Are you thinking about going “green” when purchasing your next vehicle? If green is on your horizon, then you’ll want to browse through these frequently asked questions.
What are green vehicles?
Green vehicles are powered, in whole or in part, by fuel other than gasoline. “They include hybrid vehicles, which combine gasoline and an electric motor, and electric cars, which are powered by batteries,” explains Chartered Accountant Anil Chawla, a partner with Deloitte & Touche LLP in Toronto. “Other types are fuelled by ethanol, compressed natural gas and diesel.”
Are they widely available?
“The most common ones are hybrids,” says Chawla. “The other types are available, but you need to make sure you have access to fuel sources, such as charging stations for electric cars or fuel stations that provide ethanol, natural gas and diesel.” Research is underway on compressed air and hydrogen-powered vehicles, but they aren’t yet available.
Are they really environmentally friendly?
“Electric cars usually have zero emissions,” says Chawla. “Hybrids, compressed natural gas, ethanol and diesel are more environmentally friendly than gasoline-powered vehicles, but still produce emissions.” It’s also important to keep the entire environmental picture in mind; while ethanol may create less air pollution, there are concerns that it takes more energy to make ethanol than are returned in fuel savings.
What are the pros and cons of green cars?
“The biggest pro is that they are better for the environment,” says Chawla. “The biggest con is that they cost more — most hybrids cost $3,000 to $5,000 more. However, keep in mind that government incentives are available that will help reduce this additional cost.”
Do they cost more to operate and maintain?
If most of your driving is in the city, a hybrid will save on gas costs, but you will have to determine whether these savings are worth the higher purchase price. When it comes to highway driving, hybrids can have about the same fuel efficiency ratings as gas-powered vehicles. Perhaps to combat a perception that hybrids cost more to maintain, many manufacturers provide longer and more comprehensive warranties. As for insurance costs, Chawla says there is no evidence that green vehicles cost more to insure.
Should I buy now or wait?
“It depends on how strongly you feel about reducing air pollution,” says Chawla. “If that is your goal, go ahead and buy a green vehicle now. If you are more concerned about price, green vehicles will definitely become less expensive in the future, due to increased competition among manufacturers and new technologies.”
How can a CA help if I want to buy a green car?
“A CA can advise you on whether you should buy or lease,” says Chawla. “Your CA can also help calculate the depreciation on your vehicle and can help you claim government incentives that are available to encourage the purchase of green vehicles.”
Inst. of Chartered Accountants——
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The Institute of Chartered Accountants of Ontario is the qualifying and regulatory body of Ontario’s 33,000 Chartered Accountants and 5,000 CA students. Since 1879, the Institute has protected the public interest through the CA profession’s high standards of qualification and the enforcement of its rules of professional conduct. The Institute works in partnership with the other provincial Institutes of Chartered Accountants and the Canadian Institute of Chartered Accountants to provide national standards and programs that are used as examples around the world. </em>
