Not all EVs are created equal in the
eyes of insurance and buyers should consider upfront costs as well
as repair costs when buying a new vehicle
LOS
ANGELES, June 29, 2023 /PRNewswire/ -- Battery
electric vehicles (EVs) have gained popularity in recent years with
market share rising from a low single digit to 8% of new vehicle
sales in the first quarter of 2023. Propelling this growth are more
available EV products being chased by more buyers looking to enjoy
the cost efficiencies EVs promise. As consideration grows for EVs,
Mercury Insurance (NYSE: MCY) has some advice on the insurance
implications between EVs and Internal Combustion Engine vehicles
(ICEs), an important factor in the "total cost of ownership"
equation.
"A vehicle's cost goes beyond the purchase price. What we're
finding is that the added technology in EVs that make them
appealing is also making some of them more expensive to repair,"
said Chong Gao, Mercury Insurance
Director of Research & Development. "Mercury has been named as
one of the most affordable insurers of EVs in the marketplace
because of our focus on researching and understanding the subject
of EV cost and repair. We strongly advise consumers to do the same
as they consider investing in this new category of
transportation."
Chong advises that the best way to determine whether to purchase
an EV or ICE vehicle is to look at the entire picture – the "total
cost of ownership." Insurance premiums are an important factor.
Buyers need to research the manufacturer's suggested retail price
(MSRP), fuel economy, repair costs, necessary infrastructure for
home charging and other factors before making a decision.
Chong gives three examples of how the total cost of ownership
might come into play:
- Going electric costs more to insure: The Chevrolet Bolt
EV is a small, electric hatchback starting at $26,500 and has a range of about 259
miles[1]. A comparable ICE vehicle, such as the
Chevrolet Trax, comes in at $20,400.
The Trax has a 14 gallon gas tank, and returns a combined fuel
economy of 30 mpg[2] – which translates to roughly 420
miles on a tank. The Trax is 73% as expensive to insure as the
Bolt.
- Savings get a charge: The Nissan LEAF is a small,
electric hatchback that starts at an MSRP of $28,040, and an EPA-estimated range of 212
miles[3]. The closest match from Nissan is the compact
Sentra sedan which starts at $20,050.
The Sentra's combined fuel economy is 33 mpg with a 12.4 gallon
tank[4], which gives drivers around 409.2 miles between
fill-ups. The price difference of $7,990 and nearly double the driving range make
this a close comparison. The cost to insure the Sentra is 115% the
costs of the electric LEAF.
- Comparing apples to apples: The 2023 Volvo XC40
mild-hybrid and its EV counterpart, the XC40 Recharge, have the
exact same insurance costs. The ICE version of this vehicle has a
MSRP of $36,350 while the EV version
starts at $53,550 – a difference of
$17,200. The mild-hybrid version gets
26 mpg in combined city/highway driving, with a 14.2 gallon fuel
tank[5], which should give drivers a range of about 369
miles. The Recharge model has a 223 mile range[6].
Gas prices vary by location, and public charging can be a bit
erratic in these early days. EV owners who are also homeowners can
opt to install their own chargers, but they can be expensive when
you include installation costs.
When the time comes to shop for the next new vehicle, Mercury
Insurance experts recommend considering all aspects of your
purchase. Factor in the MSRP, the driving range and what's needed
in order to optimize your experience. A more knowledgeable
understanding of the total cost will reduce surprises and make for
a more positive ownership experience.
About Mercury Insurance
Mercury Insurance (NYSE: MCY)
is a multiple-line insurance carrier predominantly offering
personal auto, homeowners and renters insurance through a network
of independent agents in Arizona,
California, Georgia, Illinois, Nevada, New
Jersey, New York,
Oklahoma, Texas and Virginia, as well as auto insurance in
Florida. Mercury writes other
lines of insurance in various states, including commercial,
business owners and business auto, landlord, home-sharing,
ride-hailing and mechanical protection insurance.
Since 1962, Mercury has provided customers with tremendous value
for their insurance dollar by pairing ultracompetitive rates with
excellent customer service. Mercury has earned "A" ratings from
A.M. Best and Fitch, as well as "Best Auto Insurance Company"
designations from Forbes and Insure.com. For more information visit
www.MercuryInsurance.com or follow the company on Twitter or
Facebook.
[1] https://www.chevrolet.com/electric/bolt-ev
[2] https://www.chevrolet.com/suvs/trax
[3] https://www.nissanusa.com/vehicles/electric-cars/leaf.html
[4] https://www.nissanusa.com/vehicles/cars/sentra.html
[5] https://www.volvocars.com/us/cars/xc40/
[6] https://www.volvocars.com/us/cars/xc40-electric/
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SOURCE Mercury Insurance