Would You Go Electric for Free Insurance?
The ‘buy a car and get insurance’ shtick has been around the block before.
General Motors experimented last year with giving away insurance as a way to entice buyers, but quietly let the program expire after it failed to bring in crowds of willing customers.
Honda has become the latest to try and lure customers with free insurance, but only on a single model that really shouldn’t need incentives or gimmicks to boost sales: The Honda Fit EV. You would think Honda’s first electric vehicle would be popular enough on its own, but the company hopes its offer of no-cost insurance will help get 1,100 people to sign the dotted line on a lease.
If this story seems suspicious to you, you’re not alone. I read about it and immediately asked myself three questions:
Why has Honda’s first EV flown under the radar when other companies tout their wares as Earth’s savior?
Why only 1,100 vehicles?
Why would a low-volume Honda require any form of incentive, when it could sell a thousand Fits powered by a lawn mower engine if it wanted to?
Honda is notoriously conservative when it comes to new product and could very well be testing the market for future EV demand, hence the low volume production. It could test the market, though, without such a cheesy offer as free insurance on a new vehicle that the Honda faithful should snap up as quick as it rolls off the assembly line. Honda’s reasoning for the insurance offer goes something like this,
Honda officials said they see the offer as a way to remove a barrier to the introduction of their first electric car in the U.S. They were concerned that insurers would have trouble rating the financial risk of covering the repairs of such a low-volume vehicle.
The “barrier of introduction” for first-time EV buyers isn’t insurance. It’s range and re-charging anxiety. Automakers couldn’t care less about insurance costs or the ability to rate the financial risk of insurers. I don’t recall any offers to cover insurance on limited runs of the Acura NSX or Honda S2000. This stinks of insecurity to me, and seems like a sign that even Honda remains leery of electric vehicles.
The Fit EV should have a range of about 83 miles and a recharge time of about 3 hours. There’s no word on how long the insurance policy lasts.
Would an offer of free insurance be enough to get you into a Honda Fit EV?