Are electric cars cheaper to insure?

Expensive though they may be to buy compared to their combustion-powered equivalents, electric cars can save their owners a great deal of money in terms of running costs. Electric charging, for instance, is much cheaper than filling up with petrol or diesel, especially when done at home on a night tariff; motor tax is a reasonable €120 per year; servicing is pretty cheap too, given that an EV has much fewer moving parts than a petrol car and doesn’t require a regular change of engine oil. When it comes to insurance though, the picture isn’t quite so rosy.

Are electric cars cheaper to insure in Ireland?

In short, the answer is no. In Ireland, a driver’s insurance history and driving experience have a far greater effect on the cost of their cover than what car they’ve chosen, but that’s not to say that the car doesn’t matter.

We actually know extraordinarily little about how Irish insurers adjust their premiums based on specific cars, but back in 2017, KennCo Insurance released a blog post revealing that there are 50 insurance groups for cars in Ireland with the lowest three being cheapest to insure. Cars on KennCo’s list almost exclusively included machinery such as the Toyota Aygo and Ford Ka — small, simple, inexpensive cars with low repair costs and lower power outputs. That generally can’t be said of electric cars, which tend to be quite new, reasonably powerful cars with brisk acceleration and which may require expensive specialist repairs in the event of an accident.

It’s a fair assumption that Irish insurance groupings largely mirror those in the UK. In fact, the industry has said as much, with many Irish insurers basing their ratings on UK data (a bigger market means a much larger dataset). What’s expensive to insure there will also likely be expensive to insure here, and the news isn’t good for electric cars.

Like in Ireland, the UK uses 50 different insurance groupings with the lowest corresponding to the cheapest cars to insure — cars such as the Volkswagen Polo and Kia Picanto reside in Group 1. Looking at some of the most popular electric cars in both the UK and Ireland though, they start from much higher up the scale. The Nissan Leaf, for example, depending on the model, runs from Group 21 to 28. The VW ID.4 starts at Group 18, also going as high as Group 28. The Hyundai Ioniq 5, even in its lowliest guise starts at Group 30 and runs to Group 41. The Tesla Model 3 starts at Group 48, peaking in the highest Group 50 bracket. There’s little reason to suspect that those insurance groups aren’t broadly the same as in Ireland.

The Swiss division of the insurance company Axa has said that its statistics “show that drivers of electric vehicles cause 50 per cent more collisions with damage to their own vehicles than drivers of conventional vehicles with combustion engines.”

It believed that the reason behind the higher proportion of collisions involving electric cars was as a result of what it called the “Overtapping Effect”, or drivers failing to anticipate the sudden rapid delivery of torque resulting from being unintentionally overzealous with the accelerator of an electric vehicle.

“What the statistics also show,” according to Axa Switzerland, “is that drivers of more powerful electric vehicles cause damage to either their own or someone else’s vehicle more frequently.”

This may be a big part of the reason behind electric cars being lumped into such high insurance groupings, but another factor may also be the fact that electric cars can be somewhat harder to recover when they break down.

EVs are immensely complex machines that can seldom be fixed at the side of the road. What’s more, because of the way they’re geared, they cannot be towed conventionally and usually need to be loaded onto a flatbed lorry even if they’ve only run out of battery power. With a breakdown recovery service often an optional extra on car insurance policies, it seems logical that companies would also factor in the extra recovery costs into an EV owner’s premium.

None of this is good news for any EV driver, but it’s even worse news for younger, environmentally-conscious drivers who may need a car to get to work or college and who would like to reduce their personal environmental impact. Car insurance for younger drivers in Ireland, even for small, cheap cars, is already extortionately high, but, even if younger drivers are able to secure financing for a newish car, those inflated EV premiums will likely mean that zero-emissions driving is still quite a way out of reach.