When fuel efficient, hybrid cars like the Toyota Prius first hit the market, they were all the rage. Back then it seemed like gas prices would never stop rising. The Prius provided hope, not only for environmentalists, but for those looking for a car they didn’t need to pump $100 of gas into every week.
But now, with gas prices much lower than they once were, and still going down, one starts to wonder if the cost of driving a hybrid is worth the environmental benefits. Let’s take a look at how much you really save (or don’t save) with a hybrid car.
Fuel savings don’t always offset the extra cost
No matter which hybrid car you buy, if your driving habits are about average (15,000 miles per year), it’ll take years of driving until you actually start saving.
I used fueleconomy.gov to compare hybrid vs. non-hybrid versions of the same brand. The payback period only takes into consideration the initial cost of the vehicle and fuel price.
|Hybrid||Gas||Years to Recoup|
|Toyota Prius One - $21,035||Toyota Yaris - $18,499||7.4|
|Hyundai Sonata Hybrid - $26,835||Hyundai Sonata SE - $22,785||11.9|
|Chevrolet Malibu Hybrid - $28,750||Chevrolet Malibu - $26,000||6.6|
|Kia Optima Hybrid - $31,885||Kia Optima EX - $29,935||4.5|
As you can see with these few examples, not all hybrids are created equal. The Kia Optima Hybrid only has a payback period of 4.5 years—so if you drive a lot and have a couple extra thousand initially, opting for the hybrid with 42 mpg might serve you better than a traditional Kia with just 28 mpg. The same can’t be said for the Hyundai Sonata, which takes a whopping 11.9 years to recoup the $4,000 higher sticker price.
Of course, the math all depends on several favors, but gas prices are the big one. On the face of it, if gas prices double, the time to break even should be cut in half. But consider also that if we do see an increase in gas prices, demand for hybrids will increase. That likely mean an increase in upfront costs (sales price).
If you drive more than the average 15,000 miles in a year, you’ll break even a lot sooner. But if you’re just looking to get a hybrid because that’s what’s “in” these days, your best financial move is to opt for a non-hybrid model.
Cost of repairs and maintenance
Where hybrid cars do tend to save you money is through repairs. They need very little work over the course of their lifetime; at least until the battery needs to be replaced. Luckily, it isn’t until around 180,000 miles or more that the battery starts to wear.
Battery replacement hovers around a couple thousand for hybrid cars, while most traditional cars you can replace the battery for less than $200.
Another cost to think about with any car is insurance. Depending on the state you live in, driving a hybrid car can lower or raise your typical insurance rates.
A hybrid may raise your insurance rates because they’re more expensive cars, have costlier repairs when they do need to be fixed, and drivers of hybrid cars are on the road more frequently.
Hybrids do last a long time
One of the great things about hybrids is their warranties. They tend to have longer warranties than other cars. For example, the Toyota Prius comes with an eight-year or 100,000-mile warranty (sometimes more in certain states).
The fact that hybrids boast a long warranty means they’re meant to last longer than your average car—and they do.
Cost of depreciation
The depreciation value for a hybrid is about the same as most other cars. But, hybrids are more expensive and have the appeal of being fuel efficient, so a used hybrid still sells for a lot. This is great for the seller, not so much for the buyer.
Depending on how long the previous owner has had the hybrid, will determine if it’s a good idea to buy a used hybrid.
A good rule is to avoid used and go for a new hybrid (if your budget can afford it). If the owner is selling, this likely means the warranty is up. This also means the car has gone over 100,000 and likely will need repairs. You’re also getting closer to having to replace the $2,000 battery.
If you’re set on buying used, it’s best to buy a cheaper car that’s still in good condition.
Performance of hybrids vs. non hybrids
When considering a hybrid car, you’ll want to consider what you’re looking for. If you spend a lot of time on the road and you’re just looking for a car to get you from point A to B, with nothing fancy, a hybrid could very well be for you.
But what most hybrids make up for in fuel efficiency, they lack in performance. Hybrids are small, and most don’t offer the most intimidating acceleration.
The one saving grace is how quiet hybrids are. Some people are willing to give up weak acceleration for a car that offers a small hum.
What about electric cars?
Just for fun, let’s take a look at electric cars. First, let me start by saying, if you’re looking to buy a car on a budget, there are very few electric cars that are for you.
A car like the Tesla Model 3—Tesla’s cheapest model—which will begin production this year, will start at a base price of $35,000 (that’s super cheap for Tesla). Their cheaper current model starts at about $70,000.
In an ideal world where we could all buy electric cars that still look cool (Think Tesla instead of Nissan Leaf), we’d only be spending about $540 a year instead of the $1,400 the average driver spends in gas per year. But we’re still a long way away from that.
Owning a hybrid car these days is more about being environmentally conscious than saving money. If you plan to have your car for a long time (which most people do), you’ll save some, but it’s nowhere close to what manufacturers were raving about a few years ago. The upfront cost of a hybrid is usually what sways people one way or the other.