As petrol prices exceed the $3 per litre mark and possibly reaching $4 a litre, more Members are now looking far more seriously at ways to reduce their vehicle running costs.
AA Principal Policy Adviser Terry Collins previously predicted petrol prices to exceed $3 per litre and he has taken that a step further now, saying it's possible fuel could reach $4 per litre. He stated that may not happen this year, but the shifting demand in Europe will place upward pressure on the market.
"I don't think people fully realise the long-term impact this conflict will have," Collins said.
In an unprecedented move the Government announced that from 11.59 pm Monday 14 March 2022 there would be a temporary reduction in the fuel excise tax by 25 cents per litre for three months. The 25-cent cut is on the fuel excise duty, it is not on the GST. It’s expected the tax cuts will save Kiwi motorists between $11 and $17 for a full tank.
The temporary reduction in fuel excise tax has been introduced as part of a cost-of-living package - aimed at giving New Zealand families immediate relief through the current global energy crisis triggered by the war in Ukraine.
With the Clean Car programme coming into effect last July, and from 1 April 2022 vehicles with zero or low emissions qualifying for a rebate and those with high emissions incurring a fee, many motorists are looking at alternative options.
The amount of rebate payable:
Motorists are now considering replacing their vehicle with an alternative that may suit their lifestyle at the same time reducing if not removing altogether petrol as a running cost, plus softening their carbon footprint.
Typically, these Members we are hearing from drive a conventional larger family vehicle along with a small runabout vehicle both powered by internal combustion (ICE) alone. They enjoy a leisurely family trip away a few times in the year and have an everyday commute of about 30km a day.
These Members are wanting to reduce their vehicle running costs. They are considering different scenarios such as, do I replace both vehicles for a Battery Electric Vehicle BEV? And could it suit both the family road trip and the urban commute? Or do I keep the road trip SUV and get an BEV for around town? There are many different options worth considering, so we thought it would be worthwhile looking into the options.
Here are some of the popular solutions to consider:
1. Buying a used electric vehicle to replace the small runabout
This is often a popular budget conscious choice; a good used Nissan Leaf will set you back about $15,000 - $20,000 and have a range of around 100-150km providing the battery is serviceable.
This is perfect for the school run, shopping and around town trips. It’s a relatively small outlay and if you buy one that has not been registered yet, you could be eligible for a maximum rebate of $3450 currently. From 1 April 2022, $3000 on a used electric vehicle such as the Nissan Leaf meets the Clean Car discount criteria.
2. Buying a new hybrid (HEV) vehicle
Hybrid vehicles have the flexibility of great fuel economy and still can venture further afield – perfect for that long family road trip. Hybrid models have become increasingly popular with models like the Toyota RAV4 Hybrid, with waiting times currently ranging from four to six months due to huge demand.
The latest RAV4 Hybrid SUV recently achieved a double victory, winning the 2021 AA DRIVEN NZ CAR OF THE YEAR: Best Medium SUV and the 2021 AA DRIVEN NZ CAR OF THE YEAR: Best Clean & Green Hybrid. The Toyota RAV4 Hybrid boasts excellent fuel economy, sipping just 4.8L/100km and produces just 109g/km of C02. From 1 April 2022 it will be eligible for a Clean Car rebate, which is an added sweetener. Price wise a new hybrid model is not significantly higher to the cost of a conventional ICE variant.
3. Buying a new Plug-in Hybrid (PHEV) vehicle
A PHEV is a good Swiss Army Knife solution. New PHEVs have a decent range for around town and the flexibility to shift into hybrid operation once the energy is depleted. There have been some quite compelling SUV options perfect for the family recently, and we envision more to come to the market.
Take the KIA Sorento PHEV EX AWD model, which is currently on offer for $74,990 + ORC. It boasts an all-electric range of up to 57km and has a fuel economy of just 1.6L/km and C02 output of only 35g/km. There is also ample space for seven, so that family road trip would be no problem.
Another option could be the slightly more affordable Mitsubishi Eclipse Cross, a smaller five-seater alternative at $50,990 + ORC. The Eclipse Cross also has a low fuel consumption at just 1.9L/km and a C02 output of just 43g/km. Both models are also currently eligible for the Clean Car rebate.
4. Buying a new Battery Electric Vehicle BEV
There has been a lot more choice in the BEV world in the past year, especially below the $80,000 mark. Although some say they are more expensive than ICE vehicles, thanks to the Clean Car rebates this margin is smaller than before.
The entry level Tesla Model 3 is a perfect example, with an impressive range of 491km, some of the latest and advanced features in the world and a price tag of $70,943 and after the Clean Car discount is applied, $62,318.
Other compelling options like the winner of the AA DRIVEN NZ CAR OF THE YEAR: Best Luxury car the Hyundai Ioniq 5, the winner of the 2021 AA DRIVEN NZ CAR OF THE YEAR: Best Clean & Green BEV category the Peugeot e208 and the exciting new Polestar. All have appeared in this price bracket broadening the range with more affordable fully electric options.
Replacing two petrol cars for one BEV is now a more realistic option for city dwellers, with the improved range offered by these newcomers to the electrified car’s class. A new BEV may now be the perfect option, particularly as the charging infrastructure improves throughout the country.
While there is no one-size-fits-all solution, there is now a lot more options available for New Zealand motorists. All classes for electrified models grew by up to 345 per cent in 2021.
Also, check out how AA Smartfuel can help you.