Hyundai Negotiates Insurance Deals for 2015 Hyundai Tucson Fuel Cell Vehicle | Edmunds

Hyundai Negotiates Insurance Deals for 2015 Hyundai Tucson Fuel Cell Vehicle


Just the Facts:
  • Consumers who lease the 2015 Hyundai Tucson Fuel Cell hydrogen-powered vehicle are required to obtain auto insurance from a Hyundai-approved insurance company.
  • State Farm has been approved by Hyundai; several other insurance carriers are in discussions with the automaker.
  • Hyundai told Edmunds it is trying to simplify the process so consumers don't waste time looking for insurance.

SCOTTSDALE, Arizona — Hyundai is in negotiations with several insurance companies in an effort to simplify the leasing process for the 2015 Hyundai Tucson Fuel Cell hydrogen-powered vehicle.

The Tucson Fuel Cell will be available at several Southern California Hyundai dealers beginning in late May or early June.

"We are the first manufacturer to offer a retail vehicle so we are the first manufacturer that is asking customers to get insurance," Michael O'Brien told Edmunds during an interview at a recent Hyundai press event here. O'Brien is vice president of product planning and corporate strategy at Hyundai Motor America.

Insurance companies are not obligated to offer coverage for each model that is sold in the U.S., O'Brien said. In order for the consumer to avoid calling a long list of insurance carriers to determine which companies will provide coverage, Hyundai has negotiated an insurance strategy with State Farm. It expects to have several other insurance companies approved by the time sales begin.

Unlike a typical electric-powered vehicle, which has batteries that must be recharged, electricity to power the motor of Hyundai's new vehicle is generated through a process that combines hydrogen and oxygen inside a fuel cell stack.

The vehicle is offered with a three-year lease for $499 per month plus a $2,999 down payment. Hyundai includes free hydrogen fuel and maintenance.

Hyundai spokesman Derek Joyce would not provide the manufacturer's suggested retail price for the fuel cell vehicle or approximately how much insurance will cost car owners on an annualized basis. The vehicle price will be released a short time before sales begin. The base, gasoline-powered 2014 Tucson GLS stickers for $22,325 including $875 for transportation.

"It is definitely worth more than a regular one and it is more sophisticated than a gasoline model," Joyce said. "The fuel-cell vehicle is valued higher than a Tucson vehicle so, yes, of course, the insurance will be higher from the standpoint that the vehicle is worth more."

The transaction at the dealership will be handled similar to any other lease deal with two exceptions: Buyers will be selected and prescreened by Hyundai before they enter the dealership, and auto insurance will be limited to the companies approved by the automaker.

Initially, sales will be limited to three Hyundai dealers in the Los Angeles area where six refueling stations are located. Next year sales will be expanded to the San Francisco area, followed by Sacramento and San Diego in 2016. Sales will not begin until the hydrogen-refueling network is completed in those geographic areas.

Hyundai's goal is to sell 50 to 100 vehicles this year, with higher expectations for 2015 and 2016.

Sales outside of California will not occur until a network of hydrogen refueling stations is developed.

Hyundai's Tucson crossover has been re-engineered as an electric vehicle. Instead of having a stack of batteries that must be plugged into an outlet to recharge, the hydrogen fuel cell creates electricity to run the motor. Hyundai says the fueling and recharging process takes less than 10 minutes.

By comparison, a typical battery-powered electric vehicle can take about three hours to recharge with a 240-volt recharging system and a minimum of 14 hours with a 100-volt charge.

Hyundai says the vehicle will accelerate to 62 mph in 12.5 seconds, have a top speed of 100 mph and a range of approximately 270 miles. The range for a battery-powered vehicle is considerably less.

Honda and Mercedes-Benz have a small test fleet of hydrogen fuel cell vehicles in the Los Angeles area, the Honda FCX Clarity and the Mercedes-Benz B-Class-based F Cell, respectively, that have been leased to a handful of consumers. Both automakers provide collision coverage, fuel and maintenance. However, those vehicles were developed for evaluation purposes and are not the final models that will be offered for sale to the public in the future.

Edmunds says: Many insurance companies are unlikely to provide coverage for this new technology, so Hyundai is saving car shoppers hours of wasted time looking for a carrier.

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