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Commercial Vehicle Insurance – Electric car users to pay 0% company car tax in 2020
Government changes to 2020 Benefit In Kind (BIK) ratings to promote low and zero emission vehicles.
Major changes to the UK’s company car tax system will mean drivers choosing an electric car pay 0% benefit-in-kind charges from next year and low emissions vehicles also get significant reductions.
After a review by the new Worldwide Harmonised Light Vehicle Test Procedure (WLTP) emissions regulations, the British Treasury has amended its previously published rates in favour of Electric vehicles.
For cars registered from April 6th 2020, most benefit-in-kind rates will be reduced by two percent over the current system. For Electric Vehicles, that means zero percent, which is also extended to most vehicles registered prior to April 6th.
The reduced charges will also apply to hybrids and plug-in hybrids that are capable of 130 miles or more of electric only range, with CO2 emissions less than 50g/km. (very few vehicles fit in this bracket).
Current projections are for the 0% rate to increase to 1% by 2021/22 and up to 2% in 2022/23, but this may change.
Insuring an electric car for business use
It is important to consider the other costs your business might face if switching to electric vehicles. Insuring an electric car is not always as easy as insuring a car with internal combustion engine, and unfortunately it still costs slightly more.
Major insurers like Aviva, AXA, Direct Line, and Allianz now cover electric cars for private use however many insurers still prefer not to insurer them for business use or on commercial fleets and will impose higher excesses or limit the amount of electric vehicles a policy holder can insure on a fleet.
Although electric cars are set to become more common amongst business owners the insurance industry is still catching up, so it pays to work with a broker who is up to date with latest information.
The insurance industry generally applies a higher group rating to electric cars compared to traditional vehicle currently, this is because servicing of electric vehicle is currently more specialised and the mechanics require specialist training to deal with the battery. In addition to this parts and batteries are expensive which increase the costs to insurer in the event of a claim. The likelihood of fire and total a loss is also a factor with some types of battery. As such many insurer have set up specialist teams to underwrite electric vehicles while the statistical data on insurance claims is still in its infancy.
If you are looking for a commercial insurance quotation for your electric vehicle call Clarke Williams Ltd for a no obligation review. Our specialist account handlers can provide insurance quotations for fleets ranging from 2 to 100 plus vehicles. We only use rated insurance companies, so you have peace of mind and don’t get a shock from your insurance.
We can also provide advice on fleet training and management facilities that can help reduce premiums, improve your claims record (or maintain them) and reduce stress for your management team.
If you would like to one of our specialists or arrange an appointment to discuss your current fleet insurance arrangements call 01732 252 898.
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Clarke Williams Ltd are authorised and regulated by the Financial Conduct Authority under reference 758683. The Financial Conduct Authority’s Register can be accessed through http://www.fca.org.uk/ . We are registered in England and Wales with Companies House under number 10317065. Our registered office address is 194 High Street, Tonbridge, Kent, TN9 1BE