Al Root
Tesla's avant-garde Cybertruck is a unique vehicle -- and that's creating some unique challenges for owners and auto insurers.
Recently, stories circulated on social media indicating Geico wasn't willing to insure Cybertrucks. That isn't the case, according to the company, which is owned by Warren Buffett's conglomerate Berkshire Hathaway.
"Geico has private passenger automobile $(PPA)$ insurance available for the Tesla Cybertruck," said the insurer in an emailed statement.
Some caveats help explain recent confusion. "Because of its gross weight and potential challenges with parts availability for repair shops, some customers may have received notices stating that PPA insurance would not be renewed for this vehicle," added the company. "However, policies for this vehicle have always been available through our commercial insurance division and now remain available via PPA as well."
Geico is in the process of reaching out to any customers who may have received a nonrenewal notice.
To be sure, Cybertruck is big. It weighs up to 9,000 pounds when loaded with passengers and cargo. The comparable figures for a Ford F-150 and Toyota Corolla are roughly 7,000 and 3,600 pounds, respectively.
So Cybertruck owners can get insurance. How much is it going to cost though?
Barron's got three quotes from three different insurers, including Geico. For us, insuring a Cybertruck would run roughly $200 a month, or about 40% more than insuring a high-end Ford F-150 pickup truck.
There are some good reasons Cybertruck is more expensive. For starters, the Cybertruck we designed cost roughly 30% more than the F-150 trim selected. The cost of the car always impacts the price of insurance.
So does the cost for repairs and replacement parts. Cybertruck is new and partially made from stainless steel, creating some challenges for auto repair and body shops. The repair portion of Barron's Cybertruck insurance quotes was roughly twice as high as the F-150 quotes. The difference worked out to about $50 a month.
Don't forget that upfront purchase and repair costs are only the tip of the insurance iceberg. Many more things are considered including expected mileage, where the car is kept, and the likelihood of theft, as well as household factors including education, financing, and driving record.
State liability laws can impact pricing, too. New Yorkers pay about 50% more for insurance than drivers in Connecticut, according to Bankrate.com.
Barron's quotes apply to Connecticut. We selected no vehicle financing and low mileage -- the theoretical Cybertruck wasn't a primary commuting or work vehicle -- and the driving record is clean. Different options might have raised the price to insure the truck by roughly 25% to 30%.
It's easy to see a driver paying $3,000 to $4,500 a year to insure a Cybertruck, depending on where they live. That's easily 50% more than the average vehicle, but not all that much more considering a Cybertruck costs roughly twice as much as the average new car.
Everyone is feeling the pinch of higher insurance costs these days. Prices are up roughly 40% compared with prepandemic levels, according to the Bureau of Labor Statistics. That's added roughly $50 to $100 to the average household's monthly costs.
As for the Cybertruck, if insurance costs are too high, there's a simple solution: Buy a cheaper car.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
October 12, 2024 02:30 ET (06:30 GMT)
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