Honda’s New Electric Car Comes with a Nifty Perk: Free Insurance

  • Share
  • Read Later
Honda Motor Company, Ltd.

The Honda Fit EV gets the equivalent of 118 mpg, a rating that leads all electric cars widely available to the public. Drivers who lease an electrified version of the award-winning Fit may be even more intrigued with another figure associated with the car: $0. That’s the cost of collision insurance for anyone leasing a Fit EV.

One of the most anticipated little cars to hit the marketplace, the Honda Fit EV is available to drivers for the first this summer. It’s available to a very small number of drivers, that is, on a very limited basis.

At first, only drivers in California and Oregon will be able to get behind the wheel of a new Fit EV, and they’re not allowed to actually own one outright. The car is only being offered via lease—a three-year, $389-per-month arrangement that stipulates “no purchase option at lease end.” Similar leases will be available in select East Coast markets beginning in 2013. A total of just 1,100 customers will get the chance to lease a Fit EV over the next two years.

(MORE: $3 Gas, Here We Come)

Consumers may find many of these numbers and rules annoying. But there’s another number that may make some of the others easier to deal with: $0. As the Los Angeles Times first pointed out, Honda is leasing the new Fit EV not only with free collision insurance included, but with a policy that has a $0 deductible as well.

This isn’t the first time an automaker has used free insurance as a marketing strategy for selling cars. During a promotion last summer, GM offered free insurance for a 12-month period to car buyers in Oregon and Washington.

Honda has special reason to throw in free collision insurance, as well as free maintenance and roadside assistance, into the Fit EV lease package. Per the LA Times:

Honda officials said they see the offer as a way to remove a barrier to the introduction of their first electric car in the U.S. They were concerned that insurers would have trouble rating the financial risk of covering the repairs of such a low-volume vehicle.

(MORE: It Costs a Lot of Money to Save on Gas with a 118 MPG Car)

The Fit EV is brand new to the marketplace, which excites some drivers and worries others—because every brand-spanking new car has no track record and is unproven on the road. The fact that collision insurance, maintenance, and roadside assistance are all included with the lease should assuage some of the worries, including concerns that it could break down, be prone to bugs, and/or be costly to repair.

It’s estimated that the inclusion of collision insurance will save a California driver as much as $600 per year. Liability insurance, on the other hand, is also required, and anyone leasing a Fit EV has to foot his or her own bill for that coverage.

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.