EV & Plug-In Hybrid – Higher Chance to Total Loss?
So, did you know that if you drive a plug-in hybrid or an electric vehicle, the chances of your car going to total loss in an accident is much higher than if you drive a petrol or a diesel car. Now, I’ll explain as I go along, but for now, let’s rewind back last week when I shared with you the story. This gentleman I met who lost his BMW 330e in an accident was declared total loss but it was a fortunate accident for him because number one he was not hurt. Nobody was hurt thankfully. Number two the payout from the insurance was able to cover his loan because at that point in time the market value of his car was 50,000 ringit below what he owed the bank. So if he were to sell his car on that time, he would have to top out 50,000, maybe even more. So in that case, well, that insurance sort of saved him financially. But if anybody was inspired by that video to engineer an accident on their cars, I’m going to tell you, don’t. You will be in for a very, very rude surprise because number one, cheating insurance company, it’s a criminal offense. Don’t do it. You can going to fine or you can muscle up jail. I am kidding you not. Number two, insurance company also smarter than you. See, because there are more and more cases of all these cars being declared total loss and all that. Insurance companies also know how to manage their risk. Insurance companies in fact are continuously adjusting their premiums so that they are able to stay profitable and so that people who indeed get into trouble, get into legit accidents, they are able to be paid out fairly. Now the thing is as we all know in Malaysia over the years there are many ways that workshops and owners have been defrauding insurance companies cheating with their claims and all that all that are what happens. End of the day consumers going to pay for it. All of us will collectively pay back the insurance company whatever we thought we have unong and cheated for them. The insurance companies also know how to rig the games in their favor. Ultimately cheating insurance companies is a crime and even if you can get away with it in the long run everybody pays for it one. So it is in ence a knowing scenario long term. Now coming back to the case of these PHEVs and whatnot. So insurance company also will not insure your car for more than what it’s worth. So it means that let’s say like right now today you owe the bank 120,000 ringgit but market value of your car right now is only 80,000 ringgit insurance company will not insure your car for more than 80,000 ringgit even if you’re going to pay more at most you can insure over insure it by more than 5 10% that’s it maybe can insure for 85 80,000 ringgit that’s it but to insure it up to 100 120,000 no way okay so this puts you in a very scary position because you are in the space whereby if you sell the car have to top up money your car declared total loss in an accident also you have to top up money very very painful now then finally when it comes to plug-in hybrid or electric vehicles the chances of your car being declared total loss in an accident is much higher than if you are driving a regular petrol or diesel car and this is assuming that one the probability of you getting into an accident is the same. Two, the severity of the accident is the same. Your chances of an EV or PHEV being declared total loss is still higher. Why? Because in an EV or a plug-in hybrid, the batteries are mounted at either the back of the car or on the floor plan of the car. And this is where it is very easy for these batteries to be damaged in an accident. And the cost of replacing these batteries or its supporting components very easily will exceed the total value total insured value of the car. So when this happens, how insurance company declared your car total loss because it is beyond economical repair. The reality that you face with plug-in hybrid or an EV is that number one, insurance company will only insure your car to market value. And faced with steeper depreciation, there is a very good chance that you your car will have to be insured at a value below what you owe the bank. Number two, insurance companies also charge more for insuring an EV or a plug-in hybrid. According to my sources in the used car market who have transacted EVs recently, they are seeing difference in insurance premiums pricing for the same value. Let’s say like 100,000 ringgit EV versus 100,000 ringgit petrol diesel car. The difference can be as much as 30 40%. The EV is 30 40% higher. Okay. Number three, the probability of your car being declared total loss after an accident given the same severity in a petrol car versus an EV car. your probability of getting your car declared total loss in an EV or plug-in hybrid is much much higher. Okay. So, the reason I’m recording this video, I’m sharing this message out. It’s not that I’m telling you, oh, okay, don’t buy don’t buy plug-in hybrid, don’t buy hybrid, buy petrol car better. That’s not the the point of the message at all. The point of the message is that I’m just sharing with you what’s the reality out there. There is a cost involved in owning these cars. And it this is something that you need to be aware of. And if you want to jump into the ownership of these cars, there are there is these kind of price and risk factors that are involved. I’m not discouraging EVs because I personally I like the idea of having EVs as a as a dayto-day vehicle. You know, sending kids to school, right? Going negotiating town commutes and all that. I you know having an EV is just so much more peaceful, so much more serene. An EV in daily driving, urban driving is a much more pleasant experience than than a combustion engine. I’ll say that right. Combustion engine cars are great when you are going enthusiast driving, when you’re driving long distance and all that. Those are fun. But EVs, I believe, are actually more suitable for for daytoday use for chores and whatnot. Okay, that is my view. So, let me know your thoughts in the comment section below. All right? Especially if you own a plug-in hybrid or an EV, let me know how is your what’s your insurance costs like and also share with me are you still able to insure your car at at least at the amount which you owe the bank. Let me know in the comment section below and I’ll see you in the next
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