Ever since Ferdinand Porsche developed the world’s first gasoline-electric vehicle in 1900 (pictured), manufacturers have toyed with the concept of using alternate energy sources to drive gasoline-powered cars.
But the hybrid gas-electric vehicle did not become widely available until the Toyota Prius was introduced into Japan in 1997.
Once the novelty of the eco-conscious driver, hybrids are now also purchased by those wanting to reduce the cost of their commute. By February 2009, Toyota had sold 1 million units in the U.S. alone and global sales of hybrids (all manufacturers) hit 3 million in July 2010.
However, a new study by Mitchell International proves that hybrids cost more to repair after being damaged. Mechanical repairs too, are more expensive.
Mitchell’s VP Greg Horn: “From a claims severity and frequency perspective, hybrid vehicles represent a more costly overall risk to insure than their gas-only powered cousins.” Horn added, “Powering these higher hybrid claims costs is a significant change in the hybrid driver profile—from the eco-conscious consumer to a new base of buyers interested in cutting fuel expenses associated with long commutes. The result is an entirely new risk profile for hybrid vehicle drivers, who will likely see their insurance rates continue to increase.”
The economies of driving a hybrid may be a double-edged sword: fewer stops at the gas station, but a heavier bill at insurance renewal time.
- sources – Mitchell International, Inc. industry trends report, August 2010; Wikipedia
Tags: Automobile, claims, coverage, damage, economy, insurance, premium, rating, risk
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Graham Robinson
August 13, 2010 at 10:20 am
Would this be the same case if the majority of cars were gasoline-electric? Or is it more expensive because it is a new technology and not very many people are using them?
It would be a shame to not continue with fuel alternatives becuase it is more expensive in the long run.
As always a good read.
Thanks
pl
August 13, 2010 at 1:12 pm
I just thinks its wonderfull there is a vehicle on the market that keeps the enviroment , one car smog free.
Even though cost are higher to replace or repair.,
Insurance Companies should permit a small discount on insurance premiums to show their concern and show their part of keeping clean , smog , free air.
KM
August 16, 2010 at 2:19 pm
It will be interesting to see how the 100% electric cars will compare to the hybrids in repair or replacement costs.
cd
August 16, 2010 at 4:57 pm
The higher insurance premiums and costs for repairing these Hybrids will, in time, become more competitive with the increasing numbers of these vehicles sold. Man has no alternative but to move in this direction.
Brian Heltcher
August 16, 2010 at 8:59 pm
It’s concerning enough to realize these vehicles will be much costlier to repair for at least another 10 years until further mass production and market acceptance is achieved. What about the fact these vehicles require numerous braking applications to recharge the battery during driving activity? Sounds to me that not only are they going to cost more to repair after damages occur, but they are going to be purchased and used by metropolitan based drivers. Insurance cost will get spread between us all, not just the “environmentally concious” GTA driver!!!
Kim H
August 16, 2010 at 9:19 pm
I’m hoping that somebody will develop a fuel that will work in our everyday cars and allow us to use the engines we now run efficiently and cleanly. We could all afford a slightly costlier fuel much easier than thousands of dollars more for an electric car.
M.R.
August 17, 2010 at 8:40 am
It’s kind of like a catch 22…Either we buy these environmentlly friendly vehicles at a costly price or “don’t” and eventually end up paying more insurance because of these vehicles?
HC
August 17, 2010 at 2:58 pm
As nice as it is to know we are helping the environment by driving these vehicles, it seems every aspect of them is and will be way too costly. Can we put a price on the health of the environment?
LR
August 17, 2010 at 4:09 pm
It’s nice to know that we are helping the environment with the Hybrid vehicles. Unitl more consumers start purchasing them the cost to repair will remain high and so will the insurance rates.
GK
August 18, 2010 at 8:53 am
I will continue to drive my hemi!
SD
August 18, 2010 at 9:04 am
I am sure that those insureds purchasing a hybrid vehicle
think that their insurance costs will be lower. One more thing for us as brokers to explain to them as trusted advisors.
HG
August 18, 2010 at 9:05 am
public who are concern with keeping the environment clean will keep buying Hybrid vehicles. The cost of insurance for the vehicle is not their major concerned
SL
August 18, 2010 at 9:41 am
There are lots of ways to reduce our enviro footprint …car pooling,riding a bicycle,walking or buying a smaller fuel efficient car. In time to come, further hybrid technology will bring prices down to be more affordable for all, regarding purchase, mechanical & damage repair costs…these vehicles are just to new on the market.
jp
August 18, 2010 at 2:18 pm
just another hard sell for the broker….most people would think they would save money driving an environmentally friendly vehicle.
se
August 18, 2010 at 2:37 pm
the insurance companies may have to step up to the plate and come up with some sort of “hybrid car discount” to be applied to policies.
MB
August 18, 2010 at 5:15 pm
It’s funny how I have to have new things, whether it’s cars, computers or home…and the cost is almost always more expensive than a similar product built with old technology, or of a previous model and yet when it breaks down, I always curse the manufacturer, seller or even my insurance company or broker…then I realized, no one makes me purchase my “new stuff” except for me. So why should I be upset for what it costs to repair…if I buy it, I should be responsible to pay for it…even if it breaks down. If I accept the deal, then I probably shouldn’t grumble.
gc
August 19, 2010 at 9:31 am
If it costs more to repair these vehicles, then it will be more expensive to insure them as well.