The Most Affordable New Electric Vehicles to Insure

By the Mercury Team

As electric vehicles (EVs) become more popular, many drivers are looking to make the switch to a greener, more sustainable mode of transportation. However, the cost of insuring an EV can be a significant factor in the total cost of ownership.

“One of the most important aspects when researching your ideal EV is to consider the total cost of ownership, in which insurance plays an important part,” said Chong Gao, Director of Product Management R&D for Mercury Insurance. “We realize that for many customers, this may be their first time considering an EV, and it helps to have as much information at your fingertips as possible.”

In this blog, we’ll explore the most affordable new EVs to insure, compare the insurance costs between electric and gas-powered vehicles, and provide tips on saving on your EV insurance rates.

What Is the Cheapest Electric Car to Insure?

Mercury’s research and development team examined 2024 model-year (MY) EVs that are available at dealerships today to compile this list. The top-ten list for new EVs, beginning with the most affordable make and model to insure, is the:

1. Kia Soul EV
2. Nissan Leaf
3. Ford F-150 Lighting
4. Kia Niro
5. Hyundai IONIQ
6. Volvo C40/XC40 Recharge
7. Chevrolet Equinox EV
8. Fiat 500e
9. Subaru Solterra/Toyota BZ4X/Fisker Ocean Sport
10. VolksWagen ID.4

Insurance for Electric Cars vs. Gas: Are EVs More Expensive to Insure?

According to the National Association of Insurance Commissioners, EV insurance costs up to $44 more per month on average than insurance for gas-powered vehicles. Tesla’s Model Y and Model 3 are the most expensive EVs to insure.

Here are some of the key reasons why car insurance on electric cars is priced higher:

Cost of Purchase and Repair

EVs are typically more expensive to purchase than gas-powered vehicles, which translates into higher insurance premiums. Additionally, the batteries that power EVs are costly to repair or replace. Repairing an electric battery is complex and hazardous, often requiring specialized technicians. In many cases, replacing the battery is more economical than repairing it. This contributes to the overall higher insurance costs.

Limited Repair Shops

The scarcity of repair shops specializing in EVs also drives up insurance costs. Fewer shops are capable of handling the unique needs of EV repairs, so labor and parts costs tend to be higher. This scarcity of specialized services means that when an EV needs repairs, it can be more time-consuming and expensive than similar repairs on a traditional vehicle.

Safety and Cybersecurity Concerns

EVs present unique risks that also contribute to higher insurance premiums. These include:

• Battery fires: Although the overall risk of fire in EVs is lower than in gas or hybrid vehicles, the fires that occur are more complex and expensive to extinguish and repair.
• Pedestrian safety: EVs are quieter than traditional vehicles, which can pose risks to pedestrians who might not hear them approaching.
• Cybersecurity threats: As EVs are often more technologically advanced, they can be more susceptible to cybersecurity threats, increasing both the risk and cost of insurance claims.
• Automated driving features: Many EVs come equipped with automated driving features, which, while increasing safety, also add to the complexity and cost of repairs.

Market Dynamics

The market for EV parts and specialized labor has not kept pace with the growing popularity of these vehicles. This lag results in higher costs for parts and repairs, further driving up insurance premiums.

How to Save on EV Insurance Rates

When it comes to saving on EV insurance, consider the following strategies to help reduce your premiums:

• Compare quotes: Shop around and compare auto insurance quotes from different providers to find the best deal.
• Bundle policies: To get a discount, consider bundling your auto insurance with other policies, such as home or renters insurance.
• Take advantage of discounts: Many companies offer auto insurance discounts for safe driving, installing safety features in your car, and more.
• Increase your deductible: A higher deductible can lower your premium, but make sure it’s an amount you can afford to pay out of pocket in case of an accident.
• Maintain a good credit score: Insurers often use credit scores to determine premiums, so maintaining a good credit score can help reduce your rates.
• Ask about EV-specific discounts: Some insurers offer discounts specifically for electric vehicle owners, so be sure to ask about these options.

Conclusion

While EVs can sometimes be more expensive to insure due to their higher initial costs and specialized repair requirements, their advanced safety features, low maintenance, and lack of gas costs can make them a financially savvy choice in the long run. By choosing the right make and model and taking advantage of various discounts, you can ensure that your transition to an electric vehicle is both environmentally friendly and economically sound.

Mercury is committed to providing affordable auto insurance options tailored to your needs. Whether you drive an electric vehicle or a traditional gas car, we offer competitive rates and comprehensive coverage to keep you protected on the road.