In an effort to persuade more drivers to consider hybrid and all electric vehicles, proponents of these technologies have been shifting the conversation about them away from the environment and more towards economics.
Not everyone can be persuaded to drive a certain type of vehicle simply because it may have environmental benefits, but a far more persuasive approach is to talk about how a certain type of vehicle can actually save you money in the long-run.
The economic argument for hybrids can vary as fuel savings tend to be larger for those who drive mostly in urban areas. There is a more compelling economic argument for EVs where ‘fueling’ up is concerned since the average cost to ‘fuel up’ an EV when compared to gasoline-driven vehicles can often be quite substantial. Maintenance costs for EVs tend to be far lower as well since they don’t require common maintenance tasks such as regular oil changes.
But what about when it comes to insuring them? Are EVs and hybrids cheaper to insure?
There are a multitude of factors that go into determining auto insurance premiums – many of which have no bearing on what type of vehicle technology is utilized. Where a driver is insured, gender, age, purpose, amount of use and more all are factored into the price of the premium. Each vehicle model can also be rated differently as well – even right down to whether a vehicle has two doors or four.
Insurance companies need to factor in both risks associated with a particular vehicle, driver and other parameters as well as how much it would cost to repair or replace a vehicle if necessary.
To this point, there is little data right now that directly relates to the type of propulsion technology a vehicle utilizes and how it may increase or decrease the risk to the insurer. What evidence there is however, does tend to support the notion that insuring hybrids and EVs is less risky for insurance companies, but the evidence doesn’t directly relate to the fact that it’s specifically a hybrid or EV.
In general terms automakers have found that a typical EV or hybrid driver is one that tends to drive in a more conservative or less risky manner. Demographics also tend to show that drivers of EVs or hybrids tend to fall into categories and age groups where less accidents tend to occur.
This information is off-set somewhat by the fact that EVs and hybrids tend to be more expensive to repair when involved in an accident. This is due to the fact that these are relatively new technologies and this disadvantage will likely decrease as time goes by and more of these vehicles are on the road.
With this all said insurance companies have for the most part determined that insuring EVs and hybrids pose less of a risk to them than similar vehicles using gasoline engines alone and have begun to offer better premiums as a result.
Quebec-based La Capitale Financial Group for example has begun to offer discounts for policies involving EVs or hybrids. According to spokesperson Dominique Larouche, La Capitale offers a 15% policy discount, and she advises that the rationale is based on both data plus the fact that they want to promote the use of vehicles that pose less harm to the environment. Given that Quebec has some of the highest usage of hybrids and EVs in the country it also makes good economic sense to meet the needs of a target market that is large and only growing larger.
So if you are looking for a new vehicle and you are considering the purchase of either a hybrid vehicle or a battery-electric vehicle, you can also factor in that among the economic benefits is the fact that you’ll likely save on insurance policy premiums as well.
(Note – this post has been sponsored by La Capital Financial Group)
I have wanted an electric or a hybrid car for a while, since it could save me money in gas and it helps the environment. I have heard that I can also save money on car insurance is a big bonus too. Once I save up enough money, the next car I buy will be one like this.