The Car Dealership Guy has highlighted a rise in insurance costs for electric vehicles (EVs), with average premiums increasing by 16% year-over-year to $4,058. This figure is 49% higher than the $2,732 average for gas-powered cars. The increase is attributed to higher repair and replacement costs, according to a post on X.
According to Reuters, the expiration of U.S. federal EV tax credits on September 30, 2025, is exacerbating affordability concerns as insurance costs rise. Analysts warn of a potential drop in sales following the end of these credits. Market observers expect a decrease in registrations as incentives lapse, further amplifying the insurance-cost burden highlighted by Car Dealership Guy and complicating the total cost of ownership for prospective EV buyers.
Insurify’s 2025 analysis indicates that EV drivers pay an average of $4,058 per year for insurance compared to $2,732 for gas-powered cars, marking a 49% gap. Insurify attributes this difference largely to higher repair and replacement costs that impact premiums.
Claims Journal reports that data from Mitchell International shows EV repair costs are now 20%–30% higher on average than those for internal-combustion vehicles due to specialized parts, advanced driver-assistance systems (ADAS) calibration, and battery-related procedures. The publication also notes an increase in EV total-loss frequency tied to battery damage risk and declining used-EV values. These factors contribute to the claim severity and help explain the insurance premium disparity discussed by Car Dealership Guy.
Car Dealership Guy’s official site describes it as an automotive media platform offering news, data-driven analysis, and industry commentary for dealers and consumers. It publishes a daily newsletter, hosts podcasts, and shares insights across social channels. The platform positions itself as “your cheatsheet to the car business” for over 55,000 industry subscribers.
