If you’ve been considering purchasing an EV (electric vehicle), be sure that you consider the cost of insuring it before you buy.
Due to the complexity of these vehicles and higher repair costs, even the least expensive EVs like the Chevy Bolt and the Nissan Leaf cost more to insure than larger gas-powered cars.
There is debate whether those added costs are balanced out by lower operating costs, including not having to purchase gas and cheaper overall maintenance as fewer things can go wrong with an EV compared to a gas-powered vehicle.
Nevertheless, insurance is an important consideration, especially now as rates have been climbing steadily for more than a decade — and with costs rising sharply in the last two years.
Average Insurance Costs*
Gas vehicles
2022 Honda CR-V: $1,808
2022 Toyota Corolla: $1,991
2022 Nissan Altima: $2,263
EVs
2022 Chevy Bolt 11LT: $2,269
2022 Nissan Leaf S: $2,313
2023 Audi E-Tron Quattro Premium: $3,244
2023 Testla Model S: $4,762
* As of October 2024
Source: Quadrant Information Services
Why is EV insurance more expensive?
There are several reasons EV vehicle insurance is more expensive:
EVs themselves are more costly — According to Kelley Blue Book, the average price of an EV was $58,940 in March 2024, nearly $11,000 more than the average cost of a new gas-driven vehicle then. The sales price has a direct correlation with the cost of insurance.
Costlier repairs — EVs simply cost more to repair than gas-powered vehicles. Despite the fact that they have fewer parts, the parts they do have cost more to repair and replace. As well, many of these vehicles have sophisticated camera systems throughout the outside of the vehicle to help drive-assist and self-driving technologies work properly.
There is also a scarcity of replacement parts, which results in longer repair times.
But the single most expensive part to repair or replace in an EV is the battery. The average cost of replacing a battery can be anywhere from $4,489 all the way to $17,658, according to a July 2023 article in ConsumerAffairs, an online publication.
Average Repair Prices*
Gas vehicles
Toyota Corolla: $362
Nissan Altima: $483
Hybrid
Toyota Prius: $408
Electric
Nissan Leaf: $748
Tesla Model S: $1,047
* As of October 2024
Source: Repairpal
Scarcity of qualified repair shops — Repairing EVs requires specialized training, which currently results in fewer options for repairs and higher prices.
There are not many independent garages that have the capacity to repair them, often leaving only one choice: the brand’s dealership. Since they are often the only game in town, their work orders are often backed up. In addition, there’s a shortage of technicians who are qualified to work on EVs.
What does the future hold?
Auto industry watchers expect that the cost of EVs and their associated repair costs will eventually start to drop as more drivers purchase these vehicles and more qualified repair facilities come online. That in turn should affect insurance costs as well.
But for now, expect to pay more to insure an EV versus a gas-powered vehicle.
A final point: there is some good news as some insurers offer discounts for EVs because they are involved in fewer fire-related accidents and are more eco-friendly.
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