Factors To Weigh While Purchasing an Electric Vehicle

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24 Jul 2023

Factors to consider while buying Electric Vehicle & Buy EV insurance with Kotak General

Electric vehicles (EVs) have now become the future of automobiles, as they protect you from the rising fuel prices. And the government, in order to promote sustainability and motivate people to switch to electric vehicles, have come up with various schemes under FAME.i.e. Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India.

But buying an electric vehicle is not the same as buying any conventional car. There are a few factors that impact your decision for buying an electric vehicle. Let's delve into the factors you need to consider before finalising your purchase decision for an electric vehicle.

1. Insurance of electric vehicles:

The insurance cost of electric vehicles is more than its other counterparts. The high repair cost and servicing costs of these vehicles attract higher premiums.

It is always advisable to choose a comprehensive policy in the case of electric vehicles so that the insurance adequately covers any damage to the vehicle along with third-party vehicle insurance. You can also choose add-ons to sufficiently cover the replacement cost or repair cost of its parts. In order to promote buying of electric vehicles, IRDA has made it mandatory to offer a 15% discount on third party premiums of EVs.

2. Price of the vehicle:

Before you decide to buy an Electric vehicle, consider the vehicle's price as a simple base model of EV starts from approx. Rs.6 lakhs. The higher price of EV vehicles is due to their cobalt battery. Though manufacturers are trying to make these vehicles budget-friendly by replacing cobalt with nickel, it would still take a few years to gain prominence.

3. Driving range:

Driving range of an electric vehicle depends upon its battery life. At the same time, an ideal electric vehicle can deliver a driving range of over 100kms, which is ideal for in-city drives. In case you are a travel enthusiast and wish to drive through cities, EV is not a perfect choice for you. While you can choose to refuel in the case of conventional vehicles, locating a charging station for an electric vehicle can be daunting.

4. Maintenance cost:

Maintaining an electric appliance is difficult, so is the case with electric vehicles. The battery of the EVs is the most expensive part. In case of any damage to the battery, the replacement costs are too high. Also, due to its high battery costs and use of advanced technology, the service costs are high, making your motor vehicle insurance expensive for EVs.

5. Battery life:

You would need to check the battery life before finalising your purchase decision for EV vehicles. As the prices of the batteries are too high, replacing them would surely burn a hole in your pocket. Currently, the charging stations are adequate in metro cities, but the infrastructure is yet to thrive in other towns.

6. Infrastructure for Charging EV:

One of the crucial factors that would affect your purchase decision for electric vehicles is the charging infrastructure which is still at a nascent stage in our country.

7. Incentives & Tax benefits on EV:

Section 80EEB allows a tax deduction on interest payment up to Rs.1,50,000 on auto loans taken for purchasing Electric vehicles. In order to encourage the sale of EVs Government of India has reduced the GST for Electric vehicles to make them more affordable.

You can choose Kotak car secure comprehensive car insurance policy and protect yourself and your car from any financial loss.

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Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.