What to consider before buying an electric vehicle

Electric vehicles (EV) are more sustainable, less noisy and more affordable to run as time goes by – so it’s really no surprise they continue to gain popularity year on year. 

In fact, EV registrations increased by a whooping 62.3% between January 2020 and January 2021, adding up to 23,000 registrations Australia-wide.

While cheaper in the long run, switching to electric mobility can initially be a costly affair as electricity-fuelled cars usually come with a higher price tag than petrol cars.

Unfortunately, this also means that when you’re researching car insurance, your electric vehicle insurance premium will be higher. Here’s what you need to know about electric vehicles and car insurance.

What are electric vehicles?

Electric vehicles are cars powered with electricity instead of gas engines (such as petrol or diesel). They’re either fully battery-powered or partly, meaning the other part of the engine generates power from sources such as fuel or hydrogen.

This makes EVs much more energy-efficient and environmentally friendly than regular cars. There are also Light Electric Vehicles (LEV) like scooters, bicycles or tricycles, but for the purpose of this guide, we’ll be focusing on the four-wheeled versions.

What are the different types of electric vehicles?

Believe it or not, but not all electric cars are the same. Just like there are different types of fuel for regular car engines, there are differences in how electric vehicle engines are powered.

At the moment, we differentiate between four different types of EV:

1. Battery Electric Vehicles (BEV)

BEVs run solely on electricity, so how far they can get you with one charge depends entirely on the charging capacity of your car’s battery.

This also means they produce no greenhouse gas emissions, which makes them much more environmentally friendly than their gas-fuelled counterparts.

2. Hybrid Electric Vehicles (HEV)

HEVs are cars that draw from both an electric-powered battery and a fuel tank.

There are two types of hybrid engines: one is a parallel hybrid that allows both motors to power the car independently.

The other one is a series hybrid, where the fuel engine acts as a charger for the electric battery, which powers the motor.

Though not entirely battery-powered, HEVs are still much more fuel-efficient than regular cars, taking some pressure off your wallet in the face of rising fuel prices.

3. Plug-in Hybrid Electric Vehicles (PHEV)

PHEVs are too powered by fuel and electricity. It charges the battery directly by plugging it into a power outlet as well as through regenerative braking.

PHEVS are solely powered by electricity until the combustion engine kicks in. This enables the car to have a greater range.

4. Fuel-cell Electric Vehicles (FCEV)

FCEVs use compressed hydrogen and oxygen pulled from the air, generating electricity in the car’s fuel cell.

As part of the process, FCEVs emit evaporated water (water vapour). And while they do have a greater range than battery-powered EVs, public hydrogen fuel stations are currently not very common in Australia.

Is car insurance expensive for my electric vehicle?

Getting car insurance for your electric vehicle is the same process you’d follow for a gas car, but electric vehicle car insurance comes at a premium.

This is because of large demand, a small amount of vehicles available as well as electric vehicles using relatively new technology.

 Our team atCompare Club can help you find better value car insurance for you within a matter of clicks.

What’s the best electric vehicle for me?

From Tesla to Kia, there’s an increasing number of electric cars to choose from. One of the first things to consider is your budget. EVs are often more expensive to purchase than regular cars, so the upfront investment tends to be more expensive.

However, there are loans specifically designed for electric vehicles to help you absorb some of the upfront costs initially. You should also think about how you’re planning on using your EV. Is it going to be your main mode of transportation? If so, how many kilometres are you planning on travelling a day?

Different makes and models have different ranges, depending on the engine type and battery capacity. If you only commute locally, almost any model should suffice. If you drive a lot, you should make sure to choose a model with sufficient range. However, if you exceed 200 km a day on a regular basis, a fully battery-powered EV may not be able to meet your needs at this point.

How do I maintain my electric vehicle?

EVs require much less maintenance than other cars simply because there are fewer mechanical components that need regular servicing. But there are still things you and your mechanic should keep an eye on, including your tire profiles, tire air pressure, air cabin filters, wiper blades and washer fluids – and, of course, your car battery.

As batteries naturally degrade over time, there may be a slim chance your car battery might need replacing at some point down the track. However, it’s unlikely. Usually, plug-in car batteries are covered separately by an extensive warranty, which covers all kinds of potential issues, including excess loss of range.

Why should I drive an electric vehicle?

It’s quite simple: EVs are both better for the environment and your wallet.  While the initial purchase may be a little more cost-intensive, the ongoing usage costs speak for themselves. Charging most models can cost you as little as $500 or $600 a year. 

For comparison, in 2022, the average annual fuel spend in Australia was $4,881, an increase of 40% as fuel prices skyrocketed.   The high fuel prices are set to stay that way for the foreseeable future due to current global events, including inflation.

What do I need to consider before buying an electric vehicle?

There are a few things to consider before purchasing an electric vehicle, including:

• How much you’re willing to spend

• Potential maintenance costs

• Whether you may need to install any charging facilities

• If there’s sufficient EV infrastructure in your area (e.g. public charging stations)

• How you’re planning on using your EV, and as a result, how great its range should be

• Whether you want to buy a new car or a used one (if the latter, check how much you may need to invest to bring it up to scratch, e.g. battery health, and if the firmware/software requires updating)

How do I get car insurance for my electric vehicle?

Getting car insurance for your electric vehicle is the same process you’d follow for a gas car, but  as long as you’re aware about the difference in premium, you won’t get a shock after comparing car insurers.

Our team at Compare Club can help you find better value car insurance for you within a matter of clicks.

Getting an electric car is a great investment in a greener future, so make sure to compare your options to get the insurance to match those needs.

Paul Coughran is the General Manager of Emerging Verticals at Compare Club. Paul has over 20 years of experience across a wide range of industries including Banking and Finance, Telecommunications and Energy. Paul leads a team of trusted experts dedicated to helping individuals make informed decisions about their insurance and utilities needs.

Meet our car insurance expert, Paul Coughran

Paul's top car insurance tips

• 1

  Regularly compare your insurance policies – You could be paying for cover you don’t need. Shopping around every so often can save you a fair bit, maybe even hundreds each year.

• 2

  Don’t just look at the premium—check the excess too. While a higher excess might bring down your premium, remember you’ll have to fork out more if you do need to claim.

• 3

  Double-check what’s included in your policy. Extras like windscreen cover or roadside assistance might not be part of the deal and could cost you more.

• 4

  If you don’t drive much, consider usage-based insurance. Some policies base your cost on how much you actually drive, if you work from home or only use your car for short trips this might be a much better option.