How much it costs to insure an electric car in South Africa
Insurance on electric vehicles (EVs) in South Africa is costly compared to cars with internal combustion engines (ICEs), but premiums could decrease due to better safety features that can improve policyholders’ driving histories.
That is according to Ernest North, co-founder of Naked Insurance, an online platform that lets South Africans take out insurance in minutes on their car, home, or other personal items using a mobile app and website.
North said Naked has recently recorded an increase in insurance quotes and policies sold on EVs.
Insurers like Naked take a cluster of variables into account when pricing a car insurance premium.
“These include your age, where you live, the cost of your vehicle and the typical costs of parts and repairs for the make and model you own,” North stated.
He said in the current situation, insuring an electric car can be more expensive than insuring a fuel-powered vehicle of the same value because the costs of spares and parts are higher for the former.
However, premiums might be lower if the data shows that drivers of a particular electric vehicle model have fewer accidents, either because of vehicle safety features or because they are more careful drivers.
Naked calculated the average monthly insurance premiums on popular electric vehicles in South Africa.
The table below shows the average premiums for a 24 and 48-year-old driver, with a R1,500 or R5,000 excess.
Global sales of battery-powered cars, light trucks and commercial vehicles reached 6.75 million units in 2021, 108% higher than in 2020.
Although annual sales of EVs in South Africa are currently only in the dozens of units, North said Naked believes electric vehicles will be the “wave of the future”.
Soaring fuel prices and growing awareness of the environmental impact of fossil fuels are making more South Africans consider the switch from ICE to electric.
AutoTrader’s annual car industry report showed South Africans are increasingly searching for electric cars, with an increase of 110% in 2021 compared to 2020.
North advised car buyers to consider total vehicle ownership costs when deciding whether to go the electric car route.
“Electric cars have fewer moving parts that need to be replaced than traditional cars, so many models may be cheaper to maintain than a luxury vehicle of the same cost,” he said.
In addition, having solar panels for your car charger can further bring down the running costs of your car.
“It’s worth remembering that we’re just at the start of the electric vehicle revolution, and people who get on board now will be paying an early adopter tax,” said North.
“But we can expect to see their running costs compared to ICE cars fall rapidly, especially if the government reviews the import tariffs on electric vehicles or starts to impose stiffer carbon taxes on traditional cars.”
“Within the next two to three years, we are also likely to see prices dropping and more mid-range electric vehicles reach the market,” he added.
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