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16% of drivers say their next car will run on alternative fuel

31 August 2016

Gocompare.com Car Insurance considers the insurance implications of owning these vehicles

If they were to buy a new car tomorrow - more drivers (48%) would opt for a petrol powered car than one fuelled by diesel (21%).  A new survey of 2,000 drivers1 also found that 16% of motorists would buy a hybrid, LPG or electric powered car.

The research, commissioned by Gocompare.com Car Insurance, echoes data from The Society of Motor Manufacturers and Traders’ (SMMT) UK new car registrations report which shows that while sales of diesel cars rose by 3% in 2015, they were outpaced by an 8.4% rise in sales of cars with petrol engines – giving diesel and petrol cars an equal share of the market. New registrations of alternative fuel vehicles grew by 40% and now account for 2.8% of the market.  

What are alternative fuel vehicles?

An alternative fuel vehicle (AFV) is able to run on a fuel other than purely petrol or diesel, including electricity, gas or a combination of fuels such as gas bi-fuel and hybrid electric.

Electric vehicles (EV) arepowered solely by batteries using an electric motor to turn the wheels, they produce zero emissions.  Cars powered purely by electricity have a limited distance they can travel between charges – so may not be a suitable choice for everyone.

Hybrid vehicles use more than one method of propulsion - each power source can work independently or can drive the car together.  For example, a car could be powered by petrol and/or electricity enabling it to travel a greater distance than purely-electric powered vehicles, while still delivering a significant reduction in emissions.

Liquid Petroleum Gas (LPG) is considerably cheaper than petrol or diesel and is more environmental friendly.  Most existing petrol cars can be converted to run on petrol or LPG, but conversions should always be carried out by an approved installer.  There are some restrictions on the use of LPG fuelled cars.  For example, LPG powered cars (including hybrids using this fuel type) are not permitted on the Eurotunnel, there are also restrictions in some underground car parks.

Insurance for AFVs

Not all insurers provide cover for AFVs but the market is growing as these vehicles become more mainstream.  Insurance for AFVs tends to be slightly more expensive than for their petrol or diesel fuel counterparts.  In addition to the restricted insurance market, this is due in part to the higher cost of new AFVs than equivalent traditionally fuelled cars and the associated costs of specialist replacement parts and repairs.  

Insuring an electric car can be a little more complicated if the battery (which is one of the most expensive components of the car) is leased. In this situation, drivers should check with their battery provider who is responsible for cover in the event of damage before getting an insurance quote.  Insurers of electric cars will also expect customers to take especial care when charging their vehicle to prevent the charging cable from becoming a trip hazard.  If it is necessary for the cable to run over a public pavement, then it’s essential to find a policy which provides liability cover.

Matt Oliver spokesman for Gocompare.com Car Insurance commented, “While sales of petrol and diesel cars still dominate the market, an increasing number of motorists are buying alternative fuel vehicles.  In addition to environmental concerns and high fuel prices, sales of these cars are in part driven by attractive Government incentives and tax breaks which help bring down running costs.  But, alternatively fuelled cars are still niche and generally cost more to insure than similar petrol or diesel models.  While there’s a good choice of providers and a competitive market for hybrid vehicles, drivers of purely electric cars might still find it harder and more expensive to get cover.

“So, if you’re thinking of buying a greener powered car or converting your existing car to run on LPG, as part of your research you should get a range of insurance quotes to check both prices and the level of cover on offer.  As sales of alternative fuel vehicles increase and insurers become more familiar with the new technologies then we should see a more competitive insurance market for these cars.”

See Gocompare.com's dedicated guide for more information on insuring electric and hybrid cars.

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Notes to editors:

[1]Between 18th and 24th May 2016 One Poll conducted an online survey among 2,000 randomly selected British adults.