Sunday, October 21, 2007

Message to the Canadian Federal government

I've spoken before about how I felt the Canadian government wasn't doing enough to make fuel efficient cars, especially hybrid cars, affordable enough to make them a viable alternative. The fact is - they're not affordable at all. I've witnessed folks who were considering a new car with fuel economy in mind look at the hybrids and they came to the conclusion that they weren't worth the extra money. A friend of mine said something that I agree with - buying a hybrid in this country doesn't actually save you any money, it just sets you apart as someone who wants to do their part for the environment.

Let's look at a car that comes in both a regular and hybrid model - the Honda Civic. A regular Civic is priced starting at $16,990 whereas a hybrid model is $26,250. If you factor a life expectancy of 500,000km (not unheard of for a Honda), you'd be looking at a total gas savings of $12,250 based on a litre of gas costing $1.00 (which is the case now). At first, that sounds pretty good, but consider that the hybrid cost you $9260 more than the regular model, leaving $2,990 in savings. But now you need to factor in the cost of replacing the batteries, a cost that doesn't exist in a regular car. Figures vary, but I've heard costs in excess of $5,000 to replace the batteries, something that may need to be done every 150,000kms! So our 500,000km car just cost us another $15,000, leaving us $12,000 in the red. The federal government meanwhile, offers Canadians a rebate of $2,000 for buying this car (the most you can get under the ecoAuto program). So now we're only in the red $10,000. By the way, our ecoAuto program offers buyers of a Jeep Compass a $1000 rebate. This vehicle is an SUV (not a hybrid either) that gets worse gas mileage than my Acura TSX.....

Personally, I think this is ridiculous. I haven't met many people who were able to justify the extra cost of a hybrid vehicle, even with gas savings and rebate accounted for. Which is unfortunate, because they really wanted to buy one to do their part. So what is the point? Our government needs to offer consumers much more incentive to switch to these more efficient cars. $2000 is just a drop in the bucket. Darlene made a suggestion - everyone who owns a hybrid gets half off the cost of gas. That basically translates to the government giving their cut of gasoline taxes back to you. Whatever the solution, the carrot has to be bigger. Dealers are complaining that hybrids aren't selling. Is it any wonder?

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