Green Car Insurance

Compare green car insurance policies & deals

If you've chosen a car that's kinder to the environment you could benefit from cheaper car insurance. Read on to find out more.

Electric car charging whilst parked on street

What makes a car ‘green’?

A vehicle is considered green if it is environmentally-friendly, producing fewer harmful fumes by using less petrol or diesel than conventional cars, by being a hybrid that combines electric and oil-based power sources, or by using renewable sources such as bio-fuels.

The recent announcement of plans to ditch the sale of new petrol and diesel vehicles in 2040, together with the wider choice and greater availability of eco-friendly alternatives, has made going green a much easier choice.

The government is even offering a grant that pays for 35% of the purchase price of cars that produce low CO2 emissions, up to £4,500 for some cars – based on a sliding scale of how much CO2 your car produces. 

What would it take for you to make the switch to a 'green' vehicle?

MoneySuperMarket survey data. Correct as of July 2017.

Is car insurance cheaper when you go green?

If you are environmentally-conscious, one way to do something for the planet is to go green and get behind the wheel of an eco-friendly vehicle.

This way, you can gain brownie points with eco-warriors and enjoy the savings gained from having an eco-car, such as reduced road tax, cheaper fuel, and using less fuel generally.

But another bonus is cheaper car insurance, as some providers offer lower premiums to green vehicle owners. The main reasons being that eco-cars are smaller and less powerful – and therefore safer.

You can expect a discount of up to 5% off car insurance premiums with some providers if you own a green car. But in addition to this reduction, some insurance companies will offset the pollution caused by your car with schemes such as planting trees or contributing to environmental charities’ coffers – which means you can really start to polish your halo. 

UK charging points table

MoneySuperMarket survey data. Correct as of July 2017.

Fuel efficient cars

There are various green options available when looking at a new car. Ecologically-sound cars are either hybrids of petrol and electric, fully electric, use bio-fuels, or the experimental forays into using hydrogen fuel cells.

As the ban on the sale of conventional cars does not come in until 2040, fuel-efficient petrol and diesel cars are still seen as economically reliable because you are able to travel further for the amount of carbon-based fuel you use.

But older internal combustion engine vehicles are causing major problems such as air pollution in large cities, hence the ban.

For example, diesel-powered vehicles are thought to cause 40% of London’s transport pollution, or 20% of all air pollution in the city, according to the Mayor of London’s office.  

That said, there are plenty of economical options to pick from, plus they are no longer considered impractical – you can get either petrol or diesel fuel-efficient green cars, with the diesel being more expensive to run overall.

Hybrid engine cars

Hybrid engine vehicles have both a conventional yet smaller fuel engine (petrol or diesel) which runs alongside an electric battery-powered engine.

Having two engines creates efficiency as the electric motor runs at certain points of a journey, meaning the fuel-guzzling conventional engine is not in constant use.

Hybrid cars use less fuel and therefore produce less pollution. Plus, many of these hybrids have regenerative braking, which means that when you brake, the battery which powers the electric engine is partially recharged – a process that also reduces wear on the brakes.

However, hybrid cars have some drawbacks such as more technical engines, resulting in higher repair costs should they break down. Also, they are often more expensive to buy than conventional cars, but perhaps not as expensive to buy and run as a diesel car.  

Running cost overlifetime

MoneySuperMarket survey data. Correct as of July 2017.

  1. The average fuel cost for electric cars is £384 per year, whereas both petrol and diesel come to around £700 annually.
  2. While electric car owners have the highest average insurance premium (at the moment), they can save money from paying little or no road tax.
  3. The cost of MOTs and servicing over the lifetime of an electric car is around half the cost of both petrol and diesel vehicles.

Full electric cars

Full electric cars are wholly powered by electric motors, and with more car manufacturers bringing these to market, the fully electric car seems to be the future of motoring.

Electric engines store energy in rechargeable batteries which you lease from the car manufacturer. These are more efficient than conventionally-fuelled engines, which produce neither unhealthy noxious fumes nor noise, so don’t contribute to air pollution or noise pollution.

Much like hybrid engine cars, they have regenerative braking, so are more fuel and brake efficient.

Electric-only engines have certain problems as their batteries can only travel so far before needing a full recharge, which can take time on some models. Also, the battery’s life can also be short, which means you would have to replace the battery more often.

Also, when you look at how few charging points there are across the UK relative to potential customers, this will need to be addressed before the electric car revolution truly begins.

Alternative fuel

There are several different alternative fuel systems that are used across Europe as a more ecologically-friendly energy source for conventional engine cars.

For example, biofuels such as biodiesel are made from plant-based oils (palm, rapeseed and sunflower) mixed with diesel, making a lead-free fuel, which is much better for the environment.

Bioethanol, where petrol is mixed with ethanol made from distilling grains and cereals such as corn and wheat, cuts down CO2 emissions.

Hydrogen-fuelled cars

Still rare on UK roads, hydrogen-fuel cell cars create zero emissions, burning hydrogen to create just oxygen and water. However, the lack of infrastructure in the UK is causing some problems.

There are only four public access refuelling stations in the country. This is set to change in the future with the opening of more facilities.

There are only three fuel cell vehicles (FCV) available on the market at the moment, but again, with greater investment, this could change to include most manufacturers before the petrol and diesel ban comes into effect.

As with electric cars, the range on hydrogen-fuel cell cars is limited, but as they are still in their infancy, you should expect this to change as the cells become more technologically advanced. 

How to save on your car insurance

When choosing a green vehicle, drivers should pay attention to the car insurance group ratings of each car to ensure they are getting the cheapest possible deal. Cars in the lower groups will have cheaper insurance premiums.

However, there are a number of other ways to slash the cost of your car insurance:

  • Reduce your mileage: The more miles you drive, the more likely you are to be involved in an accident – and the more expensive your green car insurance premium will be. Likewise, the fewer miles you drive, the lower your insurance premium is likely to be. So consider limiting your mileage, but make sure the figure you quote to your insurer is accurate to avoid the risk of invalidating your policy.
  • Increase your excess: Your green car insurance policy will come with a compulsory excess, which is the amount you are liable for in the event of a claim. This is usually set at £200. You can also volunteer to pay an additional excess in return for a lower green car insurance premium. However, make sure you can afford the combined excess in case you have to make a claim.
  • Drive carefully: If you can avoid making a claim you should be able to build up a healthy no-claims discount. This can dramatically reduce your car insurance premium by as much as 75% after five years.
  • Security: Boosting the security measures on your car – alarm, immobiliser, steering wheel lock, tracking device - can deter and thwart thieves and save you having to claim for theft.
  • Consider telematics: Another option is telematics car insurance. This is where a black box device is fitted into a car to monitor driving behaviour. Traditionally, those who are statistically more likely to make a claim pay the most expensive premiums. This is not the case with this kind of policy, with premiums based on actual driving performance.
  • Compare green car insurance online: You should always shop around for green car insurance quotes and compare deals from a wide range of providers on MoneySupermarket’s price comparison website. However, the cheaper green car insurance quote might not necessarily be the most suitable for you – so check the fine print to make sure your insurance policy fits your needs.

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