Electric vehicles have the distinct advantage of lower running costs, which helps to recoup the additional purchase price over time compared to an internal combustion engine vehicle – although this is not true for every model.
With around 20 moving parts in electric vehicles – compared to more than 2000 in a combustion engine car – this means that maintenance is often cheaper (less labor to check and replace) and there is less chance of something going wrong .
Despite this, battery-electric cars are often more expensive when it comes to fully comprehensive insurance than conventional petrol and diesel models. So why is this the case and what is the difference in premium costs?
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A NOTICE: Insurance premiums in this story are as of December 6, 2022 and are for guidance only. Rewards vary based on driving behavior, place of residence and more. |
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Why are electric cars more expensive to insure?
According to the Insurance Council of AustraliaEV insurance premiums are generally higher for a number of reasons listed below.
| Important premium factors for EV insurance |
|---|
| Expensive purchase price tag |
| New EV technology and parts like the motor and battery are more expensive to manufacture and replace |
| Building local supply chain of EV parts, resulting in higher import costs (exacerbated by semiconductor shortages) |
| Less trained EV technicians and service centers in Australia |
| Handling EV batteries requires specialized equipment and proper disposal methods (e.g. recycling). |
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How much does electric car insurance cost?
The comprehensive car insurance quotes in this guide are based on a 30 year old woman living in Sydney with the following attributes.
- garage address
- Clean 10-year driving record
- Bought the vehicle entirely in advance (instead of financing) for private use only
- The vehicle is painted white and has no factory or aftermarket modifications
- Drives 15,000 km per year (41 km per day) according to the Australian average.
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She cited a new annual comprehensive insurance plan with three providers – the state motoring association NRMA, the popular insurer Budget Direct and the budget-oriented offering Bingle.
Offers are based on an average deductible of $850 (except for Bingle, for which $895 is the closest possible option), with the vehicle insured at market value, with no optional extras (such as windshield and window covers, rental car cover, and new for old). replacement) and no promotional discounts included.
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MG ZS EV
The all-electric MG ZS EV Excite ($44,990 drive-away) is closely matched to its petrol-powered sibling ZST Excite ($30,990 drive-away) when it comes to comprehensively insuring this little SUV. By becoming electric, it is round 13 percent more expensive in insurance on average.
| 2022 MG ZS EV inspire | 2022 MG ZST Excite | |
|---|---|---|
| NRMA | $1779 | $1437 |
| household direct | $1841 | $1738 |
| bingle | $995 | $828 |
| Average annual premium | $1527 | $1324 |
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BYD Atto 3
The BYD Atto 3 Standard Range ($44,381 before road cost) is fast gaining traction as one of the most popular electric cars in Australia. However, the Toyota Corolla Cross in top-of-the-line Atmos Hybrid 2WD trim ($46,050 before road cost) is typically about 17 percent cheaper than insuring BYD’s electric crossover.
| 2022 BYD Atto 3 Standard range | 2022 Toyota Corolla Cross Atmos Hybrid 2WD | |
|---|---|---|
| NRMA | $1819 | $1607 |
| household direct | $2421 | $1763 |
| bingle | $1099 | $1065 |
| Average annual premium | $1764 | $1468 |
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Hyundai Kona electric
The Hyundai Kona Electric Elite with the smaller standard-range battery ($60,500) is based on the petrol-powered Kona Elite ($31,990) – both before road costs – and is on the market 25 percent more expensive to cover the battery electric model on average.
| 2022 Hyundai Kona Electric Elite Standard range | 2022 Hyundai Kona Elite 2WD | |
|---|---|---|
| NRMA | $1654 | $1011 |
| household direct | $1812 | $1606 |
| bingle | $1186 | $876 |
| Average annual premium | $1551 | $1164 |
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Tesla Model Y
The ubiquitous Tesla Model Y RWD ($72,300 pre-road costs) is comparable to the internal combustion Mercedes-Benz GLB200 ($67,000 pre-road costs) with a similar purchase price (the Benz is also offered at a more expensive all-electric EQB version). However, Tesla’s mean electric crossover is approximate 23 percent more expensive fully comprehensive insurance than the petrol-powered German luxury SUV.
| 2022 Tesla Model Y RWD | 2023 Mercedes Benz GLB200 | |
|---|---|---|
| NRMA | $2056 | $1517 |
| household direct | $2677 | $2543 |
| bingle | N / A* | $1401 |
| Average annual premium | $2367 | $1820 |
*The insurer does not cover Tesla vehicles
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Charge Volvo XC40
The base Volvo XC40 Recharge EV with 2WD Plus ($72,990) shares its bones with the comparable Ultimate B4 Bright trim gasoline mild-hybrid XC40 ($59,990) (both before road costs). While the insurance premium isn’t as high as some electric vehicles, the electric SUV is about 11 percent more expensive cover on average.
| 2023 Volvo XC40 Recharge Plus all-electric | 2023 Volvo XC40 Ultimate B4 Light | |
|---|---|---|
| NRMA | $2198 | $1597 |
| household direct | $2013 | $2070 |
| bingle | $1548 | $1450 |
| Average annual premium | $1920 | $1706 |
Electric cars are simply more expensive to insure today – typically 18 percent more for the models in this comparison.
However, as the EV market in Australia grows with more models available, lower prices, a greater local supply of parts and an increasing number of trained technicians, insurance costs are likely to come down.
It’s worth noting that the instant torque and quick acceleration times count towards EV insurance premiums, as some states don’t allow provisional license holders to drive a vehicle with a power-to-weight ratio in excess of 130 kilowatts per ton. This applies to models like the Tesla Model Y and Volvo XC40 Recharge EV in this list.
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Like all new technologies, electric vehicles are currently more expensive. But growing knowledge, increasing competition and general acceptance mean that costs will come down, including auto insurance.
For now, despite higher annual premiums and upfront purchase prices, EVs still have the edge when it comes to running and maintenance costs, especially when charging free solar power at home.
Those who drive more will more quickly offset and exceed the price premium for zero-emission tailpipes.
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