Are Hybrid Vehicles Worth the Price?

When Kiplinger's looked at the costs versus benefits of buying a hybrid two years ago, we concluded that most drivers would see long-term savings only with the smallest, most fuel-efficient models -- namely, the Toyota (TM) Prius and Honda (HMC) Civic Hybrid.

But at that time, gas cost only $2.30 a gallon. Now that gas prices have hit the stratosphere, more hybrids make financial sense. But with some hybrid models, you won't even come close to getting back the premium you pay.

To reach that conclusion, we compared the five-year ownership costs of 13 hybrids with those of their gas-engine counterparts. Our math is based on actual transactions, rather than sticker prices, and assumes a 15% down payment, a five-year loan and 15,000 miles of driving a year -- 55% of those at city speeds. Vincentric supplied the data.

Besides sucking less gas, many hybrids save on taxes and fees because they qualify for a one-time tax credit, which we took into account. A factor that we couldn't include is a potential discount on your car insurance. Travelers, for example, offers a 10% discount for hybrids in most states.

Best and worst. At the top of the list for value is the 2008 Saturn Vue Hybrid, which is projected to cost $2,500 less over five years than the gas-engine Vue XE. The numbers also favor the Nissan (NSANY) Altima Hybrid ($2,100 less than the Altima S), the Lexus RX 400h ($1,100 less than the RX 350) and the Honda Civic Hybrid ($1,000 less than the Civic EX). The Altima Hybrid is sold in only eight states -- California, Connecticut, Maine, Massachusetts, New Jersey, New York, Rhode Island and Vermont.

It's tough to justify buying a car at the bottom of the list. The Lexus LS 600h L costs $35,000 more in total costs than the LS 460 L, mainly because of its $32,000-higher sticker price. The Lexus GS 450h costs $16,900 more than the GS 350, and the Chevrolet Tahoe Hybrid costs $10,700 more than the Tahoe LT.

The middle group of hybrids has ownership costs that run from slightly to significantly higher. The Ford (F) Escape Hybrid costs $200 more over five years than the Escape XLT four-cylinder; the Chevrolet Malibu Hybrid costs $400 more than the Malibu LT; and the Saturn Aura Hybrid costs $1,700 more than the Aura XE.

The Toyota Highlander Hybrid (which has four-wheel drive) will cost $2,200 more to drive than the Highlander base four-wheel-drive model; the Toyota Camry Hybrid will set you back $2,700 compared with the Camry LE.

You could still come out ahead with these in-between hybrids if gasoline prices rise. For example, with the Ford Escape Hybrid, you'd erase the price premium if gas were to average $4.50 a gallon.

What about the Toyota Prius? For many Americans, the white-hot hybrid symbolizes green driving. Many dealers have months-long waiting lists and are charging $1,000 to $1,500 more than the $23,135 sticker.

Compared with what? Even so, if you look at the total ownership cost over five years, the Toyota Prius ties the Honda Civic Hybrid for least expensive ($39,780). The Nissan Altima Hybrid ($40,730) is next cheapest, followed by the Chevy Malibu ($44,810), Toyota Camry ($45,140), Ford Escape ($45,860) and Saturn Vue ($46,120) hybrids.

But hybrids aren't the cheapest rides. A number of nonhybrid gas sippers cost less to own over five years. One of the best values is the Honda Fit, which costs $35,650 to operate over five years. The Nissan Versa costs $36,520. If you want more room, consider the Toyota Matrix, which is projected to cost $39,680 over five years.

Comments

[lark:]

The only way to make it cheaper is that people buy massively so the cost to make those cars would be less expensive.

2008 Sep 10 08:46 AM

[User 259161:]

You need to read the article published on FEE.org about Hy-brids using future dollars to get the true cost

2008 Sep 10 09:46 AM

[David @ the...:]

Consumer Reports has a new analysis as well (link below). According to CR the Toyota Camry was on top for cost savings. The Saturn Vue scored well also.

Click Here for Link to full article:

www.hybrid-car-show.co...

2008 Sep 10 12:48 PM

[MJ Pragmatist:]

It would be interesting to have also noted whether there were any performance differences between the hybrids and their counterparts.

2008 Sep 10 12:54 PM

[sapereaude:]

What's the miles per year basis on which these calculations are based?

2008 Sep 10 12:57 PM

[DaddyPro:]

> What's the miles per year basis on which these calculations are based?

The article says it's 15,000 miles per year.

2008 Sep 10 03:59 PM

[MellowGuy:]

Depreciation is the main expense and since depreciation is minimal with hybrids, it makes sense to get one now if you can find one.

2008 Sep 10 05:28 PM

[MellowGuy:]

Since depreciation is the main expense and hybrids have minimal depreciation, it makes sense to get one now if one can be found that isn't way above MSRP.

2008 Sep 10 05:31 PM

[Paul Killinger:]

CNG fueled vehicles are alot cheaper to own and operate than hybrids. That's why there are millions of them on the road throughout the world.
Everywhere but here, that is.

2008 Sep 11 09:52 AM

[User 260010:]

Not that the average consumer will consider this.. but there is also the cost of pollution to consider which we do not see in the sticker price or at the gas pump. We do however see it, and will see more of it in the future, when paying taxes as the effects of pollution present governments with ever increasing bills. So when comparing hybrids, please also compare their pollution controls.

> It would be interesting to have also noted whether there were any
> performance differences between the hybrids and their counterparts.

I believe the Lexus 450h has 50 hp more than its non-hybrid counterpart..

2008 Sep 11 10:35 AM

[notsosmart:]

replacing the battery pack must be considered.this could be expensive or give you a problem selling it used.

2008 Sep 11 11:15 AM

[User 169775:]

Replacing the battery pack is not an issue. All current new hybrids sold in the U.S. have an 8-year / 100,000-mile warranty on the battery, and the warranty is extended to 10 years / 150,000-miles in the 8 states with California-standard emissions laws.

If it fails within the warranty period, the cost of replacement is FREE.

That is assuming you didn't do anything stupid to void the warranty, like crash the car, tamper with the hybrid system, etc.

Failure of the battery pack in the 2nd-generation Prius within warranty terms is virtually unheard-of.

2008 Oct 01 02:44 PM

[User 169775:]

Hybrids compare favorably in terms of performance to their conventional counterparts.

For instance, the Ford Escape Hybrid has a combined output of 196hp from its I-4 engine and electrical motor. The regular I-4 Escape has 171hp.

2008 Oct 01 02:48 PM

[lesceil:]

How can they have minimal depreciation? I would expect the opposite:
1. They are cutting edge on a fast moving technology front, so year to year the technical advances will be more drastic than on the traditional gascars
2. Battery lifetime has not been proven by a long history, but for all I have experienced with rechargeable batteries before, they get stale quicker than advertised.
3. As more people start to buy them, manufacturing costs will go down leveraging economics of scale.

All this means increased depreciation.

LeSciel

On Sep 10 05:31 PM MellowGuy wrote:

> Since depreciation is the main expense and hybrids have minimal depreciation,
> it makes sense to get one now if one can be found that isn't way
> above MSRP.
>

2008 Nov 22 06:00 PM

[User 169775:]

On 2008 Nov 22 06:00 PM lesceil wrote:


> 2. Battery lifetime has not been proven by a long history, but for
> all I have experienced with rechargeable batteries before, they get
> stale quicker than advertised.

You don't understand how the battery in a hybrid car works.

They last VERY long because they are NOT deep-discharged like your rechargeable batteries.

Rechargeable batteries wear out because of all the full-charge-then-full-... cycles. Hybrid car batteries DO NOT do that.

The Prius hybrid computer is always trying to keep the charge state of its hybrid battery between 60%-80%, where it has a life span measured in decades. Even when you see the charge state in the Prius MFD display a low charge state of just 2 red bars, the battery is still 60% charged.

Purely Battery-powered electric cars like the Tesla do go through full-charge-then-disch... cycles, which is why their battery life is problematic-- Tesla recommends replacing the battery pack in the Roadster after 5 years. Non-plug-in hybrids do not suffer from this problem because they don't deep-discharge their batteries.

Aug 15 12:23 AM