There are two main advantages driving the sales in hybrid vehicles. To begin with, auto manufacturers claim that they are better for the environment, reducing fuel consumption and carbon emissions. At the same time, they appeal to those trying to save money on gas. While driving a hybrid car with excellent mileage will certainly reduce your emissions on the road, will it really save you money as well? It’s worth taking a closer look to see how the figures measure up.
Upfront Costs of Hybrid and Electric Vehicles
Although they are becoming increasingly mainstreamed, the specialised technology needed to create a hybrid car costs more than conventional vehicles. Despite government rebates and tax breaks, this still means that consumers will pay more for a Toyota Prius than for a non-electric Yaris from the same brand. A 2012 study in the New York Times found that car owners would have to drive the car for many years in order to reach the level of savings to justify the upfront costs.
Cost of Fuel
For more expensive hybrids, it’s estimated that a consumer would have to drive their car for up to 9 years in order to save enough money on gas to offset the higher initial sticker price of the car. Yet this calculation is directly related to the price of gas, which has been on the rise. The current price of gas hovers around $3.50 per gallon in the United States, but this can fluctuate significantly as any driver knows. Those who put a great deal of mileage on their cars for work or live in an area with higher than average fuel prices will find that purchasing a hybrid Kia Cerato or electric Nissan Leaf could really pay off at the pump. However, if you are a city dweller who relies more on public transportation than a car for your commute, it may not justify the cost of a hybrid.
Another factor that not all drivers immediately think of is the cost of depreciation. Whether you buy a hybrid, diesel, or conventional gas guzzler, your car is going to lose a significant percentage of its value once you drive it off the lot. Hybrid sales have been growing in recent years, with more consumers interested in green-friendly options. The Prius is already known for being one of the most depreciation-proof vehicles, for its economy and reliability. Buying a hybrid could allow you to sell your used car at a higher price down the road than if you had purchased a standard model.
If you plan on trading in your car after only two years of use, or don’t drive all that often, it probably doesn’t make financial sense to purchase a hybrid at the moment. Yet for those looking for a longer term investment, there are many reasons to go hybrid. Improvements in technology mean that hybrids are now coming onto the market with lower selling prices than ever, and as gas prices continue to grow this will make them increasingly financially viable.