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The Honolulu Advertiser
Posted on: Tuesday, May 27, 2008

HYBRIDS ZOOM
Hawaii motorists flock to gas sippers

 •  TheBus plans to expand hybrid fleet

By Lynda Arakawa
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

Kevin and Lynn Quinn own two Toyota Priuses. Kevin Quinn says he fills up about half as often as he did with his previous car.

ANDREW SHIMABUKU | The Honolulu Advertiser

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PROS

• Fuel efficiency

• Selection of vehicles range from compact to luxury SUV

• Lower emissions

CONS

• Price tag is higher

• Limited quantities

• Potential cost of battery replacement

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Hawaii news photo - The Honolulu Advertiser

Inventory at Servco Pacific Inc.’s Toyota Hawaii includes, from left, a Prius, Camry Hybrid and Highlander Hybrid. Hybrid cars are enjoying a surge in sales as gas prices continue to climb.￸

REBECCA BREYER | The Honolulu Advertiser

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HYBRID TAX CREDIT

The federal Alternative Motor Vehicle Credit is available for certain hybrid vehicles, with the credit amount depending on the model of the car and when it is purchased.

The IRS has phased out the alternative motor vehicle credit for the popular Toyota and Lexus hybrids. Reduced tax credits for Honda hybrids purchased this year will shrink further in July and end beginning in 2009.

The IRS begins phasing out the tax credit in the second calendar quarter after the quarter in which the manufacturer records its 60,000th sale of hybrids and alternative fuel vehicles.

People who buy a 2008 two-wheel drive Ford Escape Hybrid or Mercury Mariner Hybrid are eligible for a $3,000 credit, according to the IRS Web site. The four-wheel-drive versions of those vehicles qualify for a $2,200 credit.

For more information, visit www.irs.gov.

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As gasoline prices on O'ahu reach $4 a gallon, drivers are snapping up hybrid gas-electric vehicles to ease their pain at the pump.

Hybrids have been around for several years, but their higher asking price and relatively new technology had been a deterrent for consumers. But with some models getting more than 45 miles per gallon when a fill-up can now cost more than $50, hybrids are becoming more popular.

"We can't keep them on the lot," Honolulu Ford sales manager Bill Wiltshire said last week of the Ford Escape Hybrid. "I've got one in right now — this just came in the last 24 hours, and we probably got five people to call on it. Ford could probably sell four times as many as they could manufacture right now."

The sentiment is the same at other Hawai'i auto dealers. Demand for some models has outpaced supply. And everywhere, the question on auto buyers' lips is: How many miles per gallon does it get?

Sales of Toyota's Prius in the first quarter of this year are up 41 percent year-over-year. Honda Civic Hybrid sales have also grown.

There were 371 new hybrid vehicles registered in Hawai'i in the first quarter of this year, up about 8 percent over the same period last year, according to Experian Automotive.

"Last month we were sold out," said Honda Windward general manager Michael Stoebner. "We just got a shipment in, and on that shipment we had four to five that were pre-sold before they even landed.

"At first, when the hybrids came out ... not a lot of people would pay the difference for the technology. But now that the (gas) prices are quite a bit higher and people are keeping their cars a lot longer, the hybrids are becoming more popular."

BRIGHT SPOT IN MARKET

The trend is evident nationwide.

Hybrid cars make up only about 3 percent of U.S. car sales, but their share is growing. Hybrid sales shot up 25 percent during the first four months this year compared with the same period last year.

Last month, sales surged 58 percent, outpacing the overall April sales gain of 18 percent for small cars nationally. The growth in hybrid sales also comes as total new-vehicle sales are slowing.

"Hybrids are a very bright point," said Virgil Segue, general sales manager of Mike McKenna's Windward Ford. Sales of Ford F-150 trucks, on the other hand, have dropped, mainly because of gas prices, he said. "Basically, any of your small economy cars are selling more."

Kailua resident Dana Pagalaboyd and her husband traded in his "baby" — a Ford F-150 pickup — for a more fuel-efficient Ford Escape hybrid in March.

"He figured out in maybe a month or so he'd be paying $80 a week for gas and only going to work and home," she said. "It's kind of an expensive mode of transportation just to get to work. The price of gas had a lot to do with it."

Pagalaboyd drives the hybrid, and her husband drives her previous car, a Saturn Vue. She said they will probably trade in the Saturn for another hybrid in a couple of years.

"I know gas isn't going to go down," she said. "It's only going to go up."

'A LOT OF INTEREST'

Statewide, Toyota Prius sales for the first quarter of the year totaled 182, up 41 percent from the same period last year, said Rick Ching, executive vice president of Servco Pacific Inc.'s Toyota Hawaii.

"When people come in, we notice they're asking about miles per gallon," Ching said. "Our hybrid sales were strong even prior to the recent spike in gas prices, but we have noticed even more activity.

"We're running short of the Prius currently because of the strong demand. We have some supply on the ground, but many of our vehicles are spoken for. ... The demand is outstripping our current supply."

Kevin Quinn bought a Toyota Prius as a company car in March to save money on gas and help reduce emissions. A month later, his wife bought a Prius as well.

Quinn, an environmental consultant who drives about 500 miles a week, said he fills up about half as often as he did when he was driving his previous car, a Mazda Protege.

"We're trying to get as free from inflation as possible," he said, adding that he has a solar photovoltaic system for his Wai'alae Iki home. "And the other reason is it does save on the greenhouse gas emissions."

Quinn's Prius has also caught the attention of friends and others.

"There seems to be a lot of interest in it," he said. "I went to a construction site, and a construction worker I know flagged me down and ... asked me all kinds of questions about gas mileage."

LONG-TERM VALUE

Hybrid cars combine an electric motor with a gasoline engine and don't need to be plugged into an external charger. The electric motor runs the vehicle when it is charged, with the gasoline engine taking over when needed.

Hybrids generally cost at least a few thousand dollars more than their conventional engine counterparts, but they could make economic sense for drivers who plan to keep their hybrid for several years. People who buy certain hybrid vehicles may also be eligible for a tax credit, with the amount depending on the model of the car and when it was purchased.

For example, the suggested starting price of the 2008 Honda Civic Hybrid is $22,600, about $3,090 more than the automatic transmission Civic EX sedan with a conventional engine, according to Honda's Web site.

Factoring in the $1,050 tax credit and using Friday's average price of regular gasoline in Honolulu at $3.90, a driver averaging 10,000 miles a year would take about 4.9 years to make up the price difference. If gas prices continue to rise as expected or if more miles are driven, the break-even point will arrive faster.

FEW DOWNSIDES

The potential cost of a few thousand dollars to replace the hybrid system battery pack could be an issue for some drivers after the system's warranty expires. Some warranties range from 80,000 to 100,000 miles or eight years. At least one automaker, Honda, has a recycling program that can offset the price.

Auto dealers say so far battery packs have held up well and that the cost for battery packs has been falling over the years. One Honda official said some customers have racked up close to 200,000 miles on their hybrids without running into problems with the battery pack.

Those who have owned hybrid vehicles for several years said there has been little or no downside so far.

Kane'ohe resident Bill Sager said he's very happy with the Prius he bought in 2003, although he noted a couple of issues, including that mechanics had to reprogram his vehicle when his standard car battery — not the hybrid system battery — died.

Sager, 77, said he would recommend the Prius.

"I think the conservation, environmental side of things are important to people like me, but even if they weren't, I think this car pays for itself in gas mileage, and it certainly has in performance," he said.

The Los Angeles Times contributed to this report.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.

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