Data reveals that owners of electric vehicles (EVs) are faced with insurance premiums more than double those of petrol car owners. According to UK insurance broker Howden Group, the average insurance premium for EVs reached £1,344 by the end of the previous year, approximately twice the cost of insuring traditional petrol-fuelled vehicles. This represents a 50% increase from the previous year.
The surge in premiums is attributed to the higher repair costs associated with electric models, with challenging battery repairs and a shortage of qualified mechanics contributing to the escalation.
Carl Shuker, the UK and Ireland head of the brokerage, noted “You’ve got length of repair times going up, you’ve got the cost of the component parts going up, and you probably see more EVs written off because residual values are particularly low at the moment,”
While insurance costs for combustion engine cars have also seen substantial increases, with the average rising by £338 over the past year to reach £924, the rise in EV insurance is comparatively more significant both proportionally and in absolute terms, according to Howden.
In comparison, although the cost of insuring a typical internal combustion engine car increased by 31%, it still remained £668 less expensive per year than insuring an electric car. Howden attributes this difference to the higher frequency of claims from EV drivers and the substantially higher average cost per claim, which is around 35% more for EVs compared to combustion engine cars.
This trend comes amid predictions by Auto Trader that electric car prices are expected to decrease this year, driven by the entry of Chinese electric car manufacturers into the UK market. With the new zero-emission vehicles (ZEV) mandate in effect, requiring at least 22% of new cars sold by each manufacturer in the UK to be zero-emission in 2024, established brands face increased competition and may need to reassess their pricing strategies to maintain market share. The ZEV mandate aims for 100% zero-emission vehicles by 2035.
