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Honda offers free insurance to electric Fit buyers

Honda’s insurance option for electric Fit buyers could save a single man living in a Southland suburb as much as $600 a year. But only 1,100 of the cars will be available for lease beginning next month.

The Honda Fit electric vehicle, unveiled at the Los Angeles Auto Show in November, will be available for lease next month. The 36-month, 36,000-mile lease will cost $389 a month plus taxes with no down payment. It includes roadside assistance, all maintenance and the collision insurance. (Allen J. Schaben, Los Angeles Times / June 29, 2012)

Honda Motor Co.’s new electric vehicle comes with an unusual option: collision insurance without any deductible.

It’s the latest enticement to move electric cars off showrooms and narrow the cost gap with less expensive gasoline-powered vehicles.

“It is a really interesting marketing tool,” said Rebecca Lindland, an analyst with IHS Automotive.

Detroit automakers have generally shied away from offering insurance for drivers. General Motors Co. experimented with the concept last year, offering a year of free auto insurance for new-car buyers in Oregon and Washington. GM let the offer expire without expanding the program.

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.

Starting with Nissan Motor Co., large automakers began selling electric cars in late 2010. But sales of the vehicles have been slow, hampered by their limited range and higher price compared with gasoline-powered vehicles. They also require homeowners to install charging stations in their garages, an expense that can run $1,500 to $2,500, depending on the home.


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