Could Green Vehicles Reduce Your Insurance Bill?

Green Insurance

The obvious incentive to encourage green car adoption in recent years has obviously been potential fuel savings. This has become an increasingly attractive feature to motorists at a time when fuel prices are continuing to rocket.

However, it now appears that green cars could also bring an insurance saving as well, with price comparison website MoneySupermarket claiming that many insurers will offer a discount of up to 5% off the total price of annual premiums to anyone who is looking for cover on a vehicle deemed to be environmentally friendly.

Potential insurance savings

According to the latest figures released by the AA, the average British motorist is now spending £921 per year on their annual car insurance premiums. However, this is a figure which has been distorted somewhat by the high prices which afflict younger motorists who are deemed to be a higher risk by insurers.

For example, an 18 year old male motorist who owns a basic 1.2 litre Vauxhall Corsa would not find car insurance premiums for less than £4,600 using MoneySupermarket. It is thesGreen Insurancee groups who would have the most to gain through green car ownership, with this 18 year old driver standing to shave up to £230 off the cost of their cover.

Another group which may also be keen to take advantage of the potential savings possible through green car ownership is female motorists who are set to see their price rises by approximately 30% in December this year. This is due to a change in insurance regulations which is being enforced by the ECJ (European Court of Justice), who has ruled that by 21st December 2012 it will be illegal for insurer to discriminate on the grounds of gender. Adopting a green car would therefore obviously limit the damage of this regulation change for female motorists.

Green car options

The most widely adopted environmentally friendly car on the market is of course the Toyota Prius which on average consumes 65.7mpg, costing the typical motorist about £850 per year to refill calculated based on fuel prices at their current rate.

This compares favourably with a basic Vauxhall Corsa which consumes 42mpg on average, which would cost the same driver about £1,330 per year on average; a saving of about £500 per year.

Tax is another area where savings would be made, with environmentally friendly vehicles being exempt from road tax charges; adding another £100 to the potential annual motoring cost savings.

For an 18 year old male driver, opting for a Toyota Prius rather than a Vauxhall Corsa therefore reduce their total annual motoring expenditure by £1,680; a figure which would increase further if the motorist regularly drives in areas covered by congestion charging.

It also isn’t too expensive to get hold of a Prius nowadays, with high quality and low mileage versions now regularly available for about £8,500.

Potential business savings

When you consider that these potential savings are available by running just one green vehicle, the potential benefits to business owners operating a business fleet is obvious.

This could well be the answer to the problems which are currently being faced by the majority of SME’s who are regularly citing rising motoring costs are being a threat to their business operations.

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