Buyers have been snapping up electric vehicles as the cost of fuel increased.
Photo: Unsplash / Andrew Roberts
Buyers have been snapping up electric vehicles as the cost of fuel increased, but there’s a warning that insurance could be pricey.
Justin Lim, chief executive of insurance comparison site Quashed, said electric vehicles would generally cost more to insure than petrol or diesel cars, but there could be a lot of variation between models.
He said across the case studies he used, EV insurance premiums were anything from 6 percent to 38 percent higher than their petrol or hybrid equivalents.
For a 30-year-old in Auckland, a Tesla Model Y would have an average annual insurance cost of $3261, about 38 percent higher than a Subaru Forester at $2370, and 29 percent higher than a Toyota Rav4 Hybrid, at $2521.
A BYD Atto 3 electric vehicle would cost $2486 on average to insure a year, 18 percent more than a petrol Mazda CX-5.
Lim said the difference was driven by factors such as higher repair and specialist costs.
Justin Lim, chief executive of insurance comparison site Quashed.
Photo: Supplied / Quashed
“EVs feature advanced tech, high-cost battery systems, and intricate sensors that require specialised tools and certified technicians. Because NZ’s network of certified EV repairers is still growing, labour costs and wait times are higher, which insurers price into premiums.”
He said newer manufacturers also often lacked the scale and established parts distribution networks of brands like Toyota or Mazda which might mean parts had to be imported.
He said hybrids were a middle ground between electric vehicles and petrol vehicles because they usually benefited from those established networks.
But he said, within electric vehicles there could be significant difference, too.
“There is a notable contrast between an established EV model like the Nissan Leaf and newer entrants like Tesla or BYD. The Nissan Leaf averages $1945 a year, only about 6 percent higher than a petrol Mazda 3.
“As the leaf has been on Kiwi roads for a long time, a mature repair network and healthy used parts market have developed, helping to lower premiums.”
He said Tesla and BYD were more expensive.
The replacement value of a vehicle would also influence the cost of insurance, he said. “A Tesla Model Y starts at a much higher retail price than a Nissan Leaf, which naturally pushes its insurance cost up.”
But Lim said as electric vehicles became more common, the insurance gap should narrow.
Consumer NZ’s insurance specialist Rebecca Styles said newer technology could be regarded as riskier by insurers.
“Other aspects, for all insured vehicles, include the cost of the vehicle, make and model of the car, whether you park it in a garage, or on the street, as well as your claims history.”
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