Will a “Green” Car Really Save You Money?

Having a green car can really help you feel better about how your driving habits impact the environment. Plus, green cars tend to help you save money on gas, right? After all, if you have a greener car that gets better gas mileage, you don’t have to fill up as often.

However, sometimes a green car won’t save you as much as you thought. Consumer Reports recently analyzed 2011 models of green cars, and their “non-green” counterparts to get an idea of what is likely to really save you money.

Could You Save More In The Long Run With a Non-Green Car?

The Consumer Reports comparison made a few assumptions when running its comparisons:

  • Gas costs $4 per gallon
  • Insurance costs
  • Depreciation
  • Cars driven 12,000 miles a year
  • Original cost

 

It seems as though some green cars offer better savings than others. The report found that the Chevy Volt, the electric car that gets the equivalent of 61 miles to the gallon, would cost more after five years than the Chevy Cruze ILT. The costs are apparently higher to maintain the Volt, even though the Cruze only gets 26 miles to the gallon. Clearly, there are other factors at play here, just beyond the fuel savings.

On the other hand, Consumer Reports found that the Toyota Prius Two offers handy savings over the Toyota Corolla after five years. Even though the Prius costs more than the Corolla initially (the Volt costs much more than the Cruze initially, and it is difficult to recoup that cost), the savings over time add up to a difference of $1,500 during the first five years. That’s not bad at all.

I know that my family has saved, thanks the Prius. With the Prius as our main car for my husband’s commute to work (I work from home) and our main errand and travel car, it’s easy to save up. We use less gas for our second car, which I use to take my son to and from school/activities, and that is used for camping trips, and winter driving when the snow and ice threaten.

What About Other Types of Green Cars?

Whether or not a car is a hybrid, or electric, or neither, is not the only measure of “green” cars. In some cases, there are cars that are made with partial zero-emissions. These vehicles (referred to as PZEV) are made in a way that at some point in the process, there are no environmentally damaging emissions. While my husband and I have a Prius (which is a PZEV on top of being a hybrid), we also wanted something for camping, and for winter driving. We went with a Subaru Outback. While not entirely “green”, the PVEZ label does help a little, since we know that somewhat green processes were used to create the car.

I don’t know that having a PZEV actually saves you money, though. Indeed, you might actually end up spending more for the specific processes. I know that our Outback had a higher initial cost than some of the other cars we might have bought for similar purposes. (Although I expect loss due to depreciation to be less of a cost, since Outbacks tend to hold their value fairly well.)

Another Cost Consideration With a Green Car: Home Power

It’s also important to note that there are other cost considerations that might come with a green car. One of those has to do with charging an electric battery, or charging your plug-in hybrid. While you might pay less in gas, are those savings offset by a higher electricity bill at home? (And, if so, does that electricity come from a coal or oil burning plant that adds pollution to the air?)

Sometimes, we are so eager to save money on gas that we forget that we might be paying more in other quarters, whether it’s a higher sticker price (along with the higher interest paid on a higher loan, if you borrow), or it’s higher energy costs at home because you plug in your car. If money is important to you, run the numbers before you buy a “green” car — just to make sure the savings are really there.

Is Sustainability More Important Than Saving?

Of course, for some it is more important to get something that is more environmentally friendly, even if it costs more money. There are those willing to pay a higher initial price for something that will truly reduce their impact on the environment. If that is important to you, find out what you can about the construction process, as well as look at the fuel consumption savings and environmental impact.

What do you think? Are green cars all they’re cracked up to be? Would you pay more for a car that truly reduced your impact on the environment?

Posted in Go Green permalink

About Miranda (Staff Writer)

Miranda is a freelance writer and professional blogger specializing in business, personal finance, and investing. She is a contributor for several personal finance web sites, and her work has been mentioned in, and linked to from, several online and offline publications. Miranda also has her own personal finance blog: Planting Money Seeds.

Comments

Will a “Green” Car Really Save You Money? — 24 Comments

  1. I would. When I bought my most recent car, I was backed pretty well into a corner financially, so a green car wasn’t an option. Next time around, I’ll be willing to shell out the extra cash to decrease my impact on the environment.

  2. If you want a “green car,” just look to buy used! We got a 2009 Prius will less than 20,000 miles for about 17K. It has tons of options on it including a touch screen console and some other cool stuff. We save tons of money on gas. On vacation in April, we drove from Indiana to the gulf coast, over to New Orleans, back to the gulf coast, then back to Indiana for about $120 in gas.

    Not only do I like saving money but I also like conserving resources. It gets about 50 mph on average.

    • Great point! You can reduce the waste and impact on the environment by buying used. We bought our 2007 Prius used 3 1/2 years ago, and it’s been a great car, as well as one that saves on gas money.

  3. To answer your question: I think sustainability and savings have to be weighed. I may pay more for sustainability, but there certainly is a crossover point where it just doesn’t make economic sense. I could use the money I save by becoming sustainable in other ways.

    • You’re right that often you get to a point where it might be better to concentrate on becoming more sustainable in one area to make up for the fact that it just isn’t feasible to try to be sustainable in another. A lot of it is about trying to find balance.

  4. Green cars are a bit of an enigma to me. I ‘think’ that they say money, but I’m really not sure how much or if its worth the added purchase price. Off to read the electric car post…

  5. Imagine how this calculation would be changed if the true and long-term costs of burning gasoline were reflected in its price. Seems to me that, once again, we’re borrowing money from our descendants to subsidize a cheap-energy lifestyle today.

    • Interesting take! So often we forget that what we do now has an impact down the road. And fossil fuels may be cheap now, but the fact that they are limited resources mean that, eventually, the price has to go up. And we won’t be around to pay it — our grandchildren will have to foot that bill.

  6. I think it will continue to get cheaper for hybrids over the next few years (and keep moving that direction for a decade, if not longer). I am actually considering buying a hybrid for our next car – but only after our car is on its last leg.

  7. ‘Green’ cars cost significantly more expensive than conventional cars the last I checked. In 2008, I considered buying a Honda Civic Hybrid. The non hybrid vehicle sold for over $3000 more if I remember correctly. I used the $4 per gallon figure back then to calculate how much money I would save on gas with the Hybrid. I determined that I’d have to drive the vehicle for about 7 years to offset the extra vehicle cost with my gas savings.

    I don’t think you can have it both ways here. That being both saving money and helping the environment. If you purchase the car that’s more environmentally friendly, it’s gonna cost a lot more money.

    • You may be right. I hope that price drops though as the technology expands and the demand goes up.

      We may not be able to have it both ways. For me I like to spend money on the things that matter to me and save on the things that don’t. So, since being green matters to me I would pay for a greener car.

  8. True. I think it all depends on where your power source is from. If your energy source can be clean and renewable it doesn’t matter how much you use of it. Where we have issues is if your electricity is from coal or something. In this case an electric car would cause more damage.

  9. PZEV has nothing to do with manufacturing. While Toyota does take steps to use best processes in manufacturing, PZEV refers to the operating emissions (mechanisms to prevent the release of un- and partially-burned fuel in particular).

  10. Save yourself a car payment. Buy a used car for less than $10k. Then pay yourself a car payment, so you have money set aside to fix any problems that you might have. (Or buy a new car when that one dies!)

Leave a Reply

Your email address will not be published. Required fields are marked *

I appreciate your readership and really enjoy hearing your thoughts on different topics. Thank you for contributing to the discussion.