With gas prices flirting with $4 per gallon, the media will do its best to make you think gas prices are going nowhere but up. With that thought in the back of your mind, you think about your current car and how many miles per gallon she gets. You start to think that it would be great to get a hybrid car and cut your visits to the local gas station in half. But are hybrid cars worth it? I decided to look into this by comparing a handful of cars. I wanted to see how long it would take someone to “break-even” on the purchasing of a new hybrid car. To clarify, the break-even point is reached when the savings from less fuel consumption equals the higher purchase price of the car.
Are Hybrid Cars Worth It?
To start, I’m going online to get the average price paid for the small cars in my region. Depending on where you live can change these calculations. Below is a complete list of the cars, their purchase price, and average mpg (I took this info from the cars manufacturers).
From there, I assumed the cars would be driven 12,000 miles per year and that gas averaged $4 per gallon. Here are the results:
The results surprised even me. I took comparable cars and in all cases, you would have to wait at least 13 years to break even! The reason for such a long break-even period is because of the higher purchase price of the hybrid car. The Toyota Prius costs close to $10,000 more across the board. While it does average close to 20 miles more per gallon, that equates to roughly $600 in savings each year.
The answer to the question are hybrid cars worth it is a resounding “no”. So while you think you are saving money by purchasing a hybrid, in many cases, you are not because you won’t break even for many years. But we don’t stop here.
Are Hybrid Cars Worth It: Electric vs. Gas
The results are even worse for the Chevy Volt, again because of the much higher purchase price. In terms of this analysis, you will never break even since most consumers only keep a car for eight to ten years.
The answer to the question are hybrid cars worth it is a resounding “no” for electric cars as well. Carrying on….
Are Hybrid Cars Worth It: Mid-Size Cars
When we look at mid-size cars, the picture begins to change a bit. The hybrid versions of two very popular cars, the Ford Fusion and Toyota Camry cost roughly $4,000 more than the non-hybrid version. This has a dramatic effect on the break-even point.
As you can see, the Ford Fusion Hybrid has a break-even time of roughly six years, whereas the Toyota Camry Hybrid has a break-even period of close to seven years. As with the smaller cars, the annual gas savings for the hybrid versions equals roughly $600 per year.
The answer to the question are hybrid cars worth it is “yes” for mid-size cars.
Are Hybrid Cars Worth It: SUV’s
Lastly was look at a few SUV’s. The numbers here are familiar in the sense that they mimic that of the compact cars. Because of the much higher price of the Toyota Highlander Hybrid, it would take you over 30 years to break-even on gas savings. With the Lexus models, you are looking at almost 14 years.
The answer to the question are hybrid cars worth it is again a resounding “no” for SUV’s.
Are Hybrid Cars Worth It: Other Factors
When looking at the total overall cost of a new car, we can’t just focus on purchase price and estimated fuel consumption. We have to look at other factors as well, including:
This is should not vary wildly from model to model since none of these cars are considered sports cars. Through researching various websites, I estimate you would see at most a $200 annual difference in the cost of insurance. Note that the Prius tends to cost more to insure from the research that I have conducted.
Obviously luxury cars, such as the Lexus are going to cost more when it comes to maintenance. Overall however, hybrid cars tend to cost less to maintain. One nice feature is that many of them use the breaking system to generate power for the hybrid motor. This means less braking on your part and therefore, longer lasting brakes. All told, you can expect to see an annual cost difference on maintenance of roughly $200.
Hybrid cars tend to get better mileage in the city as opposed to the highway, which is the exact opposite of gasoline engines. The reason for better city mileage is because the hybrid motor primarily works at lower speeds and the gas motor at higher speeds. If you primarily drive highway miles, you might want to estimate a smaller annual gas savings, which means longer break-even period.
My analysis shows break-even times based on 12,000 miles driven annually. If you drive more than this, the break-even time will be less. If you drive fewer than 12,000 miles annually, then your break-even time will be more. Associated with this is the maintenance point above. The more you drive, the more wear and tear, meaning the greater the need for maintenance.
Battery and Oil Change
When I was shopping for a new car, I was looking at a hybrid car. The dealer kept touting to me that I would save money because it needed an oil change every 10,000 miles. Well, I ended up with a non-hybrid car and the manufacturer recommends 10,000 mile oil changes as well. Make sure you do your research. Modern cars with new oil technology means the days of 3-5,000 oil changes are gone.
I’ve heard rumors that to replace a hybrid battery, you are going to spend close to $10,000. This might have been true back when hybrids first entered the scene, but not so anymore. Most manufacturers will warranty the hybrid battery for eight to ten years, while others warranty it for life. In the rare event you need to buy a new hybrid battery, you are looking at $3,000.
My new car has free maintenance for three years. So naturally I am going to take it to the dealer for my free service. But once that expires, I am going to my local mechanic because I trust him and he is much cheaper. If you are in the same boat as me, make sure before you decide on a hybrid that your mechanic can work on them. Again, when hybrids were first coming onto the market, very few mechanics could service them. Now that they are more common, more mechanics have worked on them. But, it is better to be safe than sorry.
While this is a stretch, three states have proposed legislation to tax hybrid and electric vehicle owners an annual fee. The states claim that owners are avoiding the gas tax that everyone pays when they fill up their cars. These taxes help pay for maintaining the roads. From the research I’ve read, the annual fee (or tax) would be roughly $125 per vehicle.
Are Hybrid Cars Worth It: Conclusion
For the record, I am not anti-hybrid. I just want to help people make the best decision possible. You can’t make that decision just by looking at the MPG between two cars. You need to break that down into actual dollars to see if you will actually see a savings by purchasing the hybrid car. For the compact car segment, are hybrids cars worth it? It really doesn’t make a lot of sense to spend more money on the hybrid version if your goal is to save money. With break-even periods of more than 10 years, it is unlikely you would see the cost savings. Same scenario applies to the SUV’s as well.
However, are hybrid cars worth it for mid-size cars? This is a different story. With a break-even period of roughly six years, as long as you keep the car for ten years, you will begin to see a cost savings. Realize though that the cost savings is roughly $600 per year. If you keep the Fusion Hybrid eight years, you are looking at a cost savings of $1,200.
Are hybrids cars worth it? In my personal experience, the hybrid car was not worth it. A comparable gas only car that I purchased gets me close to 30 mpg combined. With stricter government standards coming for more fuel efficient vehicles along with consumer demand, the miles per gallon from gas only cars is only going to increase. Until the technology becomes more cost effective and a hybrid costs as much as a gas only engine, I will be sticking with a lower priced car that gets good mileage.
Readers, have you purchased a hybrid car? How did you come to the conclusion that it would be a cost effective move? Have I misses anything my analysis of are hybrid cars worth it?