Soaring oil prices fuel green car drive

Published on Saturday 31 May 2008 19:59

SOARING fuel prices have led to a big increase in the number of motorists opting for 'green cars' this year, according to new industry figures.

Sales of alternative fuel and hybrid and electric cars increased by 14% in the first four months of the year, compared with the same period in 2007, as drivers turned their backs on old-fashioned gas-guzzlers.

The increase is even more remarkable given a 23% slump in car sales overall since the beginning of the year.

Consumers are also checking out cars with smaller engines to save on petrol. The price of fuel has risen from about 90p a litre to a typical 1.14 for unleaded and 1.28 for diesel in Scotland's cities. Some garages on the islands charge as much as 1.42 for a litre of diesel.

In addition, changes in Vehicle Excise Duty (VED) will mean owners of thirstier and more polluting cars will pay road tax of up to 440 a year from 2009, while some of the most frugal cars will be zero-rated and get a free tax disc.

The latest figures from the Society of Motor Manufacturers and Traders (SMMT) show that sales of 'alternative fuel' cars rose from 5,235 to 5,990 between January and the end of April. Car sales as a whole fell, from 858,639 to 659,017.

Electric, hybrid and gas-powered vehicles are regarded as being easier on the environment than most petrol or diesel cars, although some of the newest diesel cars have lower carbon dioxide emissions than their hybrid counterparts.

Cars running on Liquid Petroleum Gas (LPG) produce less carbon dioxide and fewer other pollutants than petrol and diesel and cost less to run per mile.

A litre of LPG costs about 55p at the pump. Hybrid electric cars run by recharging batteries and can run on battery alone in cities, during which time they produce no emissions at all. Electric cars are becoming available which can be recharged from the mains overnight and then travel for over 100 miles on a full charge.

But alternative fuel cars are pricier. A Toyota Prius hybrid costs 17,000 while a small G-Wiz hatchback electric car will set you back 14,000. LPG cars typically cost about 2,000 more than the equivalent diesel and have slightly more sluggish performance.

An SMMT spokeswoman said drivers were looking for cars that would be cheaper to run and tax.

Traders have also reported a move toward smaller engines as drivers try to beat the rise in vehicle excise duties. A survey for motor industry analyst CAP found that 69% of car dealers were reporting a "definite move toward smaller engine sizes".

Scottish Green MSP Patrick Harvie said: "More and more people are realising that neither their wallets nor the climate can afford to stick with the petrol engine. This looks like the tipping point, where government should be supporting alternative technologies, cutting costs for public transport and helping people who want to save money and save the planet."

Stuart Hay, of Friends of the Earth Scotland, said: "Depending on how they're driven, some of these alternative vehicles can reduce emissions, so it's good to see people are become more aware of this and making buying decisions based on it."

A Treasury source said: "This is very encouraging. This is the change we have been trying to make happen through changes in the tax regime."

Mike Hinds, of CAP, said: "Three factors are converging on the market: fuel, rising VED and consumer caution – the credit crunch, increased household inflation, uncertainty and so on.

"It is CAP's belief that many consumers are currently unwilling, rather than unable, to spend on 'big ticket' purchases like cars. A 'wait and see' approach is being widely adopted, which will inevitably mean a slow market for some time to come."

Kieran Puffett, editor of the Parker's car sales guide, added: "There is a definite change in what people are going to be looking for. The cost of road tax is increasingly going to be a factor, while it was not in the past.

"And buyers have to be very careful not to be caught out. A lot of cars which people would not expect to be that expensive will cost a lot more in car tax than you would expect."