The annual insurance premium for an electric vehicle rose by an average of £313 year-on-year, a comparison site finds.
In November 2023, the typical cost to insure an electric car was £929 – a hike from £616 in the same month a year before.
Increasing insurance prices are due to a rise in the cost to repair the vehicles for insurers. A rise in premiums was also seen with petrol-reliant cars too, with an average price to insure your car setting you back around £980, which is £337 more than at the same time in 2022.
Compare The Market found that cheaper electric vehicle (EV) insurance was down to the profile of the drivers. Due to the higher price of EVs, despite prices falling last year (average cost is £31,276), drivers tend to be older with more experience on the roads. The cheaper premium price is also due to the off-street parking the owners will likely have to charge the vehicle overnight, lessening the chance of a collision or break-in.
Electric vehicle drivers ‘will be concerned’
Meanwhile, according to the Society of Motor Manufacturers and Traders, sales of electric vehicles dropped by 17% in the year leading up to November 2023 too – a trend that may continue.
This is likely down to the fact that EV owners will need to pay £180 per year on vehicle excise duty from April 2025 from the second year of car registration at the current rate of tax. Drivers currently need to fork out £390 per year for EVs worth £40,000 or more in their second to sixth years of registration, which could soon lead to an extra £570 more in road tax every year.
Shopping around for the best price will be vital for motorists to save money when insuring an electric vehicle.
Julie Daniels, motor insurance expert at Compare the Market, said: “EV owners will be concerned about the surging cost of car insurance. Drivers who’ve made the switch to an electric vehicle will be glad their choice of car is more environmentally friendly, and they are substantially cheaper to run than petrol-fuelled cars.
“However, the significant upfront cost of buying an electric car and installing a home charging point along with the upcoming tax increases will prevent many drivers from being able to afford this option.”
