$4 Gas Is Best, And Worst, Time to Buy a New Hybrid

May 6, 2011

Even with this week’s slight dip in oil prices, next week is likely to bring the dreaded return of $4 gas as the official national average at the pumps. (Last week, it hit $3.96.) The knee-jerk reaction from many Americans will be to dump the family gas-guzzler as swiftly as possible, and rush out to purchase a smaller fuel-efficient car or hybrid.

But, according to Jeff Bartlett, deputy online automotive editor at Consumer Reports, this might be exactly the worst time to buy a hybrid or other new high-mpg model. That’s because every other person saddled with a large SUV is adopting the same dump-and-run approach. Therefore, the value of those gas hogs is dropping like a stone at the exact time that incentives are disappearing for hybrids and small cars in high demand.

“The best advice for a fair portion of people is to think through the long-term picture and hold to a gas-guzzler for next few months,” said Bartlett, in an exclusive interview with HybridCars.com.

Bartlett is not saying that hybrids aren’t worth the upfront investment. Just the opposite. If you buy one of the truly efficient hybrids—like a Toyota Prius, Ford Escape Hybrid or Honda Insight, then “buying a hybrid can quickly pay itself off.” But those economic benefits are undermined when buying your hybrid at the exact moment when hybrids are in greatest demand, and when trading in your less-efficient vehicle is the least desirable.”

According to Bartlett, the value of a $35,000 Ford Explorer has depreciated by $20,000 in the last five years—an amount lost that comes close to the purchase of a base-level Toyota Prius.

Timing Is Everything

In essence, Bartlett is asking car buyers to reexamine two American propensities: the tendency to buy a car that exceeds your required needs, and a fickleness that leads to flitting from one vehicle to another based on short-term changes rather than long-term trends.

Bartlett’s advice was shaped by Consumer Reports’ April survey of more than 1,000 adult car owners in the United States. A whopping 92 percent of respondents said they wanted a jump in fuel economy in their next vehicle. The reported average fuel economy of cars owned by survey respondents was 23 mpg—and they said they wanted an improvement to 29 mpg.

Most respondents were motivated to save money, and therefore, downsizing is “the realistic answer for most people,” according to Bartlett. But “buying a new car right now won’t save money.”

Then what? Admitting the mistake of previously overbuying is the first step. Then, pause to ask what you think the next five to 10 years will bring—not only for the economy and gas prices, but your personal financial and transportation needs. Start the process now of comparing hybrids and other models for total cost of ownership over the full period of ownership, as long as eight years. “We encourage people to make a careful decision they can live with,” Bartlett said.

And be prepared to stick with that decision for several years, no matter where gas prices go.


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  • DownUnder

    Yeah, there’re so many many short sighted car buyers out there.

  • Yegor

    “The reported average fuel economy of cars owned by survey respondents was 23 mpg—and they said they wanted an improvement to 29 mpg.”

    29 mpg!??? It is only 26% better.
    Honda Civic 2011 has 29 mpg average.
    It means $2,049 for gas per year on average – $20,490 in 10 years!

    For Toyota Prius at 50 mpg the gas will cost $1,188 per year – $11,880 in 10 years – almost $9,000 less on gas.
    The basic Honda Civic Auto is $16,605 – only $6,400 less than Toyota Prius. Clearly Toyota Prius is better deal. When people are going to learn? :(

    And who knows how high the gas going to cost when recession is over? $5? $6? $7? $8? When people are going to learn? :(

  • indigo

    The car companies could have 100 MPG cars but they’re too enthralled by Big Oil. You’ll note how •little• engineering it took to boost 30 MPG cars to 40 MPG.

  • David

    The loan on my Camry will be done with later this year. That will save me $250/mo. I can’t justify starting up a $400/mo payment for a new hybrid when I spend $200/mo on gas at 26-30mpg no matter HOW much I’d like something new an efficient..

  • GPMP

    People rarely take into account the likely residual value of the car/truck they’re buying. I do. That’s why I expect to be rewarded by the used car market when it’s time to sell my high mpg car so that I can buy my first electric car (and my next high residual value used car).

    Really, when these people were buying their Excursions and Tahoes, didn’t they realize they would take a bath in 5 years when it came time to sell?

  • JJJJ

    I did find it interesting that the car makers had an all out war against higher CAFE standards, saying they were impossible to meet….and after the requirements passed, it took, what, 2 years for the cars to start reaching 40mpgs?

  • JohnM2

    3 problems with CAFE
    1. The truck loophole is why SUV’s became ubiquitous. It took 10 or 15 years for delivery trucks to be refined and marketed as cars. CAFE is one of the reasons for this.
    2. For every high-mileage unit you buy, it allows that much more guzzlers to be made. You may be saving gas, but it doesn’t change the total gas used. Fleet usage uses an equation that makes assumptions on number of miles driven, which may be biased and result in more aggregate fuel usage.
    3. It’s a supply side mandate. Demand has more to do with fuel price than congress.

  • Mr.Bear

    At $3.65 / gallon (current price where I live) I have yet to spend more than $28 to top off my Prius’ tank. And that $28 will get me 400 miles further down the road.

    Of course, this article comes out about the same time the price of oil dropped 8% because of reduced demand. A drop in gas prices probably won’t be far behind.

  • Capt. Concernicus

    When my last car was totaled (hit almost head at 35mph on by an unisured heroin addict) I bought my 2nd gen Prius. I’m very glad I did. It’s averaging 49.2mpg and this last half tank of gas got me 56.9mpg. I’ve never spent more than $25 to fill up the tank, but that’s because I don’t let it get down much farther than half a tank or so.

    I’m getting the hood repainted due to rock chips and while I was waiting for the estimate and paperwork I walked into the Honda/Acura dealership (buildings are attached). In talking to a salesperson he said that I probably had one of the better vehicles in the parking lot just because of the high gas prices and the excellent gas mileage the Prius gets. He jokingly asked me if I wanted to trade it in. I laughed and told him that he couldn’t offer me enough to make me want to trade it in even though there are a couple of Acura’s I would love to have. Surprisingly though he had a lot more questions for me about the Prius than I had about their cars.

    I am glad to see that the resale value on a used Prius is up almost $3,000. Once it’s all repainted and looks brand new again I might just go around to some dealerships and see what kind of curiousity I can stir up and see what kind of offers I get just for fun. lol!

  • Jeff

    When will folks stop blaming the auto makers for not shifiting their focus to high mileage? If we quit buying the gas guzzlers they would stop making them. Look at Dodge. They have no high mileage cars and yet they stay in business because their muscle sells.

    And what is the BS about being able to build 100 mpg cars. Even all electrics only get about 100 mpg when total energy consumption is calculated. Get real and quit driving all together, that would really save you a lot of money.

  • Anonymous

    “29 mpg!??? It is only 26% better.
    Honda Civic 2011 has 29 mpg average.
    It means $2,049 for gas per year on average – $20,490 in 10 years! “

    For the record, the just released 2012 Honda Civic is rated 28/39, 32 mpg combined, i.e. $1,852 for gas a year, saving $197 when compare with 2011 model.

  • POHOLO

    Amazing, I did find it interesting that the car makers had an all out war against higher CAFE standards

  • Landman

    Using my Prius for work I figure I will spend approx. $2000+/yr on fuel based on 50mpg. Having traded in my Highlander in Oct I have saved significantly (up to approx $3000/yr) on fuel costs since then

  • jedediah_smith

    you are driving close to 25,000 a year……….thats an awful lot of miles……….
    my yearly total for work is under 600……….hence my F150.

  • Roger Robertson

    What hybrid buyers don’t realize in their desire for greater fuel economy is the cost of ownership of a hybrid. As an example:
    Assume a Prius battery lasts 150,000 miles and at that time the replacement cost is $8,000; and assume that the Prius average fuel economy = 48.0 MPG. Those numbers result in a fuel + Battery cost over 150,000 miles to be $20,500.
    Assume a 2012 Subaru Impreza average fuel economy = 35.0 MPG. The resulting fuel (no battery to replace) cost over 150,000 miles is $17,143.
    The results is that you spend more money on a Prius than an Impreza over 150,000 miles – and let’s not forget that the Prius costs more to purchase – so why own a Prius?
    I only picked the Impreza as an example – there’s many more vehicles in the Prius size that cost less and get better MPG than the Impreza, so I again ask – why the desire to own a Prius????

  • Jade

    That may be true, but if my large gas-guzzler is going to stay with me for a longer time than I’ve expected, I fear that I may end up broke and that the bank will eventually ask for a debt recovery. With this spicy price, I might as well walk until I reach my destination.

  • TangoKiloGolf

    You are correct, but only IF the cost of fuel stabilizes around $3 or $4 a gallon. Add an international challenge or two (or three), and jack gasoline prices to $7-8 a gallon and the math favors a Prius (or an EV). While nowadays, your no-car-payment savings of $250 at $3 a gallon is 83 gallons. At $8 a gallon, your $250 equates to 31 gallons. Assume 26 mpg in both instances, and your monthly mileage is 2168 (at 83 available gallons), but only 806 miles at $8 a gallon fuel. You’ll need your current $200 monthly fuel allotment to give you another 25 gallons x 26 mpg to get only 676 more miles. End result for your current gas guzzler at 26 mpg and $450 for fuel a month is only: 1,482 miles.

    Now, mentally switch to a 50 mpg hybrid with only $200 for fuel a month and you can travel 1,250; close to your total at $450.

    Point being, when the world stage curtain drops on fuel for the United States, and if you’re prepared with an efficient vehicle, you can travel long distances for cheap(er).

    However, if you’re not traveling more than 1,200 miles a month, and don’t want to (or need to), then keep your guzzler.

    Personally, I can envision $10 a gallon fuel in 5 years, which would be a nightmare. But why not be prepared? Go one step further and add a PHEV kit to your Prius, and drive-on.

  • TangoKiloGolf

    You are correct, but only IF the cost of fuel stabilizes around $3 or $4 a gallon. Add an international challenge or two (or three), and jack gasoline prices to $7-8 a gallon and the math favors a Prius (or an EV). While nowadays, your no-car-payment savings of $250 at $3 a gallon is 83 gallons. At $8 a gallon, your $250 equates to 31 gallons. Assume 26 mpg in both instances, and your monthly mileage is 2168 (at 83 available gallons), but only 806 miles at $8 a gallon fuel. You’ll need your current $200 monthly fuel allotment to give you another 25 gallons x 26 mpg to get only 676 more miles. End result for your current gas guzzler at 26 mpg and $450 for fuel a month is only: 1,482 miles.

    Now, mentally switch to a 50 mpg hybrid with only $200 for fuel a month and you can travel 1,250; close to your total at $450.

    Point being, when the world stage curtain drops on fuel for the United States, and if you’re prepared with an efficient vehicle, you can travel long distances for cheap(er).

    However, if you’re not traveling more than 1,200 miles a month, and don’t want to (or need to), then keep your guzzler.

    Personally, I can envision $10 a gallon fuel in 5 years, which would be a nightmare. But why not be prepared? Go one step further and add a PHEV kit to your Prius, and drive-on.

  • Tisho

    So the best purchase would be a Toyota Prius with a PHEV kit ? I’m first time buyer and I’m really confused, so hard to decide what kind of car to get when you are on a budget and you don’t know what will happen in future… are the gas prices will go up to $10 a gallon !? Who knows!
    I know the best thing is to buy electric car but that’s a LOT of MONEY !

  • tapra1

    Just the opposite. If you buy one of the truly efficient hybrids—like a Toyota Prius, Ford Escape Hybrid or Honda Insight,Best Cloud Hosting