Car Insurance: Why Electric Cars Cost More

Thinking about buying an electric car? While you might kiss gas prices goodbye, according to a study from NerdWallet, you could pay a higher car insurance premium for electric vehicles of the same version. Why would an electric car cost more for auto insurance? NerdWallet attributes the extra cost to a higher valued vehicle that will cost more to repair.

In the study, they found that car insurance quotes for an electric vehicle cost 21 percent more than what you might find for a quote with gas vehicles. In the study, NerdWallet checked the differences among the:

• Chevrolet Spark
• Volkswagen Golf
• Fiat 500
• Smart Fortwo

When reviewing the differences, researchers found that Volkswagen Golf had a 16 percent difference while the Fiat 500 had a 26 percent difference in car insurance. The more a car costs, the more the car insurance company will need to pay if they total the car, or it gets stolen. Even though electric cars cost less than gas vehicles, the expensive battery system and the specially trained mechanic is what leads to the extra cost in premiums. However, that is not to say that electric cars do not feature some attractive benefits. For example, if you own an electric car, you may qualify for a $7,500 federal tax credit.

In a different study, NerdWallet discovered that you may still pay less for an electric vehicle over a five-year period. This considers the full picture such as the buying and operating costs of owning an electric vehicle. You may also qualify for a discount if you insure an electric vehicle. However, remember that it does not matter how many discounts you will be given. In the end, it is the final price that matters.

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Sources:
NerdWallet
Huffington Post