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Are hybrid cars really better?

From a purely selfless point of view, hybrid cars are clearly better for the environment. They are much more fuel efficient and so produces fewer emissions and lower quantities of damaging greenhouse gases. But for those of us who are more concerned with paying the bills in these difficult times, are hybrid cars better for your wallet and for your everyday driving?

Are hybrid cars more expensive?

Like diesels, hybrid cars are generally more expensive than the equivalent petrol model and are more expensive to maintain.

An American study of 45 hybrid cars found that they were on average 25% more expensive to own over the life of the vehicle. Even hybrid car insurance is more expensive because the vehicle costs more to replace and often requires more expensive parts. You may also need to locate specialist mechanics to repair them following an accident.

In the UK, some of this extra cost is offset by lower taxes. You will pay little or no road fund licence on a hybrid car, you’ll pay less income tax if you have a hybrid as a company car and you will also be exempt from the London congestion charge. Plus, of course, you will use substantially less fuel.

Are hybrid cars the future?

Hybrid cars are certainly growing in popularity, with major manufacturers such as Volkswagen and Ford joining the trailblazers at Honda and Toyota in producing hybrids as standard in any new model range. Even so, hybrids only account for just a small percentage of all vehicles sold at present. However, experts believe that this could soon change.

Many analysts expect the ‘hybrid premium’ on new car prices to disappear soon, with Ford already launching a hybrid model in the US at the same price as the petrol alternative.

As with all new technology, the price will inevitably come down as demand rises and the new becomes the norm. This will make owning a hybrid car much more cost effective and attract more buyers, which in turn will bring prices down further. Wider ownership will also bring down insurance, as repairs and parts will become cheaper and easier to find.

What will determine the future of hybrid cars?

In truth, the future of hybrid cars will depend on a number of factors, over which the car manufacturers have no control.

  • Sales of hybrid cars will be greatly affected by public opinion on the environment and global warming. If environmental awareness shifts from activists to mainstream, then hybrid sales will quickly follow.
  • The price of fuel will also have a significant effect. If there is conflict or unrest that disrupts oil supplies, sending fuel prices up even higher, then the savings of hybrids will become much more attractive.
  • The cost to insure them. If van & car insurance companies deem hybrid vehicles and drivers to be a better risk then the cost of insurance may come down and be less than that of the equivalent standard vehicle.

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One Quote Direct Insurance Services Limited trading as Octagon Insurance Services is an appointed representative of Europa Group Limited and acts as a credit broker and not a lender in relation to premium finance contracts. Registered as a limited company in England and Wales No. 5479983. Europa Group Limited is authorised and regulated by the Financial Conduct Authority, Financial Services Register No. 309794. Registered office: Europa House, Midland Way, Thornbury, Bristol, BS35 2JX.

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