Drivers willing to pay more for “green cars”

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.”

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.