Norway Discovers Unintended Side-Effect of Plug-in Car Incentives: Higher Insurance Write-Offs

It’s a well-known fact that Norway is in love with the electric car. Driven by the most generous carrot-and-stick incentive packages anywhere in the world — one that both rewards electric car buyers with free parking, free charging in public places, permission to drive in bus lanes and zero sales tax, and punishes owners of heavily-polluting cars with high taxes and registration fees —electric cars now account for more than fifteen percent of all new car sales across the nation.

In Norway, plug-in cars are no-longer niche, but low purchase costs are causing headaches for insurance companies

In Norway, plug-in cars are no-longer niche, but low purchase costs are causing headaches for insurance companies

In fact, it’s hard to see a downside of Norway’s incentive program, especially when you consider than 98 percent of all electricity in Norway is generated using renewable sources.

But now it appears Norway’s incentive program has an unfortunate, terrible consequence: lowering values mean more plug-in cars are being written off.

As Vg reports (via InsideEvs), electric cars are so much cheaper to buy than they are in other countries that more Norwegian electric cars are being written off following an accident.

That’s because while the cars themselves are heavily discounted at point of sale, the replacement parts needed to repair the car in the event of an accident aren’t. While the cars are sold with no VAT, all spares command them, which makes plug-in cars more likely to be written off due to uneconomic repair costs.

Consequentially, this leaves insurance companies shelling out more for new cars than they usually would, resulting in a lower profit for insurance companies and soaring premiums for plug-in car owners.

As for the cars themselves? Written off vehicles are sold for their scrap value and may or may not find themselves being recycled. Either way, while the cost of replacement may be more economic than repair, the carbon footprint of replacing a written off vehicle is far worse than fixing it up.

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