As gasoline prices quickly approach an average of $4 a gallon across the country, many people are looking once again at hybrid cars as a way to cut expenditures from their budget and save money. However, before you trade-in your gas-guzzling sports utility vehicle, it is important to consider all the costs that are involved in purchasing an eco-friendly vehicle.
Gasoline and Hybrids
When people think about buying a hybrid car running on electricity, they think about all the savings from not having to buy gasoline. And since gasoline is usually the most explicit expenditure for car owners, each increase in its price leads people to automatically conclude that electric hybrid vehicles would save them lots of money.
However, there are many additional costs of an electric hybrid that many people fail to consider when thinking about buying such a car. The most obvious of such costs is simply its sticker price. The typical electric hybrid can cost as much as $5,000 more than the same car using just an internal combustion engine. This is an up-front cost that requires considerable savings over the life of the vehicle in order to justify that expense.
Consider the gasoline usage of a typical electric hybrid: 60 miles per gallon. This is roughly twice the average of a car using an internal combustion engine. With gasoline at $4 a gallon and assuming 10,000 miles of driving a year, you would save approximately $3,000 over five years. Of course, these savings would increase as gas prices move higher or if you put more miles on your car, but there are risks inherent in this as well. By purchasing a hybrid car, you are assuming the risk related to gasoline prices. If prices fall back to normal levels, you may never be able to recoup the costs of the hybrid vehicle.
Other Costs of a Hybrid
It is important to note that gasoline is not the only cost of a vehicle. Indeed, there are other increased costs of a hybrid, which many people fail to consider when buying a new car. For instance, since hybrid cars tend to cost more than their gasoline counterparts, auto insurance will cost more with a hybrid. Early evidence also indicates that hybrid cars depreciate faster than other cars. This will especially hurt if you are looking to trade-in your car at a later date to buy a newer model.
In the end, the savings of a hybrid electric car will hinge on the price of gasoline. If you believe that gasoline prices are only going higher, then a hybrid may indeed be the way to go. Otherwise, you may just want to stick with your current car and stomach those prices at the pump.
So, what do you think? Are you still going save for a hybrid?