An electric car can be great for the environment, but it may cost you more in some ways.
As more people look for ways to better protect the environment, electric vehicles (EVs) are becoming more popular. If countries accelerate their efforts to prioritize energy and climate goals, the International Energy Agency estimates there could be up to 30 million electric vehicles globally by 2030. Electric cars don't require gas since they're powered by electricity, a renewable energy source, and typically require less maintenance than a gas-powered vehicle.
The benefits are clear, but does an EV cost more to insure? Here are the details.
Electric cars may require less maintenance
Electric car owners may find that their cars require less maintenance. The U.S. Department of Energy offers these reasons:
- There are fewer liquids, like engine oil
- Regenerative braking results in less brake wear
- Electric vehicles have fewer moving parts
- Electronic parts like the motor and battery require much less maintenance than their gas counterparts
Less vehicle maintenance can result in savings, but what about the cost of insurance? If you drive a gas-powered car and are thinking of making the switch to electric, leave some money in your budget for higher insurance costs.
Electric cars cost more to insure
According to Kelley Blue Book, electric cars tend to cost more to insure. Electric cars also cost a lot of money to acquire. And, though they require less maintenance, their high-tech components can cost more to repair and replace than those of a gas-powered vehicle. Insurance companies need to account for the added repair costs, so they charge higher insurance rates.
It's smart to speak with your agent before buying to get a feel for what the insurance costs might be for different electric vehicles. You can also reach out to multiple insurance providers to see where you can get the cheapest insurance rate.
Do electric cars require special insurance coverage?
There are no special auto insurance requirements for owning an electric vehicle. Electric car insurance policies look very similar to the policies written for gas-powered cars. You will need to carry the coverage required by state law, but if you want to feel more protected, you may want to invest in more than the state minimum.
Before you buy an electric vehicle, consider the total cost of ownership. Beyond a car loan payment, look at upkeep, insurance, and potential repair costs. Ensure that you're carrying enough insurance, and consider what deductible works best for your financial situation. If you need help choosing a car insurance company or want to get policy quotes, take a look at our list of best auto insurance providers.
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