Everyone buys a Tesla – but are they willing to pay for the insurance?

Everyone buys a Tesla – but are they willing to pay for the insurance?

If you feel like you suddenly see that shiny metallic “T” all over the road, make no mistake. Electric vehicle sales are skyrocketing and Tesla is in the lead.

Electric vehicle sales in the US nearly doubled in the first quarter of 2021 compared to the same time last year, says a new Experian report, with Elon Musk’s auto company holding a 71% share.

Tesla also recently announced that it has doubled its global production and shipped more than 200,000 cars in the second quarter, up from 90,000 a year ago.

But while many Americans have decided that a Tesla is worth the high sticker price, they may be shocked if they try find affordable insurance for these technological and environmental marvels.

Why do Teslas cost more to insure?

two men up close, with clipboard and pen, two cars in the background

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While you’re going to save about $250 a month on gas, any electric vehicle will generally cost you more to insure.

Why is that? Auto insurance companies come up with rates based on a whole host of factors. So even if you have an impeccable driving record, live in a low-crime area, and take advantage of some driving discounts, your rate is likely to increase compared to your gasoline-powered car.

That’s because electric vehicles cost more and are more expensive to repair. The insurance company may consider you low risk to make a claim, but if something happens to your car, it means expensive repairs. So your premiums will be high to reflect that risk.

If your premium with a gas-powered car is $1,000 a year, you’ll likely pay between $1,180 and $1,320 with an electric car, according to ValuePenguin. As a luxury car, Teslas are even more expensive.

Motorcycle trend recently graduated how much it would cost each year to insure the various Tesla models available. These averages assume, among other things, that the owner is a single 40-year-old male with a clean criminal record and: good credit score:

  • Tesla Model 3: $2,114-$2,351

  • Tesla Model S: $3,673-$4,143

  • Tesla Model Y: $2,118-$2,227

  • Tesla Model X: $3,355-$4,025

Of course your rates will vary from insurer to insurer – that’s why you should always compare quotes from multiple insurers.

How do other costs compare?

Tesla Model S while plugged in and charging at Supercharger.

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Most electric cars are generally more expensive to buy than standard cars. And if they’re damaged, it can be harder to find a mechanic qualified to fix them — in addition to needing more expensive and harder-to-find parts.

Damaged batteries can also add to your repair costs. If your battery is leaking, your mechanic will need to take extra precautions, which will be reflected on your bill.

There is also a need for a charging station. You should expect to pay anywhere from $200 to $1,000 to install your own charging station before you hit the road.

Still, you can expect your new car to have less maintenance costs overall.

Reducing exhaust emissions protects both the environment and the interior of your car because no chemicals seep in. And electric cars don’t need frequent oil changes or radiator hoses, fan belts, or gaskets either.

So even with a slightly higher insurance policy, your car budget doesn’t have to change drastically.

Where do I go from here?

Father with son and dog looking from the car window

Soloviova Liudmyla / Shutterstock

If you buy a Tesla or any other EV and start switching your insurance policy, don’t forget to ask your insurer if there are any promotions or discounts you can take advantage of to lower your costs.

You may be able to bundle your other policies, such as: home insurance or life insurance.

Insurance companies often give discounts to safe drivers with clean records. Don’t be afraid to ask if you missed something in your own research.

But your best option for finding savings when shopping for auto insurance is to shop around for rates. The Insurance Information Institute recommends that you obtain at least three quotes before making an offer.

Some studies show that shopping around can saves you up to $1,100 per year on car insurance.

Once that’s done, you’ll feel all the power of sitting in the driver’s seat, even when you’re not behind the wheel.