Alternative Fuel Vehicles

Average car insurance for alternative fuel vehicles costs $118/mo or $1,426 annually. However, you can receive cheaper alternative fuel quotes by comparing rates and applying for discounts. What are the most popular gas alternative fuels? Alternative auto fuels include biodiesel, electric vehicles, ethanol, natural gas, and propane.

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UPDATED: Sep 11, 2020

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Just the Basics

  • Average alternative fuel car insurance rates are $118 per month or $1,426 annually.
  • The five major alternative gasoline options are biodiesel, electric vehicles, ethanol, natural gas, and propane.
  • As alternative fuel vehicles become more and more common, insurance rates will start to decrease.

In an effort to scale down on petroleum usage and dependency in the U.S., and to reduce greenhouse gas emissions, alternative fuels vehicles are now being produced by most major car companies. In this comprehensive guide, we’ll discuss how car insurance rates are calculated for alternative fuel-powered cars and compare alternative fuel quotes to help you find the most affordable option for you. 

There are so many factors that affect the price of car insurance. Companies will factor in your age, driving record, and even the state you live in when calculating your rates. The make and model of the vehicle you drive can also impact your annual premiums. But are hybrids more expensive to insure than traditional vehicles? 

Ready to compare the best car insurance rates for alternative fuel vehicles? Just enter your five-digit ZIP code into our FREE quote comparison tool above to find the lowest hybrid car insurance rates. 

Are alternative fuel vehicles more expensive to insure?

What is an alternative fuel vehicle? Any vehicle that runs on a form of energy other than petroleum, or gasoline, is considered an alternative fuel vehicle. However, hybrid vehicles that combine an alternative energy source with a regular petroleum engine also exist. 

Approximately, the average rate for alternative fuel car insurance is about $118 per month or $1,426 annually. In order to keep drivers and families safe while the technology continues to develop, the National Highway Traffic Association has pledged to fully and comprehensively test alternative fuel vehicles to the highest degree.

These days, almost every car company sells some kind of hybrid or fuel-efficient vehicle. From economy models to luxury options, consumers have more gas alternative fuel options than ever before. 

For example, affordable alternative fuel vehicles from Nissan include the Nissan Rogue or Leafnissan LEAF. When it comes to the mid-level BMW alternative fuel vehicles, there’s the BMW 740e xDrive. There are even Ford alternative fuel vehicles, like an electric plug-in version of the Ford Escape. 

But are these eco-conscience vehicles more expensive to insure than their gas-guzzling competitors? Take a look at the following table, which shows the average annual rate for full coverage insurance for different alternative fuel options based on small sample sizes. 

Average Annual Full Coverage Car Insurance Rates by Alternative Fuel Type
Fuel AlternativeAverage Annual Full Coverage Car Insurance Rates
Biodiesel (B20)$1,322
Propane and propane bi-fuel$1,418
Compressed natural gas (CNG)$1,453
Ethanol (E85)$1,463
Electric, plug-in, and hybrid$1,475
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While it appears that the vehicles using the top alternative fuels are more expensive to insure, keep in mind that many factors impact insurance rates. Car insurance rates by state, for example, will vary drastically. Your age and driving record can also cause your rates to increase or decrease from the estimates above.

Therefore, our expert recommendation is to always perform price comparisons between different companies before choosing a car insurance policy. 

What are the different fuel alternatives for vehicles?

According to the U.S. Department of Energy, there are over 500 different alternative fuel vehicles on the market for consumers to choose from, featuring five popular gas-alternatives. Some are known as biofuels, and others are electric options. 

What are biofuels? A type of fuel that is derived from living matter. Seeker explains the recent scientific advancements in biofuel technology in more detail in the following video.

The different types of alternative energy vehicles we’ll look into include biodiesel, electric vehicles, ethanol, natural gas, and propane. Let’s dive deeper into what these alternative auto fuels actually are, and how they differ from gasoline. 

Biodiesel as a Fuel Alternative

Biodiesel is a renewable fuel source that can be manufactured from a variety of products, including animal fats, vegetable oils, and even recycled cooking grease from restaurants. 

However, you should not simply put cooking grease into your biodiesel vehicle. All of these products need to be converted into biodiesel before being used to fuel your car. 

If you use these substances in their raw, unprocessed form, it can lead to long-term engine deposits, as well as operational and maintenance problems. It will also reduce the overall life of your engine. 

Once the products are processed and converted, the result is a non-toxic, biodegradable, clean-burning fuel that is much safer to handle than petroleum-based fuel, otherwise known as gasoline. In addition to pure biodiesel fuel, denoted as B100, there are biodiesel-petroleum diesel blends. 

Common blends include 2 percent biodiesel, or B2, and 5 percent biodiesel, or B5. However, the most common is 20 percent biodiesel, otherwise written as B20. Many diesel engines can handle B20 without any modifications being made to the vehicle. However, using it may void your vehicle warranty, so check before you fill your tank with biodiesel.

There are currently 56 different biodiesel vehicles available to consumers. There are also hundreds of biodiesel stations located across the country. You can easily search for them online to see if any are located near you. 

Take a look at some average full coverage biodiesel quotes in the table below.

Average Annual Full Coverage Car Insurance Rates for Biodiesel Vehicles
Biodiesel Car Make and ModelAverage Annual Full Coverage Car Insurance Rates
Chevrolet Colorado 2WD$1,222
GMC Canyon 2WD$1,324
Land Rover Range Rover$1,310
Ford F-150 4WD$1,322
Chevrolet Equinox$1,370
GMC Terrain AWD$1,336
Jaguar XF$1,370
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Overall, insurance rates for this type of vehicle are pretty close to average. The downside to biodiesel? The price of B20 biodiesel tends to be slightly more expensive than petroleum diesel. It can also cause vehicles to have a somewhat lower fuel economy and power.

All things considered, biodiesel is better for the environment and safer to handle than traditional gasoline.

Electricity as a Fuel Alternative

A common trend on the market these days are vehicles that use electricity as an alternative fuel source. Often, these vehicles have an electric motor fueled by a battery. 

The motor might be the only source of power for the vehicle, or in some cases, a combination is used between electricity and an internal combustion engine that runs on traditional petroleum. However, some electric combination vehicles run on alternative fuel instead of traditional petroleum-based gasoline. 

There are three main types of electric vehicles which include all-electric, hybrids, and plug-in hybrids.

All-electric vehicles are powered solely by a battery-powered electric motor, which means they produce no exhaust or emissions. Tesla is one of the leading producers of all-electric vehicles in the United States. One unique feature of these vehicles is that they must be charged by plugging into an electric power source. 

Depending on what make and model you purchase, all-electric vehicles can drive between 150 to 400 miles on a single charge. Numerous factors might affect the range, including temperature, speed, acceleration, and strain on the engine caused by weight, road conditions, and road incline. 

Hybrid and plug-in hybrid vehicles contain both an electric motor and an internal combustion engine. Vehicle power and performance are, therefore, shared between the motor and the engine, producing fewer emissions and requiring less fuel, which saves you money at the pump. 

The difference between these two vehicles is that plug-in hybrids must be plugged in to charge the battery for the electric motor, while hybrids use the engine itself to charge the battery. A commonly seen hybrid vehicle is the Toyota Prius. Ford produces a Ford Escape hybrid plugin. There are over 100 different electric plug-in and hybrid vehicles on the market today. 

Take a look at some average annual full coverage car insurance rates for electric, plug-in, and hybrid vehicles in the table below.

Average Annual Full Coverage Car Insurance Rates for Electric Vehicles
Electric Car Make and ModelAverage Annual Full Coverage Car Insurance Rates
Jeep Wrangler$1,256
Toyota Prius AWD$1,306
Honda Insight$1,372
Ford Fusion Hybrid$1,492
Hyundai Sonata Hybrid$1,548
Lexus 300h AWD$1,624
Audi A6 Quattro$1,728
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Insurance rates for electric vehicles are very close to cars that use generic gasoline. However, some of the parts are more expensive to replace, and some models do require specialty mechanics, which can cause your rates to be higher. 

With the increasing popularity of Tesla cars, there are now tens of thousands of electric stations located throughout the United States. You also have the option of having a charging port installed in your home. However, if you choose this option, you will have to pay an installation fee. The cost of charging your vehicle will also increase your electric bill.

If you are interested in an electric vehicle, you have several makes and models to choose from for each type. There are now more than fifty different models to choose from, and most popular vehicle brands offer some type of electric option, including Tesla, Toyota, Chevrolet, Nissan, Ford, BMW, Acura, Honda, and many more.

Ethanol as a Fuel Alternative

Ethanol is a renewable fuel made from plant materials, primarily starch in corn grain. A small amount of ethanol can be found in 95 percent of the gasoline being produced in the U.S. 

To cut down on the nation’s use of petroleum, a high-level ethanol blend known as E85 is being produced. E85 contains anywhere from 51 percent to 83 percent ethanol blended with gasoline. However, seasonal conditions and geographic locations affect the performance of ethanol fuels, which is why there is such a range in the ethanol percentage in E85.

Ethanol is a high-octane fuel, which means it will increase your vehicle’s power and performance. However, it contains less energy than gasoline, so you will have a lower overall fuel economy. 

Because ethanol is a corn-based product, the number of air pollutants and greenhouse gas emissions are significantly less than what gasoline produces. Even more good news? Ethanol is typically slightly less expensive than gasoline.

Check out the average annual full coverage car insurance rates for some E85 compatible vehicles ni the table below.

Average Annual Full Coverage Car Insurance Rates for Ethanol Vehicles
Ethanol Car Make and ModelAverage Annual Full Coverage Car Insurance Rates
Ford Explorer AWD FFV$1,308
Chevrolet Impala$1,342
Nissan Frontier 2WD FFV$1,394
GMC Sierra 2WD$1,460
Ram 1500 Classic$1,524
Chrysler 300$1,548
Dodge Charger$1,668
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There are 84 models of E85 vehicles currently available to consumers, and nearly 3,600 ethanol stations currently located throughout the country. As this type of fuel becomes more common, insurance rates for these models will also start to decrease. 

You can choose from pickup trucks, sedans, vans, and SUVs from a wide range of automakers, including Dodge, Audi, Cadillac, Toyota, Mercedes-Benz, Volkswagen, and even Bentley Motors.

Natural Gas as a Fuel Alternative

Natural gas fuel is a mixture of hydrocarbons, mostly methane. It’s odorless, non-toxic, and clean-burning. Natural gas as an alternative fuel comes in two forms, liquefied and compressed. 

Liquified natural gas is more expensive and is currently only used in heavy-duty vehicles not that are not available to consumers, like public transport buses. There are a handful of compressed natural gas trucks available through Ford, GMC, and Chevrolet. 

See the average annual full coverage car insurance rates for vehicles that use compressed natural gas in the table below.

Average Annual Full Coverage Car Insurance Rates for Natural Gas Vehicles
Compressed Natural Gas Car Make and ModelAverage Annual Full Coverage Car Insurance Rates
Ford Transit Connect Van/Wagon$1,248
Ford F-150$1,322
GMC Sierra 2500 HD$1,592
Chevrolet Silverado 2500 HD$1,650
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With only around 38 options available currently on the market, expect the insurance rates for these vehicles to be a little higher than average. Often these vehicles require specialty mechanics, which also increases your rates.

Natural gas is similar to gasoline when it comes to power and performance, but the fuel economy of natural gas is lower because it contains less overall energy than gasoline. Compressed natural gas vehicles produce lower levels of exhaust emissions and no evaporative emissions since the gas is stored in a tank that is completely sealed. 

Compressed natural gas is also significantly less expensive than gasoline and other alternative fuels when compared on an energy-equivalent basis. There are just over 900 compressed natural gas stations located across the country. 

Propane as a Fuel Alternative

Propane is liquefied petroleum gas. It is a high-energy, high-octane, non-toxic alternative to gasoline, and is typically less expensive. Propane is clean-burning, so it increases the service life of your engine, reducing maintenance costs. 

The power, performance, and range of a propane-powered vehicle is similar to gasoline-powered vehicles. Propane is now the third most common engine fuel in the world. There are just over 1,500 propane stations in the U.S.

Propane-powered vehicles have an onboard tank pressurized to around 150 pounds per square inch. The size and capacity of the tank will vary depending on the vehicle, much like the size of gas tanks vary in conventional vehicles. 

There are dedicated propane vehicles that rely solely on propane, and there are bi-fuel propane vehicles that have propane and gasoline fuel systems, allowing the vehicle to be powered by either type of fuel.

Check out the average annual full coverage car insurance rates for propane and propane bi-fuel vehicles ni the table below.

Average Annual Full Coverage Car Insurance Rates for Propane Vehicles
Propane Car Make and ModelAverage Annual Full Coverage Car Insurance Rates
GMC Savana 2500$1,282
Ford F-150$1,322
Chevrolet Silverado 2500 HD$1,650
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There are around 18 propane and bi-fuel propane vehicles on the market, most of which are vans and trucks. Because of the limited option in car type, the insurance rates for these vehicles are higher than average.   

You are now an expert on all of the alternative fuels for cars. You know the difference between natural gas versus propane-powered vehicles and are ready to start car shopping.

Whether you’re considering the catalog of Chevrolet alternative fuel vehicles, or looking into the BMW natural gas vehicles, remember to also shop around in order to find your best car insurance ratets.

Enter your five-digit ZIP code into our FREE quote comparison tool below to secure the lowest alternative fuel car insurance rates out there.

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