Fuel economy just not worth the extra upfront costs?
The Honda Insight is one of the cheapest cars to own after 5 years
After 5 years, the Honda Insight hybrid is one of the Top Ten Cheapest Cars to own according to a recent Kipplinger report. Yet, in May, the Honda CR-Z hybrid — a two seater — outsold the Insight hybrid.
Why are sales for the most cost-effective hybrid and one of the most cost-effective vehicles available after 5 years so sluggish? What does this mean for the future of hybrid and plug-in vehicles?
In May, sales of the the Honda Insight hybrid were down more than 18 percent, to just 1,435 units. Sure, the Japanese earthquake and tsunami helped drive Insight sales lower. Regardless, even if Honda Insight supplies were unaffected by the earthquake, sales would have still been far under 3000 vehicles.
On the other hand, most of the other cars on Kipplinger’s Top 10 list, such as the Nissan Versa or the Ford Focus SE far outsold the Insight. Yet, even the cheapest offering, the Versa, offers little financial advantage compared to the Insight after 5 years of ownership. Even more interesting, after 5 years the Insight is cheaper to own than many Focus SE’s. Nevertheless, the Focus sold more than 22,000 units in May — more than 20,000 more sales than the Insight.
So, what gives?
Is the Insight just that ugly? Do the Focus SE and the Versa offer just so much more car?
Or, is it all about price?
Compared to the Versa, for instance, the Insight costs about $7000 more. In fact, on average compared to the other Top 10 most cost-effective cars, the Insight is $4000 — $5000 more up front.
Sure, the Insight makes up these costs with its better fuel economy, cheaper maintenance costs, etc., over time, but 5 years appears just too long to wait, especially when costs like finance charges are added into the equation.
Obviously, the sale’s success of the Insight versus other cost-effective leaders doesn’t define the potential of battery powered cars. Nonetheless, the lack of sale’s success for the Insight compared to these other vehicles seems to validate what many consumer studies have suggested: upfront costs are critical to new car buyers.
If given a choice between cheaper upfront costs or better long term fuel economy, Americans overwhelmingly choose cheaper upfront costs.
Soon, Toyota could launch an even cheaper and more cost-effective hybrid car with the Prius C. It’ll be interesting to see what kinds of sale’s numbers such a vehicle can churn out.
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