collision.

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