Do Hybrids Save You Money on Insurance

For the first several years they were available, gasoline-electric hybrid cars came with deep incentives from dealers, and government rebates to encourage purchases. In some states, driving a hybrid vehicle even allowed you to use the carpool (HOV/diamond) lane on the freeway. With most of those incentives either eliminated or shifted to 100% electric vehicles
is saving money with a hybrid still possible, considering their higher price tags? The answer is yes, though you shouldn't necessarily look for the savings on your insurance bill.

Why Do People Think Hybrid Insurance is Less Expensive?

Generally speaking, hybrids are purchased by people in low-risk insurance profile groups. These are people with stable jobs, good credit, clean driving records, and who own homes (so they can bundle car insurance with their homeowners insurance). If hybrid vehicles cost the same amount as the gasoline-powered models of the same car, then, based solely on customer demographics, the cost of insuring these vehicles should be cheaper.

The reality is that hybrids cost more to buy, and therefore have a higher replacement cost. For example, the gasoline-engine 2012 Toyota Camry has a starting MSRP of $21,955. The 2012 Toyota Camry Hybrid, on the other hand, has a starting MSRP of $25,900, almost $4,000.

Then, too, there is the cost of repairs and replacements. Sure, the standard parts of the car cost the same - a dented door panel is a dented door panel, after all, but the battery pack in a hybrid vehicle is much more expensive to replace than you might think, especially since there are fewer options for where to have repairs done. In many cases, you may be forced to go back to the dealer, and we all know that's usually more expensive.

Hybrids, then, are inherently more expensive to insure than their gas-powered siblings.

Can You Save Money and Still Own a Hybrid?

The good news is that there are ways to mitigate the more expensive initial insurance expense. First, you'll still be saving money on gas, but there are still ways to reduce the cost of your actual car insurance. Discounts for low mileage and good credit are mentioned above, but a few other ways to save include:

- Raise your deductible: as a hybrid driver, you're more likely to have the cash to pay out-of-pocket if you have a higher deductible, and the higher your deductible, the lower your premium.

- Keep your driving record clean: good driver discounts are incredibly valuable. In some cases, you may even be able to get a "diminishing deductible" policy on top of the discount, where your deductible is reduced for every year you remain accident-free.

- Loyalty discounts: staying with the same insurance company for two or more years can save you money.

- Go digital: most insurers will give you a small discount for receiving statements by email. Others will give you a discount if you set up automatic electronic payments for your premium. Some, will give you both discounts.

- Consider a multi-car policy: If you and your spouse or partner have multiple cars, even if one's a hybrid and one is not, putting both vehicles on one insurance policy will save money, even if you're not also bundling your car insurance with your homeowners or life insurance coverage.

Hybrids, in and of themselves, won't save you money on your insurance premium, but by maximizing the discounts likely to be available to you as a typical hybrid driver, you can offset the more expensive insurance premiums and still save money at the gas pump. When it comes to driving in the HOV lane, however, your best bet is to ride-share.

This article was written by Brian Davidson who is an insurance blogger and contributes regularly to the website CheapCarsInsurance.org. Brian has been blogging about car insurance for over 4 years now"

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