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Electric vehicles more expensive to insure than petrol cars: Data

EVs are more costly to insure than petrol cars, new data shows.

EVs are more costly to insure than petrol cars, new data shows. Photo: TND

Electric vehicles can be significantly more expensive to insure, according to new research, which has revealed petrol cars can be up to $1690 a year (95 per cent) cheaper.

Figures published on Thursday by Compare The Market found it costs an average of $3434 a year to insure a Tesla Model Y RWD.

That compares to an average cost for comprehensive insurance of just $1744 for a petrol fueled Toyta Rav 4.

The gap shrinks to only about $100 (7 per cent) when comparing the much cheaper MG 4 Excite 51 EV with the petrol-fueled Hyundai i30 N Line hatchback.

But Compare The Market said the top five selling EVs in the first half of 2024 were on average 43 per cent more expensive to insure than a “similar petrol-powered model”.

“There are already a number of EVs that are priced on par with some petrol-powered models – but … insuring an electric car could cost considerably more than insuring a similar petrol-powered model,” Compare The Market’s spokesperson David Koch said.

“Across the top five best-selling EVs and 12 car insurance providers, motorists could be spending between $98 to $1,788 more to comprehensively insure an EV every year – which may diminish some of the benefits of reduced running costs.”

The gap in insurance costs between petrol and electric vehicles has also been identified in separate research by comparison firm Mozo.

Their latest insurance report showed it costs Australians a whopping $2767 a year on average to get coverage for an EV, 73 per cent more than the $1597 for petrol car drivers.

Hybrids, meanwhile, cost an average $2206 to insure – lower than EVs but higher than petrol.

The higher premiums reflect higher sticker prices for EVs than most petrol cars and underscore why upfront costs remain a key barrier stopping Australians from moving from petrol to electric.

Experts predict EV prices will continue to fall in coming years as more models enter the market, which should over time also adjust how car insurers are pricing their products.

Koch added that insurers also charge more for EVs because their batteries create “more complexity” for repairers, who often need to import specific parts from overseas.

“There are fewer qualified smash repairers for electric cars,” he said.

Fuel type is also far from the only factor that influences insurance premiums, with Mozo’s report identifying things like the age of your vehicle, the history of the driver and even the car colour.

“Black cars are the most expensive to insure ($1,794), followed by white cars ($1,758), brown cars ($1,571) and blue cars ($1,633) are the cheapest to insure,” Mozo said.

Car insurance skyrockets

Mozo’s 2024 report covered almost 300,000 car insurance quotes from 33 providers, providing a comprehensive snapshot of the market in a year where average premiums soared 16 per cent.

A separate survey of 1556 people found 57 per cent of drivers reporting an increase in premiums over the past year, more than half of whom now say they are paying up to $200 more annually.

Average insurance costs were highest in Victoria ($2139), coming in just under $2000 in New South Wales and around $1500 in Queensland. Tasmania had the lowest costs at $1301.

“Drivers are feeling the pinch of rising premiums, but not all are comparing to see if they can get a better deal,” said Rachel Wastell, Mozo’s personal finance expert.

“Switching to a better value insurer can lead to substantial savings.”

Mozo’s analysis found savings of up to $463 a year are available to drivers that shop around and switch providers.

“Close to 1 in 5 Aussies think it’s important to go with a well-known insurer, but some smaller providers can be just as good, sometimes with better prices,” Mozo said.

The comparison firm said another way to save money on car insurance is to consider whether you actually need all those extras.

“Roadside assistance or personal effects cover are great for road trips, but you might not need them all the time,” they said.

“Look for policies that let you cancel or adjust those extras when you don’t need them.”

Koch said motorists should shop around for insurance, but added that it would be good if insurers started to adopt EV discounts.

“Just like banks and lenders have started offering green car loans, it would be great to see insurers adopt some green discounts for electric car premiums,” he said.

“For now, the best way to ensure you’re getting a good deal is to compare. No matter if it’s your car insurance or electricity plan, there are options out there. Don’t park yourself into higher prices.”

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