Does A Hybrid Pay For Itself?

As of October 2013, hybrids have been purchased by three million Americans since Honda introduced the Insight in December 1999 and sold its first 17 units.

After that, and the rise of the Toyota Prius beginning in 2000, automakers have introduced more hybrid cars, SUVs, trucks and in 2013 the U.S. has 40 models being sold.

As a type of vehicle, hybrids have had to overcome a gauntlet of critics, having been attacked, maligned, scrutinized – and they’ve gained many loyal supporters, who’ve alternately defended, valued, and even loved them.

In deciding whether a hybrid of some sort makes sense for you, finding advice is easy but also conflicting. A quick Web search will turn up some advising “no,” others “maybe,” others “yes.”

Our advice is rational and assumes nothing: Maybe.

The actual answer depends on your needs, budget, tastes, lifestyle, values or whatever else motivates you, but – given the title of this article – we’ll answer that first.

Ford Fusion Hybrid.

Ford Fusion Hybrid.

What if all you care about is money? If reducing petroleum usage and helping the environment meant nothing to you, could a hybrid still be a wise financial decision?

The short answer is yes, some hybrids can make financial sense if you keep and drive them an average duration – and others would not make sense to a purely dollar-motivated person.

The Penny Pincher’s Choice

Beyond a practically no-brainer choice like the Lincoln MKZ Hybrid that’s priced the same as the non-hybrid Lincoln MKZ, most hybrid variants do cost more than conventional counterparts because of their gas-electric powertrains.

A reliable indicator of hybrids that make the most sense is the HybridCars.com Dashboard which ranks monthly sales for all U.S. hybrids.

The best sellers tend to be ones that do make better financial sense – and they’re also helped by being generally desired and trusted.

In October 2013 consumers voted their bank accounts in favor of 8,239 examples of the first-place Prius Liftback, 2,903 examples of the third-place Camry Hybrid, 2,577 of the fifth-place Ford Fusion Hybrid.

Non-hybrid Camry LE.

Non-hybrid Camry LE.

Of these, the Camry and Fusion are easiest to compare like-for-like to conventional counterparts, being hybridized variants. The same applies to cars like the Kia Optima Hybrid, Hyundai Sonata Hybrid, and others.

Camry Hybrid LE.

Camry Hybrid LE.

Taking as an example the Camry Hybrid LE versus the non-hybrid Camry LE, a cost of ownership calculator by Intellichoice figures after five years the hybrid nearly closes a $3,460 base price difference with a cost of ownership of $30,455 for the hybrid compared to $30,335 for the non hybrid.

SEE ALSO: Is the Toyota Prius Worth It?

If you keep it longer, drive longer, or gas prices increase, payback would be quicker and it keeps paying back the longer you keep it.

Of course some hybrids do not make as good of a value proposition, but still sell, and we’ll touch on why this might be further along.

Dig Deeper

The Camry is just one example, and you can investigate other models and look for more online cost-to-own calculators to cross check, or make your own spreadsheet. It’s not difficult.

You’ll want to pay attention to anticipated variables mentioned as well as insurance premiums, maintenance costs and expected resale value.

Kia Optima Hybrid.

Kia Optima Hybrid.

How long do you expect to keep the car? Maintenance costs for items like brakes tend to be cheaper as regenerative braking lets pads last longer for hybrids.

On the other hand, hybrids have a dual powertrain, so you do have electric motor(s), control software and propulsion battery to consider. The past 13 years have shown a relatively good record for some models over others. Toyota’s NiMh batteries have tended to last well on average. Others have had various issues. New models we cannot speak for.

There are aftermarket battery sellers now, and this should grow in coming years broadening options for long-term car owners.

Soft Variables

A high-mpg hybrid is a hedge against rising fuel prices. That is, the higher gas prices rise, the quicker the payback. If you factor current gas prices around $3.40 per gallon, where do you think fuel prices will go during the life of the car?

Another factor is a high-mpg car needs to stop for gas less frequently. This is a convenience and saves the hassle of stopping to pay the fuel pump as often.

Underlying Considerations

Hybrids do use petroleum and pollute but they use less and emit less than lower mpg cars.

They say you are either “part of the problem or part of the solution.” If you believe that and can see it applying to a cleaner and less wasteful car, that’s a valid reason to go hybrid.

Toyota Prius Liftback.

Toyota Prius Liftback.

According to the U.S. Energy Information Administration approximately two-thirds of all the oil consumed in the U.S. is used for transportation. According to data as recent as 2011, 93 percent of America’s transportation depends on oil. Hybrid vehicles can reduce dependence on oil and decrease harmful economic effects of fluctuating oil prices.

Not to invalidate electric cars or plug-in hybrids, but regular hybrids can feel simpler to deal with and do not need charging equipment or a dedicated electric line at home.

Still More considerations

Aside from energy and environmental needs that gave rise to hybrids in the first place, just as important are the usual car buying considerations – concerns for quality, reliability and how you like a given car.

Cars with track records are easier to bet on versus new releases. Consulting sources like Kelly Blue Book and Consumer Reports can shed light on better bets and what to hope for regarding the “investment” – which is not an investment, but ultimately an expense.

And this brings us to our last point.

Bottom Line

This article catered to the usual cost-conscious calculus to show some hybrids can carry their weight no matter how narrow someone’s priorities.

Others mindful of how people really make decisions have however called the dispassionate “total cost to own” process a charade that ignores deeper factors.

Ford C-Max Hybrid.

Ford C-Max Hybrid.

Here are some thoughts for you to ponder:

Does the “car guy” who opts for a stick shift do so to save money compared to an automatic or simply because he wants the control that comes with a manual? Does he break even on gas mileage and resale value?

Does the person who opts for a Corvette Stingray that goes faster than you’ll ever need on the street do so because he’s crunched the numbers and found this is the wisest money spent.

Does the buyer of a Mercedes-Benz luxury sedan do so because the car is engineered against planned obsolescence and she is shooting for the million mile club?

Or do people pay for what they want and rationalize it any way they wish?

Quote: “People don’t buy for logical reasons. They buy for emotional reasons. – Zig Ziglar

 
Hybrids are still outliving the days of hard-hitting analysis pieces such as the May 2005 Edmunds.com-USA Today article that said hybrid owners would have to drive tens of thousands of extra miles a year, or gasoline would have to hit $5.60 a gallon before reaching the break-even point with a comparable gas-powered model.

Talk about a double standard.

Why are hybrids held under such a microscope when other extravagances get a total pass, and their buyers may even get boasting rights and preferential treatment?

Is the “need for speed” or a refined “experience” afforded by a luxury car a more valid reason to pay more for a car than the desire to waste less fossil fuels, and pollute the earth less?

Toyota Prius c.

Toyota Prius c.

What’s more, since 2005, hybrids have increased the mpg gap compared to earlier cars Edmunds scrutinized with measurement criteria that were challenged by hybrid advocates. Also shortly afterwards, Consumer Reports documented Prius owners voted their cars above all others and CR projected the Prius would save owners money over time.

SEE ALSO: Should You Buy a Plug-in Hybrid?

This said, if your budget is super tight, there are cheaper cars in the low to mid teens.

If your budget will allow a hybrid – the Prius c starts just under $20,000 and gets 50 mpg – comparing cars should weigh all of what you get, not just calculate extra dollars spent and mpg saved – but ultimately you are the arbiter of value for which you will spend your money.

So, are hybrids a valid choice? We said maybe, but that means the answer can be “yes.”

You need not take our word on this either. Three million Americans have already agreed, more hybrids will be introduced, and sales are increasing.

Among modern-era “electrified” vehicles, the hybrid path has had the longest time of being defended and defined.