You Must Have It, So Be Smart When You Sign Up
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Millennials, those born from 1981 to 1996, are amongst the top buyers of electric cars in the world.
If you are one of the members of this cohort interested in an electric vehicle, congratulations! You are taking one step towards sustainability!
Now, for your peace of mind, there is one more thing that you should have–electric car insurance. The options abound, but they are not all the same. Read on and we’ll share some tips that will help you save money and make a well-informed decision.
Why Is Insurance for Electric Cars More Expensive?
Car insurance is a must-have. It is not only required by the law, but it is also crucial to prevent repairs from being a financial burden. However, if you have an electric vehicle, you should know that insuring it is going to cost more than a regular car.
The national average for electric car insurance cost is $2,280 per year. However, certain factors will come into play, such as your driving history and experience, as well as the specific brand or model of car that you want to insure.
The high cost of electric car insurance can be attributed that the fact that an electric car is often more expensive than its gas-powered counterpart. Their replacement parts are also more expensive. Not to mention, the components may not be easily accessible. Additionally, fewer mechanics specialize in dealing with the state-of-the-art and complicated systems of electric vehicles.
Tips for Millennials Looking for Car Insurance
Knowledge is power if you want to save money on car insurance. Yes, insurance for electric vehicles is more expensive, but that does not mean that it must be a burden. If you know where to look, you can find a policy that works best for your needs. Below are some of the most important tips to keep in mind.
1. Improve Your Credit Score
Bad credit is one thing holding back many millennials. It can affect many aspects of your life, such as employment and loans. In the same way, it can also be a factor in your electric car insurance. Most carriers will use a credit-based insurance score in determining your premiums if you live in a state that allows it. With such, a lower credit score can make you pay more for the insurance.
So, work on improving your credit score. The results are not evident overnight in your credit report, but the earlier you start working on rectifying your credit history, the better. Within a few months, you might see some changes that will put you in a more favorable light and will make electric car insurance more reasonable.
One of the best ways to improve your credit score is to settle your bills on time and pay off your debts. This will show your financial responsibility. Consolidating your debts might also help. More so, you should take the time to review your credit report. At times, there can be errors, which you must rectify immediately before it impacts your insurance rates.
Improving your credit score is beneficial beyond electric car insurance. It will also be an effective strategy to have more affordable premiums for your life insurance. With a more reasonable rate, you can secure the future of your life insurance plan beneficiary while making the monthly repayments easier on your end.
2. Consider Pay-Per-Mile Insurance
As the name implies, pay-per-mile insurance is auto insurance with premiums based on mileage. Your monthly payments are not fixed. Instead, they are based on how many miles you have driven for a specific period. This is perfect for millennials who work at home or those who do not use their car often. It is also ideal for those who use public transportation to work.
There is a direct relationship between mileage and the likelihood of being in an auto accident. The more frequent you drive, the higher the chance that you will end up in an unfortunate situation, which will make you end up filing an auto insurance claim. Hence, because of the lower risks, the insurance can end up being more affordable.
If you drive a Tesla, then you might want to look at the company’s in-house mileage-based car insurance. No additional device needs to be installed in a car. There is a built-in feature that will calculate your premiums based on mileage. There is also a monthly Safety Score, which will be used for determining your payments. The score assesses your driving behavior based on factors like hard braking and aggressive turning. And if you are keen on this brand, it might make sense to see some statistics and facts about Tesla so you will know how well this company is doing with their sales and other revenue streams.
Aside from Tesla, some major insurance companies also offer this kind of insurance. Most will require the installation of a small device near the steering wheel, which will measure your mileage.
3. Explore Discounts
Do not hesitate to negotiate for a more affordable premium. It would be nice if you can talk to the insurer and ask for potential ways to save money on your premium. Some companies are offering what is known as a green car discount or alternative fuel discount for those who own electric vehicles.
Among others, one of the best ways to have a discount is by bundling your insurance. For instance, if your family has other cars, then you might want to get insurance from the same company and enjoy reduced rates because of having multiple policies. Also, you might want to bundle life and car insurance from the same provider as it can minimize your premium.
Good driving behavior can also make you eligible for discounts. The discounts can vary from one insurer to another. By having a clean driving record, such as having no record of accidents for years, you will be perceived as low risk. The likelihood of filing a claim is minimal, so the insurer might grant you a discount. The same thing is true if you have no violations or tickets.
Taking a defensive driving course is another way to ask for a discount. This is a great way to improve your driving skills and minimize the likelihood of car accidents, resulting in a lower risk for the insurer.
4. Look for Incentives
For years, the government has been active in looking for ways to promote sustainability. Depending on where you live, there can be programs that encourage the purchase and use of electric vehicles by extending tax credits and rebates, among other benefits. The money that you save from such perks can go to the insurance premiums of your electric car.
Through the Federal Tax Credit, you can be eligible for up to $7,500. The credit will be awarded as an automatic deduction on your income tax return on the same year your electric car was purchased. The amount that you can enjoy will depend on the taxes that you are paying annually. Another factor that will have an impact is the size of the car battery.
If you live in California, then you are lucky! It is one of the states with extensive rebates to reward electric car owners. With the California Clean Vehicle Rebate Project, you can get up to $7,000, but take note that this benefit is on a first-come, first-served basis and has a variety of restrictions. Not all EVs are covered.
5. Shop Around
Do not be lazy! Finding the right insurance for your electric car requires time and effort. Look at least three insurers and compare the premiums that they are offering. However, you should not decide based on the price alone. Compare them side-by-side to evaluate the benefits versus the cost of the insurance.
A lot of millennials are tech-savvy, so it is easy to shop around. Gone were the days when you need to physically hop from one office to another and inquire about insurance rates. Instead, you can do so online. You will find several insurance comparison tools. You can also visit the website of the insurer directly, input the required details and, voila, you will see the premium that you will be paying.
When shopping for electric car insurance, many people focus on the big companies. Sure, they have a solid reputation, but this does not mean that you should discount the smaller insurers. There is no harm in getting a quote from less-popular companies, but make sure to read reviews. Learn from the real-life experiences of other people to increase the chances of making a decision you won’t regret.
Conclusion
More and more millennials are deciding to go green and invest in electric cars. If you are one of them, then do not forget your car insurance. It is expensive, but a must-have. Luckily, there are several ways by which you can make the premium more reasonable and save money. For instance, you can improve your credit rating and/or choose a pay-per-mile policy. You should also look for possible discounts and consider rebates or incentives for which you are eligible. Most importantly, shop around and compare your choices thoroughly before you decide.
