# How To Calculate Gas Savings With A Hybrid

One of the main reasons people consider buying a hybrid car or electric vehicle is to save money on gas.

But is spending the money on this type of vehicle a smart way to save money on gas?

Or are you wasting money, thinking you are making a smart financial decision?

The only way to know is to run the numbers.

Before you get scared off, know this is an easy thing to do.

And this post walks you through how to calculate gas savings with a hybrid.

By the end, you will know if buying a hybrid is a smart move for you, or if you would be better off just buying a more fuel efficient vehicle than you currently have.

## How To Calculate Gas Savings With A Hybrid

### Understanding Different Types Of Hybrid Vehicles

Before I get into the details of creating your own fuel savings calculator, the first thing I want to talk about the different types of vehicles I mention in this post.

I want to make sure we are on the same page with what these are.

While the majority if this post focuses on hybrids, at the end I walk you through the calculation of your electric vehicles charging costs.

• Hybrid Car: A hybrid car uses both a gasoline engine and an electric motor to power the car. The electric motor is charged through the regenerative braking system and kinetic energy. These cars offer better gas mileage compared to traditional cars.
• Plug-In Hybrids: A plug-in hybrid vehicle also uses both a gasoline engine and an electric motor to power the car. These cars have a larger battery, which allows for longer travel distance on a single charge. The battery is charged through regenerative braking and by plugging in the car to a power outlet. Still, most only allow for short distances on battery power alone.
• Electric Cars: This vehicle only uses an electric motor for power. These offer better fuel efficiency than hybrids and can travel greater distances thanks to larger battery packs. The battery pack is charged by plugging the car into a power outlet.
• Traditional Car: A conventional car uses an internal combustion engine and gasoline for power. They are typically less fuel efficient than hybrid vehicles and electric cars.

Now that we understand the terminology we will be using, let’s see how you can figure out your how much money you can save with a hybrid.

### #1. Determine The Fuel Economy Between Cars

In order to know how much money a hybrid vehicle can save you on gas, you have to compare the annual fuel cost of cars you are considering buying.

And you need to compare that to your current cars fuel cost.

A key number here is fuel economy, or miles per gallon for each car.

Let’s use an example to make this simple.

We will say you currently own a 2017 Nissan Altima and you are considering a 2020 Toyota RAV4 Hybrid and a 2020 Honda CRV.

Using fueleconomy.gov, search for your vehicle to get the EPA combined mileage.

In our example, the Altima gets 30 mpg, the RAV4 gets 40 mpg, and the CRV gets 30 mpg.

Now that you have this information, you are ready to move to the next step.

### #2. Determine How Many Miles You Drive

This next step is important.

You need to figure out the number of miles you drive.

You can estimate based on the average miles driven annually by most drivers, which is between 12,000 and 15,000.

Another option is to look at your vehicle service records.

When you get your car inspected or taken in for scheduled maintenance, they record your current mileage.

Just find two service records close to a year apart and you have your annual mileage driven.

If you don’t have a physical copy, call your mechanic and ask if they can tell you the numbers.

The only issue with this option is if you drove a lot more or a lot less than you typically do.

Let’s just assume you drive 15,000 annually.

### #3. Estimate The Cost Of Gasoline

Now it is time to get the cost of gas.

The biggest problem here is fuel prices are not set and can vary widely over time.

To combat this, it is a good idea to pick a couple different gas prices so you have a range.

For example, we will use \$2.50, \$3.00, and \$3.50 per gallon of gasoline.

Understand that the higher the gas price, the higher the savings with a hybrid you typically experience.

### #4. Take Into Account Electricity Prices

If you are considering a plug in hybrid vehicle, you have to do a little more math, since your car will run on both gasoline and battery power.

To make the math simple, you can assume you will travel 50% of your miles using gasoline and the other 50% using battery power.

However, if you tend to do more highway driving versus city driving, you may want to increase the gas miles used.

If you do more city driving, then increase the battery power miles.

After this, the math is simple.

Assuming 15,000 miles a year split evenly, this comes to 7,500 for each type of fuel.

Now we can move on to the next step.

### #5. See Your Fuel Savings

With all these numbers, we can put it all together to see your annual fuel costs and your potential fuel savings.

I like to use a spreadsheet for my gas mileage savings calculator to make it faster, but it isn’t required.

Here is how my sheet looks.

Note that I have to figure out fuel costs for three different scenarios because of the different prices of gas.

To figure out your costs, simply take the annual miles you drive and multiply by the cost of a gallon of gas.

Next, take this number and divide it by the fuel economy or miles per gallon to get your yearly cost of fuel.

The final column, fuel savings, is calculated by subtracting your current yearly cost from the car you are considering buying.

Using the two vehicles here, you can see that buying the RAV4 Hybrid will save you \$375 a year in fuel compared to your current vehicle, assuming gas is \$3 per gallon.

At \$2.50 a gallon, the savings are \$313 and at \$3.50 per gallon, the savings are \$438 annually.

The Honda CRV will not lower your fuel cost as it gets the same fuel economy of your current vehicle.

If your car is a plug in hybrid, scroll down to see how your numbers will look.

To get more details on calculating the electric cost, see the section below about electric vehicles.

### #5. Factor In Maintenance Costs

While saving \$375 a year in gas is great, it isn’t the total cost of ownership.

There are a number of factors that come into play.

For example, you have to factor in maintenance costs.

To keep things simple, we will assume the costs between the vehicles are the same.

### #6. Add In Purchase Price

The other variable you have to take into account is the purchase price of the new car.

This is what most people ignore and why many times, hybrids aren’t worth it.

For example, the average price of a 2020 Toyota RAV4 Hybrid is \$37,500.

If you were simply comparing this car to your current car, it probably wouldn’t make sense to buy it, assuming your Altima is in good working order.

While it would reduce your gas cost by \$375 a year, you are paying \$37,500 just to save this money.

If however you need to buy a new car, then you need to compare the purchase price between the two.

And the lower the purchase price you can get, the more money you will save overall.

### #7. Determine Your Overall Savings

Now that you have all the numbers, you can see your overall savings.

We will assume you are looking between the RAV4 Hybrid and the CRV.

The RAV4 will save you \$375 a year in fuel costs.

But it costs \$1,500 more than the CRV.

If you just looked at cost of gas, you would pick the RAV4.

But you need to factor in the higher purchase price.

To truly see your savings, you need to divide the higher purchase price by the annual gas savings.

When you do this, it will take you 4 years to break even.

Put another way, even though you save money on gas, if you get rid of the RAV4 before year 4, you will have spent the same amount of money in total as you would have with the CRV, even though it is a less fuel efficient vehicle.

In order to truly save money, you need to keep the RAV4 for 5 years or longer.

### #8. Rinse And Repeat

If your analysis determines that you will save a good amount of cash, then your work is done.

But if you find you don’t save enough or it is more expensive, it is time to re-run the analysis.

I suggest you pick a different hybrid and maybe even a newer non-hybrid fuel efficient car.

The reason for this is because many newer cars have a better mpg rating than older cars.

### Fuel Savings For Electric Vehicles

Finally, I want to show you the numbers for electric vehicle gas savings.

If the new car you are considering is an electric car, you have to factor in the extra cost of electricity.

This is because you need to use your electricity to charge your car.

If you didn’t do this, then your calculation would be off and you wouldn’t know how much money you would be saving.

To calculate and electric vehicles charge cost, I’ll only give an estimated cost.

The reason is because the following all effect the time and energy required to recharge the battery:

• Battery size
• How depleted the battery is
• Charging rate of the vehicle
• Charging rate of the chargepoint
• Weather

The math to complete the calculation is a little different.

You need to know your vehicles electric miles per gallon or MPGe and the electricity cost you pay.

You can use this guide to find the average cost of electricity in your state.

However, you could also look at your recent electric bill as well to get the true amount you are paying.

Now, you simply take the cost of electric and multiply it by 33.7 kWh, which is the per gallon equivalent of a gallon of gasoline.

You then take this number and divide it by your cars MPGe.

Finally, you take this number and multiply it by the annual miles you drive.

For example, the Tesla Model 3 Long Range gets 84 MPGe.

If we take electric at \$0.14 kWh multiplied by 33.7 kWh we get \$4.18.

Then we take \$4.18 and divide it by the 84 MPGe to get \$0.06 cost per mile.

Take \$0.06 and multiply it by 15,000 miles to get an annual cost of \$900 to power your car.

Note that I rounded the numbers here to make it easier to follow along.

Finally, you also need to take into account if you had to install a home charging station.

The typical cost for this is \$1,500.

Since this is a one time charge, we can amortize it over the life of the car.

So if you plan in keeping your car 5 years, you divide \$1,500 by 5 to get an annual cost of \$300.

You would add this on to your \$900 annual electric cost to get a total cost of \$1,200.

For a plug in hybrid, we will follow the example earlier of splitting your annual miles driven evenly and will use a Kia Niro Plug In Hybrid as the example.

With gas at \$3 per gallon, an estimated fuel economy of 46 mpg, and 7,500 miles, the cost is \$489 a year.

With an electricity rate of \$0.14 per kWh, 2,385 kWh over 7,500 miles, the cost is \$334 a year.

Add the two numbers together and you get \$823 in annual fuel costs.

If you have to install a charging station, be sure to add this cost too.

Using the example above, we add \$300 to get to \$1,123 to power this car.

Here is how this looks.

Note this number will be lower if you charge at a gas station or other charging station not at home since you don’t pay for the electric.

It can also change over time as electricity prices fluctuate.

The higher electricity rates are, the less savings you will experience.

### Final Thoughts

There are the simple steps to calculating gas savings with a hybrid.

While it is important to try to save money on fuel, don’t make the mistake of only looking at these savings.

When you do this, you risk spending more money in the long run.

You have to take into account a lot of other variables to decide if the purchase is worth it.

In fact, simply driving smarter with your current vehicle could prove to be a smarter financial solution for you.

You might even be able to use some unheard of hacks to get free gas too.

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