Australians comparing insurance for low-emission cars are still finding wide differences in quoted premiums, with new research pointing to price gaps running into the thousands. Compare the Market’s latest hybrid and electric vehicle insurance index shows that average premiums have held steady since March, yet the variation between insurers remains a major point of concern.
The bi-annual index examined 20 popular battery-electric and hybrid models across 12 insurers and six underwriters. While the overall reduction across the market was small, the spread between the cheapest and priciest policies was far more striking. The BMW iX1 showed an average gap of up to 3,605 dollars, the Tesla Model 3 up to 2,509 dollars, and even a mass-market model like the Toyota RAV4 Hybrid recorded a difference of up to 1,698 dollars.
Quoted premiums for battery-electric vehicles averaged 2,126.71 dollars in September, compared with 2,134.26 dollars in March. Hybrids and plug-in hybrids averaged 1,623.43 dollars, also steady.
Compare the Market’s Economic Director David Koch said the findings highlighted the need for drivers to be vigilant, especially as the federal government works through plans for a road user charge for electric vehicles.
“It’s just shocking—the quoted premium differences between insurers for a similar car insurance policy can be thousands for some models,” Mr Koch said.
“There can be a variety of risk-based reasons behind the big price discrepancies—including the higher cost for labour and specialised parts on electric vehicles—but it wouldn’t surprise me that their bottom line is another driving factor.
“This is exactly why shopping around is so important because Australians could be pouring thousands more on their bills than necessary.
“With electric car insurance costing around 2,100 dollars on average and hybrid car insurance at about 1,600 dollars on average, it still isn’t cheap with quoted premiums remaining steady compared to six months ago.
“Plus, with the government planning to impose a road user charge for EV owners in lieu of fuel excise tax, the potential charging cost savings today are being diminished. For now, the power is in consumers’ hands to shop around for insurance and other household bills.”
The index compared entry-level variants, based on quotes for a 34 year old male in Brisbane with a clean record and standardised policy settings. The exercise showed how heavily location, model type and insurer-specific risk factors continue to shape premiums. As more Australians weigh the switch to electric and hybrid vehicles, the cost of insuring them is proving to be just as important as upfront purchase prices.
The debate over a road user charge has added another layer to the transition, with many drivers reassessing running costs in a market still finding its feet. For now, the research suggests careful comparison may offer more savings than many realise.
Source: Compare the Market
Disclaimers from release retained below: Always read the Product Disclosure Statement (PDS) and Target Market Determination (TMD). Comprehensive car insurance policies quoted across 12 insurers and six underwriters for 10 BEV models and 10 HEV/PHEV models. Quotes were based on a 3 September 2025 commencement date and averaged for each model. Assumptions and policy settings applied as per release.
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