Cost of Ownership Can Sway Hybrid, Electric Car Purchases
University of Kansas researchers have found that five year cost of fuel information isn't always persuasive in helping buyers of small and medium-sized vehicles decide which vehicle to buy, especially when comparing hybrids, plug-ins and electric models against their non-electric competitors. The higher upfront cost premium will typically deter buyers from selecting the electric-drive model.
However, if in addition to or in place of the five year fuel saving information currently displayed on EPA new car stickers, the total cost of vehicle ownership is displayed, survey respondents to the KU study indicated they would likely choose the electric-drive vehicle option. The authors of the study, which appears in the journal Transportation Research: Part A, note that "adding information about total cost of ownership increases the probability that small/mid-sized car consumers express a preference to acquire a conventional hybrid, plug-in hybrid, or a battery-electric vehicle."
The 'total cost of ownership' would include "a metric which accounts for the purchase price, the cost of the fuel, and other costs over the ownership period," they state in the study. These would include "financing, depreciation, registration, maintenance and insurance costs."
Previous studies and reviews have identified a number of hybrid models whose total cost of ownership is less than their non-hybrid offerings. As an example, the study's lead authors, Bradley Lane and Rachel Krause, compared a hybrid versus a non-hybrid car.
"[The] mid-sized gasoline vehicle had an annual fuel cost of $1,845 compared with $1,272 for a hybrid. Still, that difference was not enough to sway consumers to choose a hybrid vehicle. When the researchers changed the EPA label to reveal the total monthly cost of ownership for a gasoline vehicle was $460 compared with $448 for a hybrid, it gave a boost to consumers' preference for hybrid vehicles."
The authors hope that their findings will lead to improved labeling, though they did find that total cost of ownership information did not sway buyers looking to buy small SUVs. Here, apparently, the perception of greater space, safety and visibility, appears to outweigh purely economic concerns.
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