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FINANCIAL CHRONICLE™ » FUN CHRONICLE™ » Hybrids offer great value for money but are they a wise bet?

Hybrids offer great value for money but are they a wise bet?

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milanka

milanka
Vice President - Equity Analytics
Vice President - Equity Analytics
At around Rs 3.5 million, a used Toyota Prius or a Honda Insight is a steal, compared to a Corolla or a Civic made by the same manufacturers. Hybrid vehicles, which switch to an electric engine when stuck in traffic, travel an additional 10 or more kilometers per liter.

Higher fuel prices and the government tax incentive on energy efficient vehicles have made hybrids a popular choice. Toyota's Prius and Honda Insight are the two most popular hybrids in Sri Lanka. Sales of other Honda models like the hybrid Civic and CR-Z, a two door sports coupe, are also picking up.

Hybrid conversion kits are also in the market. The kit, currently available in the US, adds a set of batteries that kick in when the vehicle is idle, keeping the heating, radio and the air conditioning running, without wearing out the standard car battery, similar to hybrids. This increases the number of kilometers per liter. But the technology is at an early stage.

Top 5 things to consider when buying a hybrid in Sri Lanka

1. Batteries are expected to last the vehicle's lifetime, estimated at 290,000 kilometers. The batteries usually come with an eight year or 160,000 kilometers warranty from the manufacturer. However manufacturer warranties do not apply to used cars imported here.

2. The second generation Toyota Prius, currently in the market, is the most fuel efficient hybrid model, with a reported 22 kilometers per liter city running mileage. Running on an electric motor also reduces wear and tear. So repairs of the gas engine are fewer during the early life of the car.


3. Sri Lanka does not have any trained hybrid repair technicians. But users across the world also reported fewer problems compared to their fuel guzzling counterparts. Lower wear and tear also means cheaper maintenance. Toyota Lanka and the Honda dealership say they will test the car locally and train technicians before they instroduce it to the market.

4. Hybrids are registered as petrol vehicles as it is the main fuel source. In the registration papers however, for fuel type, it will indicate petrol and electric.

5. Insurance: A small chunk of the fuel saving is absorbed by the higher insurance premium as insurers add the additional cost of replacing the battery and the electric motor in case of accident damage. One insurer quoted annual premium at Rs 98,000 for a Rs 3.2 million hybrid, but said some discounts may appy like an upfront no claims bonus.
http://www.lbr.lk/fullstory.php?nid=201105232116598836

http://forum.srilankaequity.com/u188
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