If you seem to see more of that shiny metal “T” on the road, you’re not wrong. EV sales are soaring, and Tesla is leading the pack.
Over the past five years, registrations of electric vehicles have increased by 250%, according to Experian. And although the broader auto market struggled over the course of the year, registrations rose a staggering 60% in the first three months, says Automotive News.
And Elon Musk’s automaker is doing strong: In the third quarter, it sold 42% more vehicles than in the same period in 2021. The company delivered 343,000 cars globally in the third quarter of 2022.
But even though many Americans have decided that a Tesla is worth the high sticker price, they may face a challenge when it comes to finding affordable insurance for these technological and ecological marvels.
According to analysis by ValuePenguin, the average cost to insure a Tesla is $3,947 a year, but how much you’ll pay depends on other important factors.
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Why do Teslas cost more to insure?
While you’ll save hundreds a month on gas, any electric vehicle will generally cost you more for insurance.
Because? Auto insurance companies work out rates based on a whole range of factors. So even if you have a spotless driving record, live in a low-crime area, and take advantage of some driving discounts, your rate is still likely to go up compared to your gas-powered car.
That’s because EVs cost more and are more expensive to repair. The insurance company may think you have a low risk to file a claim, but if something happens to your car, it will mean costly repairs. So your premiums are high to reflect that risk.
If your premium with a gas-powered car is $1,000 a year, you’ll likely pay $1,250 with an equivalent electric car, according to ValuePenguin. As a luxury car, Teslas are even more expensive.
ValuePenguin looked at how much it would cost to insure the various Tesla models available each year. Among other factors, these averages assume the owner is a 30-year-old man with a clean criminal record and good credit score who lives in Texas:
Tesla Model 3: $3,386
Tesla Model S: $4,956
Tesla Model Y: $4,275
Tesla Model X: $3,057
And other automakers, including Chevrolet and Ford, are giving Tesla a run for its money in the EV market, so keep in mind the potential for higher insurance costs across brands.
Of course, your rates vary from insurer to insurer, which is why you should always compare quotes from multiple insurers.
How do other costs stack up?
Most electric cars generally cost more than standard vehicles. And when they’re damaged, you may have a harder time finding a qualified mechanic to fix them, as well as requiring more expensive and hard-to-find parts.
Damaged batteries can increase repair costs. If your battery is leaking, your mechanic will need to take extra precautionary measures, which will be reflected in your bill.
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There is also a need for a charging station. You should expect to have to pay somewhere between $200 and $1,000 to have your charging station set up before you hit the road.
However, you can expect your new car to incur lower overall maintenance costs. Also, electric cars don’t need frequent oil changes or replacement of radiator hoses, fan belts or gaskets.
So even with slightly higher insurance, your car budget shouldn’t change drastically.
Where do I go from here?
If you buy a Tesla or other electric vehicle and start the process of converting your insurance policy, don’t forget to ask your insurer if there are any promotions or discounts you can take advantage of to reduce costs.
And if you haven’t checked out your insurer’s options lately, you could be overpaying up to $500 a year on this essential policy.
Your best chance at finding savings on your auto insurance is to spend some time shopping and comparing offers.
Typically, this could mean setting aside hours, or even an entire day, to call several insurers just to give them your details to get an accurate quote. But in just three minutes you can find the best deals on auto insurance, all in one place.
Don’t wait – give your budget some breathing room and stop paying too much for insurance right now.
This article provides information only and should not be construed as advice. Comes without warranty of any kind.