In addition to all of this, benefits also extend to a corporation tax relief on electric cars. Tax relief deductions vary and fluctuate, but may include exemptions from fuel duty, company car tax, vehicle excise duty, van benefit charges and fuel benefit charges. A 100% first-year allowance3 also means that companies may claim the entire cost of an electric vehicle against taxable profits in the same year as the purchase.
Is Electric Vehicle Insurance More Expensive?
Electric vehicles are, broadly speaking, more expensive to insure than conventional vehicles, however are often less expensive than people think. Research carried out by Autocar in 20234 found that, for cars, electric vehicles were between 10% and 20% more expensive to insure than their petrol-based equivalents, far from the figures commonly quoted in the media.
There are good reasons for this variation. Not only do electric vehicles typically have a higher initial price, but they are more also expensive to repair, while spare parts cost more, too.
It should be added that while premiums have increased, this has also been the case for petrol and diesel vehicles, although to a lesser extent. In contrast, petrol and diesel vehicles do not share the ongoing savings that can be made from owning an electric vehicle.
Choosing the Right Electric Vehicle Insurance Policy
There are several different factors that you should take into account when looking for the right electric vehicle insurance policy to match your needs:
- Do you own or lease the battery inside your vehicles? It’s commonplace for an electric vehicle owner to buy the vehicle but to lease the battery from the manufacturer.
- How do you charge your vehicle/s? You may have your own charging points installed at your business premises, but do you need to use a cable on a pavement or from a public charging point.
- How many vehicles do you operate? With fleet insurance policies, one premium, one renewal date and one flexible policy may cover all your vehicles resulting in a saving.
What Does Electric Vehicle Insurance Cover?
Typically, electric vehicle insurance comes with these levels of coverage:
- Third party only: This is the minimum level of cover you’ll need for an electric van to make it road-legal. Although your van itself won’t be covered for collisions, theft or fire damage; it will provide cover so you can drive your vehicle legally.
- Third-party, fire and theft: This policy also covers other road users for collisions where you’re to blame as well as covering your van for theft and fire damage.
- Fully comprehensive: This full coverage insurance keeps you covered for collisions where you’re at fault, in addition to fire and theft cover.
- Breakdown cover: This is typically an add-on which covers you if you break down, however, you may also have this covered by your bank.or under other policies. Should your battery run out while you’re on a job, for example, you can be taken to the nearest charging point to ensure that you’re back up and running as quickly as possible.
Are Electric Van Batteries Covered by Insurance?
Your battery may be leased from the vehicle manufacturer, and if you own the battery you will not ordinarily be covered for ordinary repair work. However, the battery can be covered if you are involved in an accident which damages it.
What Happens if I’m Leasing the Vehicle’s Battery?
Batteries are the single most expensive component of an electric vehicle, which is why many owners lease their batteries. You need to be sure that your electric vehicle insurance will cover your battery, whether leased or owned. It’s therefore important to check whether your insurance covers you should your electric vehicle battery experience a fault or failure. You should also check with your manufacturer, as some will replace or repair your battery for no charge should it develop any issues outside of your control.
What Happens if Someone Trips Over My Charging Cable?
If you need to use a cable on a pavement or you change your vehicle from a public charging point, you could be held liable for it should someone trip over it. In this case, you should look into covering this on your insurance.
Does Electric Vehicle Insurance Affect Your Fleet?
There are fleet insurance options which are designed for businesses that operate multiple vehicles. The higher the number of vehicles, the greater the amount of the premium can be saved. Bear in mind that there may be specific requirements for electric vehicle fleet insurance, such as the types of vehicles covered and the minimum number of vehicles needed to qualify for a fleet policy.
While insurance for electric vehicles remains more expensive for other types of vehicles, the various incentives to make that switch coupled with the cheaper running costs continue to make them an attractive option for businesses. At Tradex, we offer a variety of options for the environmentally conscious business owner who’s looking to reduce their carbon footprint and lower the running costs of their fleet. Contact us for a quote today, to discover how much you could save.
1 https://www.zap-map.com/ev-stats/ev-market#:~:text=As%20of%20the%20end%20of%20February%202024%2C%20there%20were%20around,cars%20and%20620%2C000%20PHEVs%20registered.
2 https://www.gov.uk/plug-in-vehicle-grants/vans
3 https://www.gov.uk/capital-allowances/business-cars
4 https://www.autoexpress.co.uk/news/361588/why-electric-car-insurance-so-expensive-ev-vs-ice-cost-analysis