EV Insurance vs Hybrid Car Insurance: A Detailed Comparison

How Do EV Insurance Costs Compare to Hybrid Cars?

When comparing EV insurance to hybrid car insurance, premiums for electric vehicles (EVs) tend to be higher. This is due to the higher repair costs, advanced electric motors, and expensive battery systems in EVs. On the other hand, hybrid cars, which combine a combustion engine and electric motor, are generally cheaper to insure because they are less complex and have lower replacement costs.

Average Annual Insurance Costs in the UK

Source: Association of British Insurers (ABI), 2024

The insurance premium for EVs is slowly reducing as more insurers enter the EV insurance market and more data becomes available to calculate risks accurately.

Why Is Hybrid Car Insurance Cheaper Than EV Insurance?

Lower Repair Costs

Hybrid cars have a fuel tank and an electric motor, but they also use standard combustion engines, which are cheaper to repair compared to the advanced electric motors and battery systems in EVs.

Easier Repairs

While EVs require specialist mechanics, hybrid cars can often be repaired at conventional garages, lowering repair costs and insurance premiums.

Smaller Battery Systems

Hybrid vehicles use smaller battery packs than fully electric cars, meaning battery cover and replacement costs are less of a concern for insurers.

Value of the Car

Electric cars tend to have a higher purchase price compared to hybrid vehicles, increasing the insurance costs due to the car’s overall value.

What Factors Affect EV Insurance Premiums vs Hybrid Cars?

Several factors impact insurance premiums for both EVs and hybrids:

1. Cost of Repairs

• EV repairs involve advanced electric motors, charging cables, and complex battery systems, driving up costs.
• Hybrid cars rely more on combustion engines and simpler electric components, reducing repair costs.

2. Accidental Damage

Accidental damage to an EV’s battery system can significantly increase repair costs. Hybrid cars, with smaller electric systems, have lower risk in such incidents.

3. Specialist Mechanics

Electric car repairs often require trained professionals with expertise in EV technology. Hybrid cars can be repaired at traditional garages, making labour cheaper.

4. Insurance Groups

Cars are categorised into insurance groups based on repair costs, power, and safety. Most EVs fall into higher insurance groups, whereas hybrid cars are often rated lower.

Compare Car Insurance

Save up to £523* on your car insurance

Compare Quotes Retrieve Quote

How Does the Value of the Car Impact Insurance Premiums?

The value of the car plays a key role in determining insurance premiums.

• EVs like the Tesla Model 3 or Volkswagen ID.3 have higher purchase prices, increasing the cost to repair or replace after accidents.
• Hybrid cars such as the Toyota Corolla Hybrid or Hyundai Ioniq are more affordable, reducing replacement costs and premiums.

Are Insurance Policies Different for EVs and Hybrid Cars?

Yes, insurance policies for EVs and hybrids often have slight differences:

Electric Vehicle (EV) Policies

• Battery Cover: Protects against damage or theft of expensive batteries.
• Charging Point: Covers damage to home or public charging points.
• Charging Cable: Includes protection for cables and theft-related incidents.

Hybrid Vehicle Policies

• Standard motor insurance policies cover hybrids, similar to petrol or diesel cars.
• No specialised cover is needed for charging points or cables.

EV drivers must carefully compare insurance providers to ensure they get comprehensive EV insurance policies.

Do EVs and Hybrids Benefit from Environmental Savings?

Both EVs and hybrids reduce fuel prices and lower carbon footprints compared to petrol or diesel vehicles. However, EVs offer zero emissions, making them ideal for driving in Ultra Low Emission Zones (ULEZ) and avoiding charges in cities like London.

ULEZ and Congestion Charge Savings

Insight: EV drivers enjoy free parking in certain car parks and additional incentives such as government subsidies for EV charging infrastructure.

Why Do EV Repairs Take Longer Than Hybrid Repairs?

EVs require advanced repairs for:

• Battery systems
• Electric motors
• Charging points and cables

In contrast, hybrid vehicles use smaller electric systems and traditional engines, reducing repair time and labour costs.

The Association of British Insurers (ABI) notes that EV repairs take 14% longer than petrol or hybrid repairs, impacting insurance premiums.

How Does Vehicle Tax Affect Insurance Costs for Electric and Hybrid Cars?

Vehicle tax, or Vehicle Excise Duty (VED), plays an indirect but significant role in insurance premiums for electric and hybrid cars. While electric vehicles (EVs) currently benefit from zero road tax, this exemption will change in April 2025. Hybrid cars, on the other hand, already fall under VED bands based on their CO₂ emissions. These tax changes influence the overall cost of ownership and can also impact car insurance costs.

Vehicle Tax Rates: EVs vs Hybrids

Source: UK Government, 2024

Insight: From 1st April 2025, EVs will lose their road tax exemption, aligning them with the standard rate applied to hybrid and petrol/diesel cars. For insurers, this may reflect a shift in the perceived cost of EVs, which could stabilise or slightly reduce premiums.

Why Do Tax Bands Influence EV and Hybrid Car Insurance Premiums?

VED tax bands categorise vehicles based on emissions levels. Since electric cars produce zero emissions, they have been exempt from vehicle tax. Hybrids, however, still emit small amounts of CO₂ and are taxed accordingly.

Tax bands indirectly influence insurance premiums because:

1. Environmental Benefits: EVs in low emission zones (LEZ) and ultra low emission zones (ULEZ) are favoured, reducing the overall risk for insurers.
2. Perceived Costs: A vehicle with low or no road tax suggests a lower running cost, which can sometimes translate to more affordable insurance premiums.
3. Ownership Costs: Cars with higher road tax may have higher overall costs, increasing risk in the eyes of insurers.

Tax Band Examples for Hybrid and Petrol Cars

Insight: Hybrid cars with low CO₂ emissions can remain in cheaper tax bands, keeping ownership costs low and influencing insurance providers to offer better rates.

Does Vehicle Tax Impact EV and Hybrid Car Insurance for Company Cars?

Yes, vehicle tax directly influences company car insurance premiums through the Benefit-in-Kind (BiK) tax system.

BiK Rates for EVs vs Hybrids

Insight: EVs remain the most tax-efficient option for company car drivers. However, with BiK rates increasing, hybrid vehicles may become more attractive as a balance between cost savings and emissions levels.

How Can Vehicle Tax and Charging Costs Affect Insurance Policies?

Tax policies influence overall running costs and insurance premiums. While EVs benefit from cheap home charging, hybrids balance between fuel and electricity.

Charging Costs vs Tax Savings

The cost of EV charging points offsets tax increases, while hybrids benefit from dual fuel flexibility. This split can affect how insurers calculate policy prices.

Compare Car Insurance

Save up to £523* on your car insurance

Compare Quotes Retrieve Quote

How Can Drivers Lower EV and Hybrid Car Insurance Costs?

Both EV and hybrid drivers can reduce insurance costs by:

• Installing safety features like automatic emergency braking and adaptive cruise control.
• Choosing policies with higher excess.
• Using telematics data to reward safer driving habits.
• Comparing quotes using platforms like Free Price Compare to find the best deals.

FAQs About EV Insurance vs Hybrid Car Insurance