Why Is Car Insurance So High On Electric Cars?
September 29, 2018
There are more than 11 million registered vehicles on South Africa’s roads, and between 65- and 70% are uninsured. Motorists give a hundred-and-one reasons why they don’t insure even their electric cars. Most will say that the insurance is just too expensive for all the frustrations they have with the insurance. For instance, the insurers not wanting to pay out at claim time.
These insurance companies look at the risks. These include your address, your history of driving and your age to work out your car insurance quotes. This is what makes prices vary from one insurance company to another.
Exit Rising Fuel Costs – Enter Higher Insurance
Now insurers are having to contend with electric cars too. Most people buy an electric car because they want to get rid of rising fuel costs affecting them. Also they want to drive a more eco-friendly car. Little do they know that they’re opening themselves up to higher insurance rates.
Insurance premiums are based on a number of factors, but even so, having a huge, excessively high premium enforces the importance of shopping around for more affordable insurance. Insurance is higher also because these vehicles have expensive batteries and technology that costs a fortune.
You’re a ‘Riskier’ Driver with your Electric Car
South Africa has electric cars and a number of brands are coming onboard despite the country lacking sufficient electric infrastructure. Even though electric vehicles aren’t yet practical in South Africa, the idea is catching on.
For South Africans, while lower fuel costs and driving a low-maintenance vehicle appear to be valuable considerations, car insurance might change your idea. Owning an electric car makes you a ‘riskier’ driver – a greater liability with the insurance company. The reason for this is that electric cars are more expensive to buy than petrol cars.
An electric car is more expensive to buy and repair, and a mechanic will possibly have difficulty with finding replacement parts because currently there aren’t enough parts available in South Africa yet. They’re also not 100% clued up on the inner workings of these electric cars.
Electric Cars and Servicing
Also, although electric cars don’t require servicing as much as petrol driven cars, it can cost more to repair them after an accident. This is because of their costly battery systems and the need to use mechanics who have been specially trained to repair and service electric cars.
Forget Cash Discounts
Other questions that came up with insuring an electric car is why do some car dealerships battle to accept cash from you in payment for a car? Is is because as a cash buyer, you’re using a payment method which isn’t financed at the dealer?
Cash is no longer king, certainly not in South Africa where carrying a lot of cash can be your cash being snatched from you, and your life. The banks discourage the use of hard cash, insisting that customers use electronic banking, ATM’s and EFT’s.
If you’re driving an electric car in South Africa, for insurance, compare the market. The main concern with insurance for electric cars is the risk associated with driving the vehicle. Most traditional insurers in South Africa don’t provide cover for electric vehicles because there are still so few on our roads. When there are far more, cover for electric cars will become more mainstream.
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All info was correct at time of publishing