Hybrid cars: Let's give them more tax cuts

[Laith Zraikat]

Anyone who owns a hybrid car knows that hybrid cars will become mainstream and that its just a matter of time. What is slowing this down is the price tag on the vehicle which -for the most part- can be tipped by governments through tax incentives for corporates and individuals.

Hybrids are known to be more expensive than gas-powered cars of the same class, but our government has made a very unlikely decision - thanks to the efforts of H.E. Khaled Irani, Minister of Environment- to exempt hybrid cars from customs. This brought prices down and made a 2008 low mileage Prius a much sweeter deal than a 2006 gas only Honda Civic (one of the most popular selling cars in Amman). This move by the government has encouraged many people to at least contemplate going hybrid.

This was a great milestone, but we need to speed things up. We need to see hybrid being adopted by car shops so that affordable maintenance can be made available. Many people prefer having their cars maintained at the dealership, but as we all know, car parts and labor are much more expensive there. If people feel they have more options, they can make their hybrid purchase decisions without worrying too much. The best way to achieve that is by having more hybrids on the street -> more cars on the streets create more spare parts and more demand for maintenance -> more hybrid car shops spring up -> more competition -> maintenance costs go down -> more people will buy hybrids...(a nice green cycle)

We are now hearing rumors that customs will be imposed on hybrid cars starting 2010. This will surely slow down or kill the spread of hybrids especially in a price-sensitive market like Jordan. Not only do we need to make sure this doesnt happen, but we need to accelerate the green cycle with more incentives. Some ideas that other countries have adopted:

1- Tax credits and rebates for individuals and corporates
2- Free parking at city owned parking garages
3- Free access to congestion areas

A Toyota Prius consumes 50% less than the "fuel efficient" Honda Civic. Imagine if that saving can reflect on everyone!... The less we spend on gas, the more we can spend on enhancing our lives, and the better it is for the economy.

[Laith Zraikat]

How can the government encourage banks to give low interest rates to hybrid car buyers? Maybe they can even be motivated to do 50% financing at zero interest for the first year.