from flickr
Let’s say your hybrid car (whether it’s a Prius or something else) saves you roughly $250 annually in fuel costs due to improved gas mileage. That’s not an unreasonable guess if you drive something like 15,000 miles per year and gas costs roughly two bucks a gallon.
And let’s say your hybrid costs you roughly $3,000 more than a comparably equipped non-hybrid sedan from the same auto manufacturer.
Now simple division gives you a way to evaluate whether you’re actually saving any money. Divide the $3,000 difference in price by the $250 you save on gas each year to get the number of years before you actually start saving money. In this example, it’s twelve years.
Yep, you’d have to save $250 per year for over a decade to make up for the price difference when you buy a hybrid. Several people don’t keep their cars that long, so their “investment” in a hybrid never pays off.
So based just on price difference and the cost of gasoline, hybrids don’t usually save most buyers money. That’s not the entire story, though.
A 2006 study by Intellichoice computed the cost savings for hybrids based on total cost of ownership for the vehicles. That means they included depreciation, financing costs, fuel, repairs, maintenance and fees. They noted several facts about hybrids:
They cost more than non-hybrids
They hold their value better over five years
They’ve higher insurance costs
They save gas
When they added it all up, they showed that hybrids do indeed have a lower total cost of ownership than non-hybrids.
So will a hybrid save you money? Or to ask another way, is it worth the extra cost? That’s a definite maybe. If you’re looking at savings at the gas pump alone, probably not. But you can likely justify the purchase of a hybrid car if you consider the total cost of ownership over five years. The choice is up to you.
