How electric vehicle insurance compares to gasoline-powered vehicles

As Canada's electric vehicle industry grows, more Canadians are making the switch to electric in hopes of saving on fuel and insurance costs.

However, the total costs all depend on how much you drive, what vehicle you purchase and where you charge your car, to name a few factors.

Before you make the switch, here are some price factors to consider.

HOW MUCH IS INSURANCE?

Similar to gas-powered vehicles, insurance rates for electric vehicles will vary depending on the person's driving history, location, age and whether they buy a luxury or standard vehicle model. Depending on these variables, insurance for EVs can save you a bit of money.

According to a 2022 report by auto insurance company Ratesdotca, insurance rates for a 35-year-old man living in Toronto, Ont., with a clean driving record would be cheaper if the driver purchased an electric vehicle versus gasoline.

The average cost for the most expensive EV, a 2017 Tesla Model S, would cost $200.42 per month to insure. The least expensive EV, a 2019 Kia Niro, averages about $165.92 per month to insure.

By comparison, the most expensive gasoline-powered vehicle to insure, a 2022 BMW M340i, averages roughly $231.75 per month.

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Qui Trieu, an AVP National Underwriting for Aviva Canada, told CTVNews.ca while there are possibilities for savings, there are still other factors like part replacements that will affect insurance premiums and overall spending costs for an electric vehicle.

In the event of an accident and your EV's battery is severely damaged, you could be set back thousands of dollars if your insurance won't cover it. However, Trieu says, as the industry grows, so will the accessibility to essential parts.

"Since EVs are still new to the market, we’re still in the transition period, not only in adoption, but overcoming challenges impacting both the industry and customers related to available vehicle supply and skilled labour. EVs are built differently than gas vehicles and sometimes can be more expensive to repair, which can impact premiums," Trieu said in an emailed statement Wednesday.

WHERE CAN I SAVE ON MONEY?

While there are some savings benefits with overall fuel costs and insurance premiums, the total sole cost of an EV is still fairly expensive in comparison to gas-powered vehicles.

According to the Canadian Automobile Association, electric vehicle models from 2022 and 2024 range from $38,198 to $212,500 in price.

The federal government offers a $5,000 purchase incentive for vehicles with an electric range over 50 kilometres and $2,500 for plug-in hybrid vehicles with an electric range under 50 kilometres. Additionally, Trieu says drivers should also look into different incentives each province offers and discounts various insurance companies have, which can go a long way in saving money.

With gas prices soaring in the last year, electric vehicle owners can also save on fuel costs as they no longer have to rely on paying at the pumps if they're able to charge at home or at their nearest charging station.

• Does buying an electric vehicle make financial sense?

Depending on the size of the vehicle and the amount of distance you're driving, that will vary the costs to charge an EV. For example, Canada's 2023 Fuel Consumption Guide found the annual charging cost for the owner of a Tesla Model S vehicle is $525 per year. Compared to a Honda Civic, for example, annual fuel costs can reach $1,775.

WHO WOULD BE A GOOD CANDIDATE?

Brian Kingston, president of Canadian Vehicle Manufacturers’ Association, says Canadians considering the switch to electric need no convincing when it comes to savings, but the lack of charging stations make it difficult to make the plunge.

"Survey after survey shows that the biggest concern that Canadians have when it comes to making the switch to an electric vehicle is the ability to charge and the price of these new vehicles," Kingston told CTVNews.ca in a phone interview on Wednesday.

Canadians should consider several factors before purchasing an EV, Kingston explains, but evaluating how accessible charging a vehicle is should be top of mind, whether that's at their home, their workplace, or a nearby charging station.

Additionally, Kingston says Canadians should look at their driving patterns and consider how often and how far they drive to figure out whether an electric vehicle is right for them.

"It's really important that you look at your driving patterns, and determine if you've got the charging infrastructure to facilitate it. The one unique thing about Canada is that we've got a 1.1 million kilometres of two lane public road, we've got a cold climate and Canadians drive long distances,” he said.

“It's not out of the question for somebody to drive 800 kilometres over a weekend to visit family or go across the province, so if you do that regularly, it's important that you make sure that you've got access to charging infrastructure."