Saving money drives hybrid car sales

TEMPE — Hybrid cars: They’re part gas-powered, part battery-powered, and all the rage among American do-gooders looking to help the environment.

But are these vehicles really planetary saviors? Are they reliable? Are they worth the price? With gas prices peaking, why aren’t people snatching more of them up?

Several experts, analysts, politicians and consumers say the true benefits of owning hybrid cars come over the long run, and that all Americans should buying one soon for economic and environmental reasons.

Those two factors make car owners like Theresa LuPone, 21, look past the Toyota Prius’ steep price tag (about $25,000 new).

“I’m really environmentally conscious, and I want to do my part with the whole ‘Saving the Globe’ thing,” said LuPone, an Arizona State University student.

U.S., Arizona trends go green

Toyota, Honda and Ford, the leaders in hybrid car sales, sold 251,862 hybrids in 2006, according to hybridcars.com. Next year, the nation can expect automakers to roll out 12 new hybrid models for cars, SUVs, minivans and trucks.

The new models include the Audi Q7, Porsche Cayenne, Chevy Tahoe, Lexus GS 450h, Saturn Vue, Mercury Mariner, Chevy Silverado and GMC Sierra, among others.

In Arizona, increased hybrid sales have put the state in the Top 20 for hybrid car ownership. Last year, there were 5,542 newly registered hybrids here, putting Arizona in 16th place between Colorado and Georgia, according to R.L. Polk & Co., a worldwide auto industry analyst.

Fuel costs drive demand

Yet for all the hype of helping the environment, a nationwide poll found that saving money – not the planet – was the No. 1 reason consumers had for buying hybrids since the vehicles hit the U.S. market six years ago.

According to the Polk Center for Automotive Studies:
• 70% bought hybrids for tax breaks and because of high gas prices,
• 21% bought to save the environment and cause less air pollution,
• 9% bought because they were “futurists” – supporters of the new technology and design of hybrid vehicles.

Auto industry experts say rising gas prices are playing a leading role among car consumers. As summer creeps closer, those prices will continue to rise and make driving costs for new, non-hybrid vehicles tougher to bear.

“I think we are all interested in using energy more efficiently in the future,” said Arizona state Sen. Robert Blendu, R-Litchfield Park. “I think that going forward, we are going to think about how to do that.”

While gas prices rose from $2.58 in March to currently $2.86 average for regular fuel per gallon, a small car rental company in Phoenix is the first in the nation to offer hybrid vehicles.

Once the hybrid vehicle came into the market, EV Rental Cars wanted to provide the most technologically advanced environmental vehicles to the public, co-owner Rudy Madrigal said.

“People like them and they’re in really high demand,” Madrigal said.

Hybrid incentives help, too

New laws make hybrids attractive. Taxpayers who purchase qualified vehicles can receive a tax credit for buying a hybrid, whose price tag may be a few thousand dollars more than its non-hybrid cousin.

“If you purchased a new hybrid gas-electric car or truck in 2006, you are eligible for a tax credit of up to $3,400,” Ariel Capital Management president Melody Hobson told ABC News in March. “The amount of credit depends on the make and fuel economy of the vehicle purchased.”

The Toyota Prius starts at around $23,000, for example, and the Honda Accord Hybrid starts at $31,000.

Experts suggest those interested in owning a hybrid should act now before the current incentives run out.

“Early hybrid owners are those who will benefit the most because the tax credit will phase out once a manufacturer has sold a total of 60,000 hybrid vehicles, regardless of model,” Hobson said. “Once the cap is reached, the credit will begin to phase out during the second quarter after the quarter in which the company sells it’s 60,000th hybrid.”

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