Drivers willing to pay for more 'green' cars
- But they want tax breaks and cheaper insurance in return
- And faster “green cars” would help too
Drivers are happy to pay more for cars that are proven to be better for the environment – but only up to a point. And they want tax breaks and cheaper insurance in return, new research from Virgin Money Car Insurance shows*.
On average drivers are willing to pay around 4.8 per cent more for a new car – adding as much as £611 to the price of a Ford Focus LX** - compared with a rival if it was proved to have low carbon emissions. However the major incentives needed to convince more drivers to go green are road tax reductions, lower insurance costs and faster cars.
The Virgin Money Car Insurance study was launched to find out what would convince drivers to switch to cars that are better for the environment as political and consumer pressure mounts for action on cutting carbon emissions. The European Commission has ordered car makers to cut carbon emissions by 18 per cent by 2012 – a move car firms say will force up prices for new cars.
Research shows around 41 per cent of adults – around 18.9 million people – would be willing to pay more for a car that is proved to have low carbon emissions. Around six per cent would be willing to pay between 11 per cent and 30 per cent extra.
But when asked what three factors apart from price would tip the decision to buy a “green car” overwhelmingly people picked cuts in road tax (73%) and lower insurance premiums (71%) with better acceleration and cruising speed a distant third (32%).
Jason Wyer-Smith of Virgin Money Car Insurance said: “It is encouraging that drivers want to go green and are willing to put their money where their mouths are by paying a bit extra.
“However there needs to be more carrot and less stick to encourage more people to make the move into lower carbon emission motoring. Insurers can do their bit by looking at special deals for greener cars but the Government has to play its part too. Lower road tax is seen as crucial in encouraging people to change their buying habits.
“Too often it seems as if people are being threatened with higher petrol prices and more expensive parking permits plus higher road tax rather than offered positive incentives.”
The tables below show the improvements most likely to convince people to switch to lower carbon emission cars and how much people would be willing to pay extra for a lower emission car.
| FACTOR | WHAT THREE FACTORS WOULD CONVINCE YOU TO CONSIDER BUYING A GREEN CAR? |
|---|---|
| Road tax reductions | 73% |
| Lower insurance costs | 71% |
| Better acceleration/cruising speed | 32% |
| Improved practicality | 26% |
| Design/looks | 20% |
| Smoother engine | 19% |
| Specific labelling to show car is green | 11% |
| Image/style | 10% |
| None of these | 8% |
| Colour | 2% |
| AMOUNT EXTRA PEOPLE ARE WILLING TO PAY FOR A LOW EMISSIONS CAR | PERCENTAGE OF PEOPLE |
|---|---|
| Zero | 35% |
| 0% to 5% | 22% |
| 6% to 10% | 14% |
| 11% to 20% | 5% |
| 21% to 30% | 1% |
| Don't know | 10% |
| Not applicable | 14% |
Men (42%) compared with women (28%) are much less likely to pay more for a low emissions car. Men are also more likely to buy a green car if it is proved to have better acceleration – 37 per cent against 26 per cent of women.
Drivers can find out more about Vehicle Excise Duty rates from the Vehicle Certification Agency at www.vca.gov.uk which includes a calculator to work out the road tax for any particular car. The DVLA website at www.dvla.gov.uk also outlines road tax rates or you can call the DVLA on 0845 605222.
-Ends-
Notes to editors:
* Research conducted by YouGov among 2,255 GB adults between January 5th and 8th 2007
** Based on Ford Focus LX priced at £12,745. Source www.ford.co.uk
For further information please call Jason Wyer-Smith at Virgin Money Car Insurance on 01603 215624
Kevan Reilly/Billy Partridge/George Ullstein at Citigate Dewe Rogerson on 0207 638 9571.
About Virgin Money Car Insurance:
Virgin Money Car Insurance is available online at www.virginmoney.com and over the phone via 0800 051 0588.
Unlike many other insurers, Virgin Money Car Insurance does not charge its customers extra for paying their premiums by monthly direct debit. (Subject to status)
- Virgin Money is Virgin’s financial services arm and was established in 1995.
Virgin Money has over two million customers and offers a wide range of financial products across lending (e.g. credit cards and personal loans), savings (e.g. deposits, investments and pensions) and protection (e.g. life insurance, home insurance and car insurance) to the UK market.
Virgin Car Insurance is promoted by Virgin Money Personal Financial Service Ltd and underwritten by UK Insurance Ltd, The Wharf, Neville Street, Leeds, LS1 4AZ. Virgin Money and UK Insurance Ltd are authorised and regulated by the Financial Services Authority. Calls may be monitored and recorded.
