Are Hybrid Cars Worth It?

When my coworker showed up to the office in his brand new Chevrolet Volt, it got me wondering. Are these hybrid cars really worth buying? Here are 5 factors to help determine if hybrid cars are worth buying:

Fuel savings – The primary reason why people consider hybrid cars is fuel savings. Since 2009, gas prices have steadily increased. One can only wonder how high gas prices will be when summer comes. More people are looking at hybrid cars these days. But not all hybrid cars are created (or priced) equally.

The 2011 Honda CR-Z is a hybrid car that has an MSRP of only $19, 345. It has a fuel economy of 31 city/37 hwy. It is in the same class as the non-hybrid 2011 Honda Fit, which has a fuel economy of 27 city/33 hwy and retails for $4000 less. So is it worth it to buy the Honda CR-Z over the Honda Fit? Let’s compare the two, looking strictly at fuel economy vs. the price of the car. The Honda CR-Z is 4 miles per gallon better than the Honda Fit. That means you get 42 free miles or roughly 1 free gallon every time you fill up the CR-Z. If 1 gallon of gas is $3, the CR-Z saves you $3 every time you fill up. If we fill up once a week, that’s a savings of $156 a year or $1560 over 10 years. That sounds like a decent amount of savings until you remember that the CR-Z costs $4000 more than the Fit.

The 2011 Chevrolet Volt is a high-end hybrid car that can power itself solely on battery power for up to 40 miles. After that, you can either recharge the battery or let the gas engine take over. Fuel economy is estimated at 95 city/90 hwy, but if you only use it to drive 40 miles round-trip each day then it’s not consuming any fuel. This high-end hybrid car retails for $40,280. So if we assume the best case scenario of driving solely on battery power, how does this car compare to the Honda Fit? Let’s assume we are driving 40 miles a day, 5 days a week. That’s 10,400 miles a year. The fuel cost for the Volt is $0. The fuel cost for the Fit is about $1100 a year. But since the Volt costs $25,000 more than the Fit, you’ll have to keep the Volt for 22 years before you break even on your investment.

Incentives – 2010 marked the end of a big round of federal tax credits for hybrid cars. But that doesn’t mean the incentives are gone. There is currently a $7500 tax credit for the Chevrolet Volt. More federal and state incentives could be on the way. You can search all federal and state incentives online.

Performance – If you are looking for a high-performance vehicle, hybrid cars are not for you. Though the car manufacturers boast horsepower and torque numbers, hybrid engines don’t compare to traditional gas engines when it comes to performance. The 2011 Toyota Prius claims 134 horsepower, but goes zero to 60 mph in a sluggish 10.1 seconds.

Maintenance – With all of that new, fancy technology under the hood, one might think that maintenance costs would be high. That isn’t necessarily the case. In a 2010 study by Consumer Reports, Honda and Toyota hybrid service schedules did not require “any special maintenance beyond what a regular car needs.” The report goes on to say that some Toyota Prius vehicles have gone over 200,000 miles on the original hybrid battery packs.

“Cool” factor – Going “green” is trendy these days. Many celebrities own hybrid cars. Of course if we all made money like celebrities, then we’d be fortunate enough to buy hybrid cars too. Traditional gas-powered cars can’t compete with hybrids, if you want to do your part and go green.

Hybrid cars are different and so are owners. Depending on your needs and resources, a hybrid car could be worth it. Just be sure to look at all the factors so you can make an informed decision.

Sources:
1. U.S. News & World Report, “Car Rankings: Hybrid Cars”, http://usnews.rankingsandreviews.com/cars-trucks/rankings/Hybrid-Cars/

2. edmunds.com, “Hybrid and Electric Center”, http://www.edmunds.com/hybrid/

3. eia, “Retail Gasoline Historical Prices”, http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_history.html

4. U.S. Department Of Energy, “Federal Tax Credits for Hybrids”, http://www.fueleconomy.gov/feg/tax_hybrid.shtml

5. U.S. Department Of Energy, “Federal Tax Credits for Plug-in Hybrids”, http://www.fueleconomy.gov/feg/taxphevb.shtml

6. U.S. Department of Energy, “Federal & State Incentives & Laws”, http://www.afdc.energy.gov/afdc/laws/

7. ConsumerReports.org, “Hybrid car maintenance”, http://www.consumerreports.org/cro/cars/new-cars/news/2008/04/guide-to-hybrid-cars/hybrid-maintenance/hybrid-maintenance.htm