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CAR INSURANCE costs for electric vehicles are now cheaper than petrol and diesel vehicles, according to new analysis from Compare the Market. Prices have reduced by £75 in the first quarter of 2021 removing one of the biggest “deterrents” towards electric transition.

The reduction means the average premium for electric models now stands at £566 per year, down from £641 late last year. The cheapest possible electric caf premium is at £478 highlighting drivers can secure rates even cheaper if they look around.

Meanwhile, average insurance prices for petrol and diesel vehicles say at £611 per year.

The price reduction was partly caused by the fall in car insurance claims during the pandemic and multiple lockdowns.

The average cost of car insurance for electric models has fluctuated over the past two years.

Prices reached a peak of almost £700 in December 2019 but have dropped as low as £550 in February 2021.