Are Electric Cars More Expensive to Insure Than Gas-Powered Cars in Canada?

One unspoken truth about owning an EV is that electric car insurance is often more expensive than gas-powered cars. Everyone talks about the savings at the pump but are most of those cost savings being funneled into insurance payments instead??This was the case in my experience, as I saw my insurance payments rise by almost $200 a month upon my recent purchase of a Tesla Model 3.

This article will take a look at electric car insurance prices and reveal what the true savings are, if any, of owning an EV in Canada.

What Are Electric Car Insurance Premiums Based On?

Why are electric car insurance premiums higher than for gas-powered cars? Here are a few reasons why EV insurance is usually more expensive in Canada.

Cost of Repairs

One of the biggest reasons why insurance for EVs is pricier is because they are more expensive to fix. Anyone who has driven a Tesla knows how many high tech features are in the car. Well, it shouldn’t be surprising that if those parts, including the EV battery, are damaged in an accident, they are more expensive to fix.?

Lack of EV Repair Shops

Another reason why it is so expensive to repair EVs? There aren’t nearly as many shops or mechanics that can repair an electric vehicle. If repairing the EV requires specialized training, then the mechanic is also able to charge a higher rate to repair the car.?

Cost of the Vehicle

If you’ve shopped around for an EV you also know that they are typically more expensive than gas-powered cars. On average, even the cheapest EVs in Canada cost about 20% more than their gas-guzzling peers. Higher sticker prices equate to higher insurance premiums for electric car insurance.?

Insurance premiums are also impacted by where you live, your driving history, and how you intend to use the car. Take all of these things into consideration before making the switch to a ZEV.

What About The Savings on the Cost of Gas?

Of course, when we take into account the costs of driving an EV, we should consider the savings on gas. If we calculate that we drive about 15,000 km per year at a price of about $1.84 per litre, and an average fuel efficiency of about 8.6 litres per 100 km, we get the following calculation:

15,000 divided by 100 x 8.6 = 1,290 litres x $1.84 = $2,373.60 spent on gas on an annual basis

If you are in the market for an EV, then you should take this number into consideration when thinking about your EV Insurance Cost per year figure. Remember, these are all just average numbers to give you an idea of what you might be saving, or not saving when purchasing an EV.?

The Bottom Line: Is Electric Car Insurance More Expensive?

Bases on our research, car insurance is more expensive for electric cars. When comparing insurance with gas-powered vehicles, EV insurance is almost always higher. The only exception was the Hyundai IONIQ 5 in British Columbia.

If you add in the savings on fuel for each year, you will likely come out ahead most of the time. But, if you want to know if buying an electric car is good economic decision for you, you should also factor in the cost of the vehicle itself and the cost of electricity in your province. Most EVs are priced higher than gas-powered cars, so any gains made from fuel savings will likely be offset by paying for the car itself.

This article is the shortened version of an article originally published on Hardbacon.ca by Baggio Ma under the title " Are Electric Cars More Expensive to Insure Than Gas-Powered Cars in Canada?".