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Thinking of Buying an Electric Car? Know Why it Can be a Blessing or a Burden

Owning an electric car is environmentally friendly and sounds heavenly. You reach your destination without filling up gas; all you have to do is recharge the batteries in your garage daily. There are a plethora of long-term benefits from owning an electric car as you help the environment by not adding to pollution, you promote green living and also save money.

Creator: Chris Ratcliffe | Credit: Bloomberg | Copyright: © 2020 Bloomberg Finance LP

Anybody conversant with electric cars should be familiar with its benefits. However, hidden from the public eyes are hidden costs of having an electric car which will shock you. Owners find that fuel cost savings are cancelled by astronomical car insurance premiums and maintenance costs.

Why lower electric car sales?

Insurance companies are enhancing premiums as revealed by an investigation by a consumer website on receiving grievances from electric car owners about very high insurance costs which led to the drop in electric car sales for the first half of this year. Additionally, there is a sharp contrast seen between the electric cars sold and the number of registered diesel /petrol cars. There were 1.2 million diesel/petrol vehicles sold while 7,441 electric cars were sold during the period between January and June this year. Green cars may, thus, find lesser fans than diesel and petrol cars.

Creator: Monty Rakusen | Credit: Getty Images/Cultura RF

But why this consumer preference for diesel cars over the electric cars despite the environmental benefits offered? Owning an electric vehicle has certain advantages besides saving on fuel expenses and you help to save the planet while commuting to work daily. But, there’s a good and a bad side. Rivals of electric cars point to the inconvenience of frequently charging the batteries with limited number of charging ports, for decrease in sales while others say that higher prices and maintenance costs are major problems.

Real reason for sales drops

Insurance Premium Tax has led to steep decline in electric car sales for the first half of 2018 as premiums increased by 60% in electric cars when compared to diesel and petrol cars. The government could halt the deteriorating sales numbers by canceling the IPT and lower the insurance paid for electric cars enabling owners to trade their petrol or diesel cars with an electric kind. This will benefit the environment also. Those who are most affected by higher insurance premiums are the young professionals, heavily targeted by electric carmakers and pay upwards of $2,200 annually to insurance corporations which causes financial stress.

Why are premiums increasing?

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The Association of British Insurers connected higher premiums to expensive car parts as well as specific new skills required to repair electric cars. This confirms that while ‘green’ vehicles are smaller and less powerful, technicians for repairs with rare skillsets are required. Further, the electric cars are still quite uncommon as compared to diesel and petrol cars, and spare parts are rare and costly. The Association expected that car insurance for electric vehicles would decrease when they became mainstream. A test quote showed that a petrol car of the same model and manufacturer cost $700 in insurance premiums, a diesel vehicle, $750, and an electric car, $2,250. Government needs to intervene to reduce environmental pollution. Electric cars are now charged for shorter periods, and relatively cheaper than before, with good mileage available, but their popularity plummets every year.

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