Insurance Company Claims Electric Cars Are Cheaper to Own

2015 BMW i3 (Credit: BMW)

It’s no secret that there is considerable controversy in the automotive industry when it comes to electric cars. There is a dedicated core of fans who thrown their undying support behind models like the Nissan Leaf or BMW i3, while there are plenty of others who are constantly trying to discredit the technology and its practicality, often citing the high purchase price of such vehicles as a big turn off.

Cue Coverhound Insurance, which has stepped into the fray by declaring the electric vehicles are cheaper to own. The company, which has sold about 20,000 policies for automobiles, claims that insuring an electric car is about $200 less than insuring a vehicle with an internal combustion engine. On top of that, the money saved by using electricity instead of fuel to get around makes electric models that much cheaper to own.

Speaking to The Los Angeles Times, CEO Keith Moore said that much of the insurance savings likely comes from the fact that owners of electric vehicles aren’t as prone to accidents or tickets because they are “more responsible.”

Just how much does it cost to “fuel” an electric car? Coverhound estimates that a Nissan Leaf uses about $300 of electricity every year, for the average owner. For comparison, the company says a Toyota Corolla runs the average driver $1,675 per year in fuel.

Does this mean that car shoppers will be flocking to electric vehicles? Likely not, but it does signal that an increasing number of people are recognizing the cost benefit of electric drivetrains. The news that the cost of oil is going down might work against the electric car movement temporarily, but history has shown that the cost of oil will always go up, and often painfully so, which no doubt will fuel the demand for cars like the Leaf and Model S.