Electric cars were once a futuristic concept. In recent years, they have been viewed as an increasingly more possible yet extravagant vehicle option.
But as with the popularity of hybrid vehicles, the actual possibility of owning an electric car is becoming a more serious consideration for the average American.
With Chevrolet and Nissan releasing all-electric cars, there are finally mainstream options for those who want to go completely green with their ride. IBM recently did a survey that found that almost 1 out of 5 Americans are likely to consider an electric vehicle when they make their next car purchase.
This may mean that electric cars are about to make a breakthrough in the world car market. With this breakthrough, can people expect lower car insurance rates to come standard with their electric cars?
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Current Insurance Costs for Electric Cars
The advantages of owning an electric car are in the headlines, but how car insurance companies will adapt to these vehicles is not so obvious. Most people consider the initial higher price tag for electric vehicles compared to the fuel savings and tax breaks, but the insurance question may make a significant difference as well.
Because these vehicles are so new, different insurance providers and experts have different ideas about whether these vehicles will have lower or higher insurance rates.
Most insurance providers seem to think that it will take a number of years before we know for sure what rates will be like compared to gasoline-powered vehicles.
Hybrids, which have been around for a longer period of time than electric vehicles, are sometimes more expensive to insure. Some insurers give discounts for hybrid owners, but even this doesn’t always translate to lower prices than regular vehicles receive.
For instance, even with the 10 percent discount that electric and hybrid cars get, a 2010 Toyota Camry Hybrid is still over $600 more to insure than the standard model.
Why Electric Car Insurance Could Be Higher
So some people are getting breaks on their insurance and others aren’t. The question is “why?”
First of all, there is not enough data for insurance companies to assess the risk of electric vehicles.
The insurers also believe that repair costs will be much higher for electric vehicles than for regular vehicles until the cars get more popular and repair shops start carrying the parts necessary to bring prices down.
Providers also say that the smaller the car, the more likely the car is to be stolen. Also, the smaller the car, the more likely it is to get totaled in an accident, resulting in high replacement costs for the insurance company.
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Why Electric Car Insurance Could Be Lower
On the other hand, some insurers see the situation differently. Like the early hybrids, a lot of companies rated them as less risky than the gas-only models for various reasons.
First of all, there aren’t any sporty models on the market, and most of the electric vehicles can’t go much faster than the speed limit on the highway. The buyers of these cars tend to be “a pretty careful bunch” according to an article by USA Today that would fit a safe driver risk profile.
For some companies this leads to lower insurance prices, as the less risky aspect makes up for the lack of risk related data.
The fact that the industry standard for electric cars at this point is 100 miles per charge, electric car owners will also be driving considerably less, which cuts down on risk as well.
Projected Insurance Costs for Electric Cars
With more options coming out and with gasoline prices remaining high, sales of electric and hybrid vehicles are likely to rise to record levels.
March of this year was the biggest sales month ever for these two classes of vehicles with 52,000 units sold. This number equals 3.64 percent of total car sales in the United States, which is the largest ever as well.
Some experts believe that these cars will make up almost 9 percent of vehicle sales by the year 2017.
What You Can Do to Lower Costs
Until the insurance companies get more data and have more information the best way to get lower insurance is probably using old fashioned methods.
The first thing to do as a consumer is to shop around every year when your policy is about to renew. Some insurers will charge less if you own an electric and some will charge more.
Since you probably won’t be driving your electric car far each day, try to get a low mileage car insurance discount. A new type of insurance that is becoming more and more popular is the pay as you drive option, which means you pay a certain amount per miles driven.
This is monitored by a special device that the insurance company has you install on your car.
There are other things you can do to lower your insurance rates that are the same tactics you would use if you had a car that ran on gasoline. These include installing extra safety features on your vehicle or taking a defensive driving class.
The car itself is a crucial component of the risk factors that affect car insurance rates, but other personal factors such as credit score, the location of residence, and driving record will always be important no matter what car a person may drive.
Ask your insurance company about discounts that may apply such as a senior or student discount.
Until the insurers figure out what to charge and the repair shops have the parts in stock, getting cheaper insurance premiums just because you own an electric or hybrid is probably not going to be as easy as it would seem.
As these vehicles get more and more popular, most experts do agree that insurance prices are more likely to go down than up.
Expect electric cars to keep getting more popular and ownership costs to keep going down, including insurance prices.
In the meantime, compare your personal insurance costs from different companies for potential cars before you buy a new car or new insurance policy to get the best options available!
Use our free car insurance comparison tool now by entering your zip code below!