Hi, I'm Graham Hill and I'm the author of Electric Cars - The Truth Revealed. If you want to get a copy that book, then you can download it by going to grahamhilltraining.com, and if you also pay the upgrade for the training, which will be coming out later in 2024, you get a ridiculously low price. So it's well worth buying the book and the training which helps to fund this podcast. If you want to sign up for the podcast, whatever channel you're on, if you sign up through the channel or if you go on to grahamhilltraining.com/podcast, we'll make sure that you're aware of the latest releases. Now I've already explained about the Diffusion of Innovation and the position we're in at the moment in terms of electric car sales. We've gone through the first stages. We've been working our way through what are known as the Innovators and the Early Adopters. We've now got to that chasm before we get to the big numbers, before we get to what’s known as the Early Majority, as we call it. Once we get to that stage, then it will take off at pace. But we're not there yet and what we've got to do to get there, as I've already mentioned, is we've got to come out with much more information. We've got to flood the market with information, not the sort of stuff that's getting out there at the moment. I read some long reports a few days ago about the amount of particulates that are being released by tyres and how EV tyres compare with standard tyres, then it goes on and on to the point of tedium. I mean it's boring.
It's not the sort of information that people are really that interested in. Yeah, there'll be a few people that think, this contributes to total emissions making electric cars bad for the environment. They're normally the people that don't want to go electric anyway. But what we're trying to do is get those people that want to go to an electric car to help them along that journey and make sure that they've got sufficient information in order to make a qualified decision on which way to go. Once we've got them into the position where they want an electric car, then we need to start looking at how they can afford one. And affordability is all important. It's not just down to the price of the car, because some finance products can protect you from sudden drops in prices which you are exposed to if you pay cash for the car. I'll be going through this when I explain some of the finance products that are out there that protect you because you're not taking any risk in sudden depreciation as a result of price drops or some bad publicity as a result of car batteries burning etc. We don't want to run that risk of you having your money invested in the car and losing large parts of your investment. You want to pass that risk on to someone else, but we'll talk about that when we get to finance.
Now I'm going to be talking, over the next few podcasts, about insurance. I've decided that what we need to do is take out one heading out of about 50 in the book and go through it in detail and show how each driver is affected. I’ll be looking at the implications for each driver as they can vary from customer to customer. As with other headings in the book customers know too little about the implications of driving an electric car before they commit to ordering one. Some seek out the information whilst others, anxious to transition to electric, holdback because they simply don’t know enough about them. And this, unfortunately, is the big problem holding back transition from ICE to electric. People don't know enough about electric cars. So we're going to kick things off with insurance over the next few podcasts. I'm going to talk about insurance implications one at a time. Keeping them fairly brief.
So the first one I'm going to talk about is the one thing that if you're selling electric cars, either as a broker leasing them or you’re a dealership selling them for cash or for finance there's something you need to tell the customer that she needs to know before they even think about placing an order for a car. If you’re thinking of ordering an electric car as a customer, before placing that order you must understand that you are entering into a legal commitment. Now sometimes you can cancel and get your money back, but there's a fairly good chance that once you've placed the order, you've made a legal commitment and you must stick with it. Even though you've now found out more information, it's a bit too late. So you want to be very, very careful about this. Now, providing this information before the order is placed may drop into the consumer duty regulations but that is uncertain. It's not been touched on by a lot of those regulated by FCA regulations or the lawyers that have been looking at this so the situation is far from clear-cut.
I believe that it should be part of consumer duty regulations because I look at a bigger picture and if you, as a broker or salesman, don't tell your customers this before they place their order for the car, you're contributing to any misunderstanding and misinformation that may have confused the customer leading to the need to cancel the order. So here's the problem. Before you do anything, get an insurance quote for each of the cars you are considering. Try to keep an open mind and consider several makes and models. Once you have a few cars to choose from get quotes on all of them.
The reason for this is that electric.car insurance has been going up fairly rapidly, and understandably, because we’re now getting more information on the cars and insurance companies like AXA are testing cars to find out which ones are safe, which ones aren't and basing premiums on their test results rather than data that is gathered which is always historic and not indicative of what will happen in the future. There are some big costs coming down the line, which I'll be talking about in another podcast, whereby some of the insurance companies have been forced to write off cars as a result ot relatively minor damage, because part of the damage is to the casing of the battery pack, and if that happens, they're just as likely to write the whole car off rather than replace the battery pack, which will be very, very expensive. Even if the pack can be repaired the insurance companies are loath to do so for fear of resultant problems following the repairs further down the line. So these are the sorts of things that we'll be talking about in future podcasts.
So the first thing you need to do, especially if you've got three points on your license, and especially if those three points are for speeding, because of recent press reports. We found a report in the Guardian, in which a chap who they called David, I don't think that was his real name, had a Tesla Y and after a year the insurance came up for renewal. He went to his current insurance company and they refused cover, they were not prepared to renew the policy. Part of the reason could have been his three points on the license although I’ve since learned that some insurers have pulled out of the electric market. He then went around the marketplace to find out who would insure him. When he first took out his insurance on the car it was a few hundred pounds, the best he could do now was a premium, including finance charges, of £5,000 pounds. Now that was £4,600 or so plus the interest because he was going to pay for it monthly. So the total cost to him for that insurance was going to be £5,000. That's ridiculous.
Now if you find that when you go and check your insurance, because you may have three points, or because you fit into different categories that the insurers are not happy with or maybe the spec. of the car such as the acceleration, which, in some electric cars is phenomenal. Some of these family cars are accelerating nearly as fast as a Formula One car with some even faster. Whilst you may be aware of the exceptional acceleration on some sportier versions but some family cars are very deceptive. Take for example a standard looking car like a Tesla Y which has got a 0 to 60, I think of about 4.4 seconds. Now that is really really fast. So if you've got three points on your license for speeding, there are insurance companies out there that would say no, not interested, don't wanna insure you, and those that do may charge you a fortune. So if you're looking at the sort of cost that's way beyond your budget because you're only currently paying a few hundred pounds to insure your petrol or your diesel car it’s essential that you check the insurance cost out first.
And if you're selling cars, tell the customer to check the insurance before placing the order. You're doing him no favours by not telling him to carry out this check and then get closer to the time of ordering only to find out that the insurance cost is phenomenal and he actually can't afford it. He's now got to cancel the order. You're better off selling him another car, moving into a different model which has got slower acceleration or a car with lower insurance costs. Not doing so is likely to cause a lot of grief in the marketplace.
If you're supplying electric cars along with finance and are therefore seen as an expert you need to take this advice on board to ensure ‘good customer outcomes’. You should be aware of these insurance issues and make sure that you know how to deal with them. You should also be prepared to compare a number of vehicles on the basis of insurance risk on behalf of the customer. Customers rely on the expertise of those providing the cars so to fail at providing the widest range of options and alternatives could be considered as failing in their jobs. With increasing insurance costs this is vital advice.
If you're going to get on top of the financing of these vehicles to consumers and I don’t mean the consumers that are already using leasing you want to get the people that aren't. As someone looking to acquire an electric car it’s important that you understand the finance options. The vast majority of people are still using PCP, and I have no problem with PCP as I’ll be discussing in future podcasts. But this is the important one. Make sure that before you order your car you check out the insurance costs. I'll be talking about other things such as how to keep the cost down in other podcasts along with all sorts of information that you need if you're going down the route to electric cars, moving from petrol or diesel into electric. So that's all I'm going to say on this one. You'll have to keep following my podcasts in order to understand of the different electric car things that I'm covering.
I'm not covering everything in the book in my podcast. If you want everything because you are considering a car sooner rather than later you will need to buy a copy of the book. If you want a copy go to grahamhilltraining.com. You can download a copy of the book by paying for it on that page, and then you can upgrade and get the training in 2024. There will be training modules that you can look through and then decide which ones you want to use.
And especially if you're offering or selling electric vehicles to consumers, you need to be aware of all these different issues and points that people need to understand before committing to an electric car. As I've made the point before, confused customers don't exist for the simple reason that confused customers never buy, so they can't be confused customers because they don't exist. Get it! Okay, that's it for now. I'm going to move on to the next one. We'll be talking about what you need to have included in the policy when you take it out to ensure that you are properly covered. That's it for now. I've been Graham Hill. Thanks for watching. I'll see you on the next one.