Hybrid Vehicles Cost Effective Only If Tax Break Provided
The following article reports that Convential Vehicles are still cheaper than a Hybrid vehicle. But it is encouraging that the early adopters of the hybrid vehicle technology are driving up demand, volume and as a result lowering the price and increasing public awareness.
Some of the current available hybrid automobiles are the Toyota Camry Hybrid, the Ford Escape Hybrid, the Lexus Hybrid, Toyota Highlander Hybrid, Saturn Vue Hybrid. By creating a vehicle for markets such as Hybrid Mini Van, Hybrid SUV, Hybrid Truck, and Hybrid Bicycle; the consumer will have many choices to purchase the hybrid automobile that works for their application.
The extra cost for choosing the Hybrid vehicle is disclosed in this article.
VANCOUVER – It’s cheaper to buy and run a new hybrid-electric vehicle in British Columbia than a comparable gas-powered model when you look at all the costs incurred over a five-year period, according to a B.C. Automobile Association study.
The study — which considered purchase price, fuel costs and a provincial tax credit, and assumed much lower financing costs for hybrids — said that in six out of seven vehicles examined, it was cheaper over the long term to buy a hybrid. The only exception was the Ford Escape hybrid, which worked out to be $1,957 more expensive to buy and operate for five years than its gas-fed equivalent.
BCAA rep Norm Hait said rising fuel costs have created greater savings for hybrid buyers, noting an association study last year, assuming fuel costs of 95 cents a litre, found hybrid vehicles were slightly more expensive to buy and operate over five years than conventional vehicles. But with the latest study assuming fuel costs of $1.15 a litre, it becomes cheaper to operate a hybrid.
The study found the total cost of buying a new Toyota Highlander hybrid is about $50,000, compared with $44,800 for a conventional model. But when you consider an estimated $3,565 in fuel savings over five years and a lower financing rate of 5.75 per cent available at some financial institutions for hybrids (compared with 8.75 per cent for other vehicles), the total cost of buying and operating the hybrid for five years is $844 less than its gasoline-engine counterpart — $63,426 compared with $64,270. B.C. buyers get a $2,000 provincial tax break when they buy a new hybrid. Without the tax break available only in B.C. and favourable financing, non-hybrids are still cheaper.
Canadian auto industry analyst Richard Cooper agrees hybrid vehicles can save buyers money by lowering their fuel bills, but noted maintenance costs are unknown. The study assumes maintenance costs for hybrid and conventional vehicles will be the same. But “I don’t think there’s enough of a track record yet,” Cooper said.
Bruce Constantineau
Vancouver Sun; CanWest News Service
© The Edmonton Journal 2006
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