Mikkel Christensen
Electric vehicles are often seen as a cheaper alternative in the long run. But while drivers may spend less on fuel, other ownership costs are becoming more apparent.
Electric vehicles are often seen as a cheaper alternative in the long run. But while drivers may spend less on fuel, other ownership costs are becoming more apparent.
New analysis highlights insurance as one of the key differences.
Higher premiums
Insurance for electric vehicles is significantly more expensive than for petrol cars, according to research by Choice.
On average, EV owners in Australia pay about $2,545 annually, compared with $1,702 for petrol vehicles.
This means electric car insurance costs around 40% more, adding roughly $843 per year.
Gap remains
The difference is not limited to new models.
Choice found that even when comparing vehicles of the same age, electric cars are still more expensive to insure.
Owners of new EVs pay close to 30% more than those with petrol cars. For vehicles aged between one and four years, the gap remains at roughly 22% to 27%.
Hybrids in between
Hybrid vehicles fall between petrol and fully electric models.
The average premium for a new hybrid is about $2,005, compared with $1,865 for petrol cars, according to Choice.
That makes hybrids moderately more expensive to insure, but still cheaper than EVs.
Why costs are higher
Several factors contribute to the higher premiums.
Choice notes that EV repair networks are still developing, meaning parts often need to be sourced from overseas. In addition, there are fewer qualified technicians, which increases labour costs.
These higher repair expenses are reflected in insurance pricing.
Costs may fall
Over time, insurance costs could decrease as the market matures.
Electric vehicles have fewer moving parts than traditional cars, which may reduce the likelihood of mechanical issues.
Expanding repair infrastructure could also help bring costs down.
Similar coverage
Most insurers do not offer separate policies for electric vehicles.
Instead, EVs and hybrids are typically covered under standard car insurance, although some providers include additional cover for charging equipment.
Sources: Choice
