Not To Save Money
are many things, some of them positive. I tested an Infiniti M hybrid
recently that had so much right-now torque (an electric motor
strong point) that it launched like a dragster, almost getting air
under the front wheels. I tried out a Chevy Volt that could operate
at 60 MPH on battery power alone. The Toyota Prius is very popular,
in part because of its array of LCD displays and fascinating engineering,
including near-seamless transition between gas and electric power.
can be quick, they are certainly neat in terms of the technology
and also different. All perfectly fine reasons for
buying a car (any car).
But are hybrid
cars really money-savers?
Not that I
done the figuring. The results of which tell me that a hybrid cars
better-than-average gas mileage is economically irrelevant when
it takes years of driving to amortize the hybrids much higher
One could buy a nicely equipped 2012 Nissan Versa, a car about the
same size as a Prius, for around $15,000. That is about $10,000
less than the base price of a 2012 Prius. You can also buy a base
model Versa 1.6 for about $10,000 if youre willing
to live without power windows/locks and AC. This way, you start
out about $15,000 ahead of the Prius, in terms of initial cash outlay.
go with $10,000 as the difference since most people want at least
AC, a few power options and a decent stereo.
So, how long
will it take to reach break even given this $10k disparity?
assume a Prius averages 45 MPG and a car like the Versa averages
30 MPG a generous 15 MPG difference in favor of the Prius.
It sounds good on paper.
run some numbers
Assume 15 gallons
equals one tankful of gas. The Prius can go 675 miles on 15 gallons
of fuel at 45 MPG before it needs a refill. The Versa, 450
a difference of 225 miles in favor of the Prius. To go the same
675 miles, then, the Versa owner would need to buy another 7.5 gallons
of fuel (225 miles divided by 30 MPG) which at $3.20 per gallon
comes to about $24.
assume 10,000 miles a year of driving.
The Prius owner
will need to fill up about 15 times to go that far (675 miles per
tankful at 45 MPG times 15 fill-ups equals 10,125 miles). The Versa
owner, about 23 times (450 miles per tankful at 30 MPG times 23
equals 10,350 miles). Thats a difference of seven tankfuls
of fuel, or seven times fifteen which equals about 105 extra
gallons of fuel annually to travel the same (roughly) 10,000 miles.
that at current prices of about $3.20 per gallon, the Versa owner
will spend around $336 more per year on gas than the Prius owner
assuming they both drive about 10,000 miles annually.
started out with a $10,000 up-front price difference between the
Versa and the Prius. How many years of driving will it take to reach
break even at this rate?
About 25 years.
Even if you
triple the Prius annual fuel savings make it
an even $1,000 a year, say it will still take you nearly
ten years to work off the higher up-front costs of the Prius. Even
if you assume $2,000 in annual fuel savings, itll be
five years down the road before the Prius finally catches up to
a long time to wait to save money, isnt
get into the opportunity cost of the hybrid the $10,000 that
could have been used for other things, such as investments
or the cost of the money itself (interest) which is no small thing
when you finance a $24,000 car, even at just 2 or 3 percent. Nor
the fact that after a decade of use and 100,000 miles, the hybrid
will be getting on in years and like any older car, will be entering
the problem-prone years of its life. And being a hybrid, it will
of course have hybrid-specific (and expensive) problems that standard
cars dont have, such as tiring batteries.
None of this
is rocket science. A pocket calculator and five minutes will make
the math pretty clear to anyone. And the math does not favor
the hybrid. Not unless you compare the MPGs of a hybrid to a real
gas pig something that gets less than 20 MPG. And even then,
its going to take a while to reach break even. The better
comparison if the object is to save money is a standard
economy sedan like the Versa or (even better) a used economy sedan,
which can drop your up-front costs to less than $10,000.
wont be snazzy, quick or a technological tour de force. But
it will get you where you need to be in reasonable comfort, for
very little money and isnt that the whole point?
think hybrid buyers are dumb. The typical buyer demographic is middle-upper
income and college-educated.
They may tell
themselves they are being green but deep down,
I think they buy hybrids because they want to tell others
how green they are. It is a political act, not an economic
If so, you
have to explain why the best-selling hybrids like the Prius
are the most visible hybrids. Hybrids that looked
like standard cars like the hybrid version of the Honda Civic
dont sell as well, arguably because they dont
make a statement as well as models like the Prius.
nothing wrong with any of this, by the way. People buy luxury
cars and high-performance cars for similar reasons. Its perfectly
rational from this perspective, too.
buy a hybrid because you think its going to save you
wont or at the very least, youll be waiting a
long time before it does.
with permission from EricPetersAutos.com.
[send him mail] is an automotive
columnist and author of Automotive
Atrocities and Road Hogs (2011). Visit his
© 2012 Eric Peters
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