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Despite eBay's booming battery bazaar, Toyota, Honda and Ford all say hybrid battery failures are extremely rare. Out of more than 100,000 Honda hybrids on the road, the automaker says fewer than 200 have had a battery fail after the warranty expired. Honda, like Toyota and Ford, covers the cost of battery replacement for the first 100,000 miles in most states and 150,000 miles in California and a few other states with tough green car laws.
Toyota says its out-of-warranty battery replacement rate is 0.003 percent on the second generation Prius that debuted in the 2004 model year. That equals about one out of 40,000 Priuses sold, says Toyota spokesman John Hanson.
For those unlucky few who have to replace their own batteries, the cost is coming down. On June 1 Honda is slashing the cost of its batteries from $3,400 (excluding installation) to as low as $1,968 on an Insight or as high as $2,440 on an Accord hybrid. Toyota also plans to substantially cut battery prices, which now stand at $3,000 (excluding installation), down from $5,500 on the original Prius.
"We had concerns about battery life," says ALG CEO John Blair. "But our analysts told us that battery life was really a nonissue. They found that the batteries have a 10-year life expectancy, which is quite reasonable."
Still, hybrids don't hold their value as well as their gasoline-powered siblings, batteries aside. For example, a three-year-old Honda Civic is worth about $12,000, retaining about 60 percent of its original sticker price of $20,000, according to Blair. But a hybrid Honda Civic holds only 58 percent of its original sticker price after three years, giving it a used price of $13,630, down from a new price of $23,500.