LOS ANGELES — Honda'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.
Honda officials said they see the offer as a way to remove a barrier to the introduction of their first electric car in the United States. 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, 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.
Although the amount of insurance savings for Honda's new Fit EV will vary based on a person's driving record and address, the option can reduce some of that expense. With Honda picking up the collision insurance on the vehicle, a single man living in a Southern California suburb could save as much as $600 a year, according to some insurance industry estimates.
Honda plans to offer just 1,100 leases for the car, an electric version of Honda's popular subcompact hatchback. It will not be available for outright purchase. It reaches showrooms in July.
The 36-month, 36,000-mile lease will cost $389 a month plus taxes, with no down payment. The contract includes roadside assistance and all maintenance, plus the collision insurance. But anyone leasing the Fit will be required to carry liability insurance at $100,000 per incident and $300,000 overall coverage. Honda said it won't make lease decisions based on people's driving records.
Honda doesn't offer a lease deal for the gasoline version of a Fit, but a similar lease for the slightly larger Civic is $220 a month, with Honda picking up the first of the 36 monthly payments. It does not cover maintenance, roadside assistance or collision insurance.
Based on current gasoline prices, the Civic will cost about $1,000 more to drive 12,000 miles than the Fit at a nighttime charging rate of 12 cents per kilowatt-hour.
Although automakers are selling few electric cars, the increasing number of models for sale by the major manufacturers has made the market more competitive, and buyers are starting to see incremental improvements with each new model introduction.
"Every next-generation electric car is going to be a little bit better than the previous one," said Thilo Koslowski, an automotive analyst at research firm Gartner Inc. "The technology is improving. Every mile counts. This is an area where the industry can gain a lot more expertise, but that puts early adopters at a disadvantage."