Virginia Automobile Dealers Association (VADA)’s Post

If you can decipher this fascinatingly poor article; kudos! Here are some clues to help: 1)”Maintenance costs” = “collision repair costs” 2)”sales lag expectations” also means that Ford sold 65% more EVs this year and the overall US sales for EVs are expected to increase by 20% over last year. 3)”low resale value” is what is leading consumers to lease…a financial instrument whereby the buyer only pays the depreciation + leasing fee. 4)”46% of UoC respondents” would not consider buying an EV = 54% would. At least the article got my attention since the actual Maintenance Costs of an EV are limited to tire replacement and rotation…and possibly brake pads at some point.

Car insurance is a hidden cost of EVs: Because the repair ecosystem is so much less well developed, claims and hence premiums tend to be higher, adding to the total cost of ownership. It's one of those details that makes you realize the huge benefit of incumbency enjoyed by the internal combustion engine. Carmakers are working together with insurance companies to sort it out, and there's also the vague promise that "connected cars" will eventually cut insurance costs by delivering swathes of driver data to insurers. Meanwhile, insurance is one of the many little things holding back the much-hyped EV revolution. This was an enjoyable piece to work on with Telis Demos. Thank you for the conversation, Craig Carrington. https://lnkd.in/eBa2MNR2

$6,066 The average severity, or monetary loss, of an insurance claim for a repairable electric vehicle in the U.S. in the first quarter, nearly 30% higher than for internal-combustion-engine vehicles, according to Mitchell, which provides software and data to auto insurers and the collision-repair industry. EVs are often more expensive than gas-powered cars and typically cost more to repair, which leads to larger claims.

#Diminution in #Value can occur when a car has been crashed & then repaired, however there are many myths surrounding how this reduction is calculated. In this guide we look at some of the arguments for & against a vehicle's value diminishing: https://lnkd.in/e58HQqci

Interesting read on electric vehicles and insurance related losses.

We have a lot of discussions about #diminution of #value & what does and doesn't cause a repaired vehicle lose value, so we thought we compose some guidelines:

In the United States, electric vehicles cost 12% more to insure, on average, than gasoline-powered ones, and EV insurance claims can be nearly 30% higher, The Wall Street Journal finds. A big reason is that electric cars are more complicated and expensive to repair -- although the costs could decline as EV adoption expands, mechanics gain specialized skills, and spare parts become more easily available. Digital technology, both in EV and ICE cars, could also help lower insurance costs because it generates the kind of driver data that could help underwriters manage risks better. #EVs #autos #insurance #FIRfirsttake

If you’re considering an EV as your next vehicle, pay attention to this trend. Rising frequency of claims coupled with higher repair costs (relative to ICE vehicles) and you could be paying more in auto insurance premiums

Electric vehicles can be a pain to insure. Fixing the problem would give reluctant buyers one less thing to worry about. You can still get insurance for any vehicle in any state but, at a time when motorists already are moaning about expensive coverage, EVs could add to the burden. They are often more expensive than gas-powered cars and typically cost more to repair, which leads to larger claims. In the U.S., the average severity of a claim for a repairable EV was $6,066 in the first quarter, nearly 30% higher than for internal-combustion-engine (ICE) vehicles, according to Mitchell, which provides software and data to auto insurers and the collision-repair industry. Car-rental agency Hertz, which in 2021 announced its plan to buy 100,000 Teslas, sending both its stock and that of the automaker higher on the news, has reversed course this year. The company cited the “damage expense associated with EVs” in its January decision to sell a third of its EV fleet. Part of that cost can be the greater work involved: over three mechanical labor hours on average for a repairable EV claim estimate, versus less than two for ICE vehicles, according to Mitchell data. Mechanics sometimes have to de-energize electric vehicles before removing their high-voltage batteries to avoid damaging them during repairs, Mitchell said. There may be behavioral driving changes, too. EVs naturally have more torque, which means that their electric motors can instantly deliver power to the transmission. Some insurers worry that faster acceleration from traffic lights could lead to more accidents, though some reviews have also found that EVs are less frequently involved in insurance claims. A review in May by Insurify, based on quotes on its online insurance-comparison platform, compared quotes for 13 popular EV models to gas-powered cars of similar cost and size. Insurify found the monthly EV premium cost to be on average 12% higher. It focused on drivers with clean driving histories and on newer-model vehicles. Insurers may opt to focus on EVs anyway. Sales have stalled lately in Western markets, but they are still projected to grow by around 20% this year to nearly 17 million units globally, according to the International Energy Agency. Some insurers even offer EV discounts. 

Insurers in some countries are facing a challenge with the shortage of mechanics for EV repairs. This has led to a debate on whether to repair or replace the vehicles. To learn more about how this issue is being addressed and the impact on the circular economy, check out the article. #EV #electricvehicles #circulareconomy #maintenance #aftermarket