The conventional wisdom around hybrid cars has been that they will save a significant amount on gas costs during their lifetimes and are better for the environment, but that those benefits come at a cost — a higher initial price that makes a hybrid an overall more expensive option for transportation. But Yahoo Green has an analysis showing this is not the case when all of the various economic factors surrounding a car purchase are considered. In fact, it turns out that buying a hybrid is a better financial move than purchasing a comparable non-hybrid car because of the following reasons:
* Hybrids hold their value better than non-hybrid cars.
* Some lenders — typically credit unions — offer discounted loan rates for hybrids.
* Some insurance companies — including Geico, the Travelers, and Farmers — offer discounted premiums.
* The federal government is also offering tax credits of up to $3,400 for hybrids — but only for the first 60,000 vehicles, which means that Toyota and Honda models are no longer eligible. Some employers offer incentives for hybrid vehicles as well.
* And, of course, hybrids cost much less to fuel up.
In the end, the analysis shows a Honda Accord being 45% more costly and a Honda Civic 16% more costly than a Toyota Prius.
Of course the calculations are highly sensitive to assumptions, but to most reasonable observers, it appears that conventional wisdom has taken another hit.
Rethinking the cost of hybrid cars [Yahoo Green]
(Photo: geognerd)
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I like the part of the calculation that includes the government tax breaks. This assumes that the market actually demands hybrids from Ford, Chevy, et al. Which, frankly, I think is a weak assumption. Historically those manufactures small cars have not had the life span of Honda’s and Toyota’s, for which the article mentions, the tax incentives have elapsed… No benefit there.
As many have mentioned it is better financially to purchase a slightly used civic or corolla. In normal commuting the hybrid premium will take 10 years to recover, assuming there are no additional tax breaks. Beyond that the toxicity of battery manufacturing must be factored into the “green equation.” Hybrids are greener from the emissions side of the equation but not the construction side of the equation. I argue the common wisdom still holds.
Hybrids are not the solution to all problems. In Northern Virginia, single driver hybrid owners were given access to the HOV-3 lanes of I-395 and have been given 3 extensions beyond the original expiration date of the exemption.
All that has done is cause 3 times more congestion than a single car with 3 occupants (one car with 3 replaced by 3 hybrids with one each), waste more fuel and pollute more (the 3 hybrids combined use more fuel/pollute more than the single car and on a per person basis), and cause 3 times the road wear than a single car. To top it all off, the hybrid owners were given a tax credit to cause all these problems.
@chiieddy: My Prius’ battery is covered under warranty for 7 years or 160,000 miles. So, I take it to the shop and they give me a new one.
For all the naysayers, my actual efficiency is hovering right around 55mpg. Granted, I do almost zero highway driving. This is with the A/C on, too.
In the cold weather/snow/rain those numbers go way down, to around 40-45mpg, but I imagine every car’s fuel economy suffers in those conditions.
@chemman: Diesel cars and hybrids actually target different driving styles. Diesels get their best fuel economy in highway cruising. Hybrids have their greatest economy advantage in stop-and-go city driving. Which is better depends on the type of driving you do and the local costs of diesel and gasoline. (Where I live diesel costs about 20% more than gasoline, and the difference has been gradually increasing for years.) Diesel engines also tend to require more frequent maintenance than gas engines, in my experience, so that has to be figured in.
Many shouldn’t buy hybrids for ecological reasons. If you’ve got a decent car, it’s far better for the environment to keep it than to buy (and thus have manufactured) a new hybrid. Only buy a hybrid if you’re going to buy a new car anyway.
@Alan Thomas: I wonder how much oil my old junker has to be burning before it’s ecologically more sound to get a new car that doesn’t trail a blue cloud.
Another plus: In California, if you drive a hybrid, you can use the carpool lane even when driving alone. This means faster travel and, again, less gas burned.
@Orv: I drive a lot of highway miles so I can’t really comment on city driving with it, I’ve tracked it extensively because at one point I was toying around with additives and homemade biodiesel (I’m a chemist so making my own fuel option appealed to me as well) and wanted to see how it compared to store bought.
What diesel did you have that required more maintenance than a gas car? If you look in my owners manual, there are recommended maintenance schedules and the gas model has by far more maintenance required. They suggest oil changes every 5K for gas and 10K for diesel. Like I said, I’ve got 120K on it with nothing but oil changes every 10K. My last car had to have the starter replaced, the alternator, and a head gasket going bad on it when I sold it with 90K on it. The last time I took it in for an oil change, the mechanic told me I am just gettting that engine broken in and I could expect 300K+ miles out of it, so the longevity of a diesel engine also needs to be figured in too. I don’t think they are for everyone, I just think they are another option for people who are looking for better mpg.
Notably, they forget to take into account the lower standard equipment levels in the Prius. We got a loaded (sunroof, fog lights, alloys, nav system, etc.) top-of-the-line Civic EX that gets about 35-37 highway for $22k. The Prius at the price point doesn’t even come with cruise control or intermittent wipers.
@chemman: Blown head gaskets, clogged intake manifolds, and frequent timing belt change intervals used to be the hallmarks of VW diesels. The engine in my diesel Vanagon was worn out by 120,000 miles. I’m not sure about the newest ones; maybe they’ve improved.
Truck diesels have very long lifespans but you can’t necessarily extrapolate to car diesels, which are much more lightly built.
The battery disposal issue is one that always comes up…and it’s similar to the nuclear waste issue that I deal with all the time – It’s better to have concentrated waste that can be managed than dispersed and uncontrolled waste.
Plus, I’d rather avoid sending any more money than I have to to the Nigerias and Middle Easts of the world right now…
@HeartBurnKid: And for those that would criticize the allowance of single-passenger hybrids in car pool lanes:
The HOV lanes are not there to get people to work any faster. They are solely there to allow the DOT to meet EPA requirements, which is why hybrids are allowed.
Some of these comments make me laugh. It’s as if you people aren’t aware that one can buy used hybrids. I paid $12k for my Insight. It’s a 5 speed and gets me about 70 miles to the gallon. My gas bill is $30-$40 a month. So, financially, this was a fucking no-brainer, people. I’m saving a fortune here. If the rest of you want to buy regular cars for the same money, that’s fine, but don’t sit here and talk about hybrids as a bad financial move. Any NEW car is a bad financial move. Used cars are another matter altogether.
@Orv: Yes, diesels have improved significantly since 1982! Your Vanagon may have worn out by 120,000 miles due to the fact that the vehicle was designed poorly, that body was just too much weight for the size engine they put in it.
I wasn’t extrapolating truck diesel data onto my car (trucks can routinely run into the high 100′s of thousands of miles, if not millions), I’m basing it on my real world expeience with my car and what my diesel mechanic told me. They did suggest I change the timing belt within the next 10,000 miles or so, but I wouldn’t exactly call every 130,000 miles frequent timing belt changes.
I agree there are draw backs to diesel engines and they aren’t for everyone, I just think people have a bad taste for them because of the poorly made ones released back in the 70′s and 80′s. The technology is very different now, much cleaner, quieter and longer lasting.
@MissTic: CNW’s research methods on that report and their means of reporting are somewhat suspect. There’s a lot of back-and-forth on it, but they’ve done many iffy things in their calculations. For example, they claim that the useful life of the Prius will be 109,000 miles (Less than a Lotus Elise, a car you have to fold yourself into that’s not likely to see 5k miles a year from most owners.) At the same time, they predict lifetime repair costs for the Prius at $22,000 where they estimate the Chrylser Sebring at $7,155 over a 160k-mile service life. Hell, you’ll probably spend $7k keeping transmissions in a Sebring for 160k miles! The CNW dust-to-dust report is not something I’d consider highly reliable.
@Skiffer:
“The HOV lanes are not there to get people to work any faster. They are solely there to allow the DOT to meet EPA requirements, which is why hybrids are allowed.”
That is incorrect. HOV lanes are there to reduce congestion, not to be a reward for buying a certain type of vehicle. The vehicles complying with the HOV-3 restrictions are already producing less pollution, using less fuel, causing less congestion, and less road wear per occupant than a single driver hybrid. Virginia is technically in violation of federal rules for granting the exemption in the first place.
If they were truly concerned about reducing pollution, they would have given an incentive to hybrid owners to use the regular lanes where the benefits would be noticeable.
Furthermore, if the states were so concerned about pollution, then they would not be building Lexus lanes…
@rbb: Too bad that HOV lanes are shown to increase congestion, by reducing utilization of a critical lane during the highest traffic hours.
IF the HOV lane was utilized to its capacity it would help, but it isn’t, and it doesn’t.
The tax credit no longer applies for Toyota but Honda’s is at 50% until the end of the month and then 25% until the end of the year.
@rbb: Wow…just…wow.
3 times more congestion?
Every three hybrids on the HOV lane represents three people that used to carpool together in a single vehicle, huh?
The average US car-buyer buys to replace a car. Unless you’re suggesting that those villainous incentives are responsible for a significant number of car sales and car use that WOULD NOT OTHERWISE HAVE OCCURED, you’re blowing smoke.
You’d think I’d have noticed 3 times congestion.
Diesels FTW. The hybrid technology is more of a dog & pony trick than actual solution. About the only place hybrids make sense is in NYC or other heavy-congestion area where you don’t drive too many miles. Even there, diesel holds its own, far better than gasoline cars.
Currently eyeing a Mercedes Bluetec E-class diesel. Not ready to pull the trigger yet, but I do know that a diesel will be in my future. Still hoping Volvo actually makes a production model of their turbine diesel-electric prototype they had a few years back.
I also love reading people’s comments about how “expensive” diesel is. When you’re getting 2x the mileage out of 1 gallon with diesel, it’s substantially less. BUT, Americans haven’t ever been good about long-term thinking.
My own experience has been that my 2002 Toyota Prius has been cheaper to run and maintain than any other car I’ve ever owned. I bought an extended warranty when I first bought it, but 120,000 miles later, I only used it once and that was for a software upgrade. I have never had to replace the brakes, and I only let the local Toyota dealer work on it. So far, so good. The battery, which is a nickel-cadmium type, is designed to last the life of the car. How long is the “life”, you ask? I read that one Prius owner ran it up to 250,000 miles, at which point Toyota bought it back to run tests on it. With gas at $4.45 a gallon, I paid $35 to fill my tank. I’m hoping to trade it in for a 2009 Prius later, which is rumored to get 84 miles per gallon!
By the way, you don’t need a hybrid to get better mileage. Just make smarter choices on your cars. Some small er vehicles do just as well as a hybrid.
I’ve heard lots of assertions regarding the Prius Hybrid, for instance..
The BIG EXPENSIVE BATTERY Myth..
However, the battery of the Toyota Prius is warrantied by Toyota for 100,000 – 150,000 miles, depending on where you live.
You can find a replacement battery for a Prius currently selling for $800 on eBay.
The BIG EXPENSIVE REPAIR Myth..
Reviewed by Consumer Reports in April 2008 as one of the *least* expensive automobiles to own, in an ownership-cost comparison over five years for vehicles in seven common automotive categories, based on depreciation, fuel costs, interest, insurance, sales tax, and maintenance and repair.
See more myths here: [priuschat.com]
And, to learn more how *The Powers That Be* have brainwashed the public against Electric cars using Fear, Uncertainty and Doubt, you might be interested in the documentary “Who killed the Electric Car?” (currently renting on Netflix).
And yes, I bought a Prius. We did the math and realized that even with the payment, with 45+ miles per gallon, we are still coming out $30 ahead. And that was when gas was $4 a gallon. Every time it goes up, I’m coming out more and more ahead, by making the switch.. I have a feeling when gas hits $8 bucks a gallon, no one will be poo-pooing the Prius anymore.
Just got a base model 2007 Prius a few weeks ago. Blue book price was about $23,500, price at the local M-B dealership (only place we could find in Houston that had one at a decent price) was $24,990.
Got a call back from the dealer saying we could probably trade it back in for about $26,000.
And just FYI, I average about 45 MPG doing 70% highway driving.
@mac-phisto:
The Insight can keep going even if the batteries die.
Resale value is high right now based on a combination of trendiness and hight gas prices. I think the latter will have to change – at this price oil is hurting the US economy, but it is KILLING developing countries. Sooner or later this has to produce a correction that will cause a reduction in demand and eventually price. I’m not seeing we’ll see $20/gallon ever again, but the current run up in prices is very bubblicious.