The price comparison site’s study found that the average premium for an electric car during the first quarter of 2021 came to £566, down from £641 in the final quarter of 2020. And that’s just the average ‒ the cheapest deals on the market have dropped at a similar rate over the same period, from £551 to £478.

This is significantly cheaper than the costs of cover for petrol or diesel cars. According to comparethemarket.com, the average premium for a petrol or diesel vehicle in the first quarter was £611, though this is also markedly down on the £712 average registered in the final quarter of last year.

The study highlighted that the cost of insurance for electric cars has fluctuated significantly over the last couple of years, having hit a peak of £692 in December 2019 and dropping to as little at £550 in February this year.

Boosting your finances

Insurance costs are just one area that drivers can save money by opting for an electric car. Road tax is charged based on carbon emissions, and so electric car drivers do not not need to pay this levy so long as their vehicle cost less than £40,000.

In addition, drivers can make use of a £2,500 government grant when purchasing eligible electric cars which come with a price tag of less than £35,000, making the switch to electric more affordable.

Dan Hutson, head of motor insurance at comparethemarket.com, noted that an electric car could be an appealing prospect given the savings on insurance, fuel and tax.

He added: “Generally, electric cars have fewer complex moving parts that can be damaged compared with a traditional engine, and battery packs are reasonably well protected in accidents, reducing the risk of replacement. Electric cars are typically less likely to be stolen and more likely to be recovered when they are, due to their limited range and because charging them is relatively time-consuming.”

The growing popularity of electric cars

Drivers are increasingly turning towards electric, or at least hybrid, vehicles.

According to the latest stats from the Society of Motor Manufacturers and Traders, sales of diesel cars are down 32.3% in the year to date, while petrol vehicles are down by 4.5%. This is in stark contrast to the rising sales seen by the various types of electric car. Mild hybrid electric cars for example are up by 172% year-on-year, while mild hybrid diesels are up 141%. Plug-in hybrids meanwhile have rocketed by 162%.

Part of this is likely down to the government’s ban on the sale of new petrol and diesel cars from 2030, but the improving infrastructure around ‘green’ cars is also boosting their appeal.