Will Hybrids Ever Save You Money? Yes! (Maybe)

Did that factor in the tax credits offered in many places?

Also, lets not forget that people outside the USA have to deal (generally - a few countries are exceptions) with higher gasoline prices, and that all signs point to gas being more expensive in the near future.

Always a good idea to walk or take your bike, though :)

"We've previously pondered why people buy hybrid cars; our general perception is that altruism rules over economy, that it's not necessarily for the cash saved at the pump."

I think that perception is created by the ceaseless propaganda which keeps claiming it to be true, despite the fact that it isn't.

Take a standard hybrid premium of around $4K and gasoline at $2.914 (latest average US price) and the simple payback is 1,373 gallons. Even with a car with a relatively small increase in efficiency, like the Accord Hybrid (23 v 28 mpg), you'll still save 116 gallons every 15,000 miles, with the breakeven at 177,000 miles.

Most people get confused because they don't understand that the fuel economy benefits exist no matter how long you own the car, such that the next owner will find value in the savings and this is reflected in higher resale. It's like any other investment analysis.

So, as long as the payback mileage is less than the useful life of the vehicle, then it's a good investment.

Naturally, a more complete economic analysisis is going to factor in tax breaks, the risk premium associated with being more vulnerable to fuel price increases, the time and economic value of HOV lane access, preferential/free parking, less time refueling, etc, as well as the less tangible values of appearances (eg, real estate agents with an urban sales base). And it's also hard to put a value on guilt assuagement and contributing towards progress and the common good.

Most of the "analyses" which try to diss the economic equation for hybrids do things like dismiss their MPG ratings, inflate the price premium, assume lower gas prices, ignore the risk premium, tax benefits, and all the other factors which can actually be measured in dollar terms.

It's also incredibly disingenuous, since no one ever seems to question the economic rationality of getting a more powerful engine, leather seats, or any other kind of option which adds to the cost of a car and will always have a negative return rate.

"We've previously pondered why people buy hybrid cars; our general perception is that altruism rules over economy, that it's not necessarily for the cash saved at the pump."

I think that perception is created by the ceaseless propaganda which keeps claiming it to be true, despite the fact that it isn't.

Take a standard hybrid premium of around $4K and gasoline at $2.914 (latest average US price) and the simple payback is 1,373 gallons. Even with a car with a relatively small increase in efficiency, like the Accord Hybrid (23 v 28 mpg), you'll still save 116 gallons every 15,000 miles, with the breakeven at 177,000 miles.

Most people get confused because they don't understand that the fuel economy benefits exist no matter how long you own the car, such that the next owner will find value in the savings and this is reflected in higher resale. It's like any other investment analysis.

So, as long as the payback mileage is less than the useful life of the vehicle, then it's a good investment.

Naturally, a more complete economic analysisis is going to factor in tax breaks, the risk premium associated with being more vulnerable to fuel price increases, the time and economic value of HOV lane access, preferential/free parking, less time refueling, etc, as well as the less tangible values of appearances (eg, real estate agents with an urban sales base). And it's also hard to put a value on guilt assuagement and contributing towards progress and the common good.

Most of the "analyses" which try to diss the economic equation for hybrids do things like dismiss their MPG ratings, inflate the price premium, assume lower gas prices, ignore the risk premium, tax benefits, and all the other factors which can actually be measured in dollar terms.

It's also incredibly disingenuous, since no one ever seems to question the economic rationality of getting a more powerful engine, leather seats, or any other kind of option which adds to the cost of a car and will always have a negative return rate.

Remember that a the best is to use your current car for longer, so you minimize the manufacturing waste that is involved in high consumption rates.

Listen to Aaron. Not only do you save the environmental impact from creation of a new car, but you save money, too.

My 1987 camry cost me $500. A new prius would cost me about $500 PER MONTH. My camry gets about 30mpg in the city (which the article says is better than a hybrid Accord), the prius gets 45-48. How many miles do I have to drive before the cost of gas offsets the $26k+ difference in the cost of the cars (don't forget interest!)?

I'd buy a hybrid for its environmental benefit. I'd consider buying a hybrid if I absolutely had to buy a new car, but I'd still weigh it against a smaller MUCH cheaper car like the Yaris.

Factor in also the social good, which is 80% fewer emissions per mile driven. This factor results in a lower health hazard for everyone, plus a lower requiired investment in end of pipe pollution control and greater economic development potential for "fixed sources" of emissions in compromised "air-sheds". If half the fleet were hybrid, air quality standards in would be easy to meet, which would mean no "exemption" need be issued to lower the price of fuel. What's hard to grasp about this?

"Remember that a the best is to use your current car for longer, so you minimize the manufacturing waste that is involved in high consumption rates."

No such generalization can be made.

Take a look at this chart that Toyota made comparing the Prius (B) with an average vehicle in its size class (A).

http://toyota.jp/prius/ecology/image/eco02.gif

The three colors above the two blues are post-production waste. More CO2, NOx, and SOx are produced from using the vehicle compared to making it. And clearly a car like a hybrid is going to have lower overall pollutant output on a lifecycle basis, as you can see from the chart, with the exception of a slight increase in particulate matter (though production- and extraction-point emissions of PM's are going to be safer than amidst populated areas).

The differences are going to be even more pronounced between vehicles of vastly different fuel efficiency and emissions (eg, pre-catalytic beats versus modern hyrbids designed for economy).

Joseph, I agree that that chart might be accurate (it is from Toyota ie:interested party) but my point is the entire production of a car, from plastic and metal manufacturing to transport to point of sale is expensive and wasteful.

How can we consider ourselves earth friendly when we feel compelled to upgrade to the newest everything. Each time we are adding to our overall impact on the earths resources. Conservation means not buying the eco-friendly product sometimes.

With this said, if you do have to buy new (like commercial fleets, etc.) then buying 100% recyclable cars that are low on emissions are the way to go. I think the EU requires their car manufactures to comply with this. might be wrong on that though.

But for us average car people, a 5 year old car is really not that old. And buying used is a form of recycling isn't it?

"My camry gets about 30mpg in the city (which the article says is better than a hybrid Accord), the prius gets 45-48. How many miles do I have to drive before the cost of gas offsets the $26k+ difference in the cost of the cars (don't forget interest!)?"

See? That's a typical means of skewing the economics of hybrids.

First of all, buying and using a $500 car is a pain in the butt. As I have two such vehicles, I know of what I speak. They also usually require quite a bit of investment to get them functional (especially from a safety perspective) beyond such a low purchase price.

So to think it's a replicable model at a lareg scale is not correct (if only simply because there's a finite supply of high mileage vehicles in good condition that cost peanuts).

Second, you're taking inflated calculations about fuel mileage for your vehicle (which is rated 25 in the city for the automatic and 27 in the city for the manual) and comparing it to a low-end assumption for the Prius - FAR lower than its 60 MPG city rating. And it's very hard to keep up fuel economy as a car gets older without being very thorough about upkeep and driving techniques. You're also taking the very high end of the Prius price spectrum.

So what you're doing is making a false comparison from the get go with your numbers.

If you want to talk basic economics, then the way to compare is on a cost per mile basis. I can get a brand new Prius and the insurance on it is going to be pretty much the same as my old Civics. Your main cost with any new vehicle is going to be depreciation, but that's got to be compared with the cost of maintenance and repair of an older vehicle. Then you also have to put some value difference into ride quality, safety, performance, and yes, appearance. You also have to account for the value of people's time - time to keep it repaired and maintained, tracking down old parts, dealing with reputable mechanics, negotiating prices, etc.

Like I said, I drive old cars and it can be a good alternative, but it's not really applicable to most people.

I'm sorry but I gotta call BS on one thing. 80% fewer emmissions/mile. Sorry but most people are getting in the 40's with some up to 50 MPG from their Prius. I get over 25 with my Accord. Since we're talking gas burned here I would say the prius is 50% better, being a hybrid doesn't make it magiclly produce less polution out of a gallon of gas it just goes further on that gallon. How do they come to the 80% figure. I will not include trucks because the Prius is a car so well compair car to car. So even it it got 60 MPG that's still around 60%.

I AM NOT HATING ON THE CAR OR HYBRIDS BUT THAT 80% IS FUZZY MATH.

On the I would say that for some one who drives very little a hybrid makes little sense because the payoff is a long way out. Prices will come down however.

I want a Tango myself, they have a cool video over on Jalopnik today, 0-60 in 4 sec and not buring a drop of gas. I could use it to commute in and save the gas car for long trips.

"emissions" generally refers to NOx and other smog forming polluting emissions. The Prius, being AT-PZEV *is* 80% (and more, actually) cleaner than most other cars. In fact, Toyota engineers have said numerous times that their priority when designing their HSD hybrid system was to reduce these emissions, and then after that came fuel economy.

Fuel consumption/carbon emissions is another matter, but there too the Prius fares well (esp. if you compare the CITY miles too, and not just the highway miles like most people do..).

Joseph W.

You are correct in saying a used car is a poor comparison to a new car but note what else was said:

"Prius - FAR lower than its 60 MPG city rating."

I have yet to see anyone report that they are getting this high a MPG.

"And it's very hard to keep up fuel economy as a car gets older without being very thorough about upkeep and driving techniques."

Keep in mind this will be true for all cars including hybrids. Assuming the gas engine becomes less efficent over time the MPG my decrease.

According to Greenhybrid.com which compiles real world fuel economy data, the Prius HSD has an average of 48 mpg.

The thing is, the people who get in the 30s in a Prius would probably get in the high 10s in an Accord. If you don't change the way you drive, or only do very short drives (engine doesn't have time to warm up), or are a car reviewer that drives like on a racetrack, you'll drive like that regardless of what you drive, hybrid or not.

"Sorry but most people are getting in the 40's with some up to 50 MPG from their Prius."

The Green Hyrbid database shows people averaging 47.5 with a large number getting about 50.

http://www.greenhybrid.com/compare/mileage/toyota-priushsd.html

"How do they come to the 80% figure."

It's based on EPA emissions ratings. Their claim is "vehicles powered by Hybrid Synergy Drive are about 80 percent cleaner than the average car on the road".

http://www.epa.gov/autoemissions/rating.htm
http://www.toyota.com/about/news/environment/2005/09/21-1-hsd.html

The Prius is 8 in most states and 9.5 in others. So if you look at NOx and NMOG levels, they're about 1/9 to 1/5 of vehicles with a score of 4 or 5. Then you have to factor in that it isn't just new cars on the road. So that's probably how they're getting at the number.

"On the I would say that for some one who drives very little a hybrid makes little sense because the payoff is a long way out."

The average household drives over 21,000 miles per year, and the average new vehicle is driven 15,000 miles per year. So, about the only people who would have trouble recouping the investment would be low-mile drivers who hold cars for a long time. Otherwise, the fuel savings will have value upon selling it, which will recoup a good portion of the original investment in paying a premium.

"I want a Tango myself, they have a cool video over on Jalopnik today, 0-60 in 4 sec and not buring a drop of gas."

That car costs $108,000.

"I have yet to see anyone report that they are getting this high a MPG."

That's because every database tracks combined mileage, not city mileage. There's 8 outliers in the GreenHybrid database I just linked to getting over 60 MPG combined, so if you haven't seen anyone getting 60 MPG+, then you didn't go to that page.

Chris is the one who brought up city mileage, so that's why I questioned the numbers he was giving (which are below real-world averages for combined mileage).

"Keep in mind this will be true for all cars including hybrids. Assuming the gas engine becomes less efficent over time the MPG my decrease."

Of course, but it's going to be less pronounced in a new vehicle than an old vehicle, so one will be front-loading fuel savings with the hyrbid disproportionately. We don't know yet what kind of drop off in efficiency will be seen with time with those vehicles. One of the differences with them is that they're more complex to maintain, so it might be more likely that they'll be better maintained over time by going to better mechanics, though that will come with a price premium.

My basic point, though, is that the basic payback calculations are favorable for all true hybrids, even without considering things like tax benefits, HOV lane access, etc., and that comparing these new vehicles to old econoboxes needs to be done with a large number of caveats.

The guy said in the video they would like to mass produce it and get the price down to 10K. BTW it was 80K. I'd buy it for 10-15K but not 80K. Still the thing handles like a go cart with most of the weight down low and is quick. Looks like it'd be a blast.

I didn't know so much about the PZEV rating but how does it stack up to say a car that is rated ULEV-2. I bet it's not 80%. I was trying to compair it to an Accord being that they are similar in size.

You can see a chart of emissions standards at the bottom of this page:

Link.

You can do the math yourself, but there's a pretty big difference.

Also note that AT-PZEV has an emisions system that is rated for 15/years 150k miles, while ULEV2 is only 100k miles (not sure how many years, probably 10).

"The guy said in the video they would like to mass produce it and get the price down to 10K. BTW it was 80K. I'd buy it for 10-15K but not 80K."

I'm just going by the prices on their website. The T600 is the one which hits 60 in 4 seconds and is a kit car. The T200 and T100 are vaporware at this point, so the prices are just estimates. Even so, the T100 is estimated to be $19K and will hit 60 in 7 seconds.

http://commutercars.com/ordering.php

The funny thing about the car is that it uses the batteries as ballast for stability, so it ends up weighing a lot for its size. The website says they have the T600 down to 2,500 pounds, but the first ones were around 3,000 pounds.

You should check out the patent docs for it, where the inventor describes the ballasting design. "The ballast may include dead weight for providing a desired rollover threshold when the batteries are not heavy enough, or when the motor is not an electric motor."

http://www.commutercars.com/patent/6328121.pdf

There seems to be a double-post glitch going on for me. Can someone clean out the double posts, please?

Thanks.

Never checked out the web site. Damm if it seems too good to be true...

You can bet at least that there will be much work done in the relm of electrics and hybrids. $3+ a gallon for motor fuel will drive that.

50+mpg all day at 70+mph (in MI speed limit is 70) with 4 people (3 adult size), AC, camping gear.

And 90% fewer emmisions than all other 2004's.

Its not just the money.

I bought a Scion XB last October. I figured out that the Scion would cost 10 cents a mile for gas and the Prius would cost 7.5 cents a mile for gas and 5 cents a mile for batteries for a total of 12.5 cents per mile.
And...the Prius cost $10,000 more than the Scion.

" 5 cents a mile for batteries"

Has anyone heard of any Prius owners replacing their batteries yet? One?

Ford, Honda and Toyota say that the batteries in hybrids are designed for the life of the car. They are under waranty for 8 years, but they should last over 15.

"Toyota's own tests have run batteries for the equivalent of 150,000 miles with no discernible degradation, and the company expects them to last the useful life of the car."

Link.

FYI, at current prices, gas costs for the Prius are 4.1 cents cheaper per mile at EPA ratings and 4.5 cents cheaper per mile at real-world ratings.

Also, the difference in price is not $10K, it's $3,745 after the tax credit. Simple breakeven is at about 91,000 miles.

Of course, you're sending more money to Japan and less to Saudi Arabia in the process, as well as having far lower emissions.

Lets also not forget that comparing the Prius to "similar non-hybrid cars" is all good on paper, but in the real world a lot of people are trading in much bigger and/or more expensive cars for the Prius (people with smaller and a lot less expensive cars might not have the money to buy one...). I remember a discussion on Priuschat.com (IIRC) where some people where talking about what they drove before they had a Prius, and many were driving Ford F150 pickups and minivans and mid-sized to big SUVs.

My wife and I bought our first car in 2000. I don't drive, so the car is really for my wife. However, I was the one that basically did the research and decided on the car. My first instinct was to buy a very small fuel efficient and affordable car. I ended up deciding on the Toyota Yaris. When I started doing extensive research on the Yaris, I noticed the Prius was just coming out in Japan. I got really hyped on the Prius. I did research and really seriously considered it. In the end, I decided it was simply too expensive compared to the Yaris and the fuel savings compared to the Yaris were not that great. I bought the Yaris with the intention of buying the Prius when it was time to change the Yaris. I love my Yaris. I don't want the Prius anymore. I want a PHEV Yaris with the ability to burn biodiesel and with PV on the shell (Spain is starting to produce a lot of biodiesel from olive waste, and I usually keep the car parked in the sun.) I hope some Toyota guy reads this and talks to his boss about it.

I bought a new Prius in 2002 for $19,000. I could have got a Corolla for less but the Prius is somewhat more comfortable so it was a good value to me.

At that time I was mostly driving in suburban traffic that's mostly full stop and then go really fast. It's very inefficient for a hybrid and I only got 35mpg in winter and 45 in summer.

My office moved and I have to drive 25 miles each way to work. Before that I took the train. Since I'm on the highway or in evenly slow city traffic, I average 40+mpg in winter and around 50 now that it's warm. It saves me over a gallon of gas a day compared to my old Saturn. I keep an eye on my milage and have learned to drive sensibly. This is key with any car.

It's a reliable car and I spend very little on maintenance. Regenerative braking really saves the brakes and I'm very pleased with it. I'm going to keep it at least until spring 2008 even though I could get around $15,000 for a trade in.

The new Prius is more expensive but larger with more bells and whistles. If you drive a lot, it's worth it. If you don't want to lay out the bucks, get a Corolla. They're also great cars.

My favorite thing is that the engine turns off at stoplights. Our air would be much cleaner if all cars could do this!

Thanks for sharing your experience, Sue.

Many interesting factors in what you say: winter vs summer is indeed a big factor on any vehicle. Winter gasoline has a different mix and that leads to lower mileage, plus it takes longer for the engine to reach peak operating temperature.

According to the database at GreenHybrid.com, your model of Prius (non-HSD) has an average of 45 mpg, so if you get around 50 in the summer and 40+ in the winter, you're doing well.

Another good point with the regenerative breaking saving wear on brakes; another factor is that the gasoline engine will more often keep revving around it's most efficient RPM and it is the CVT transmission and electric motors that will do the rest. That should mean less wear on the engine than constantly revving up and down.

Resale value is another good point. Some people who had pre-2004 Priuses like you and sold them in 2004 to get a new Prius got almost what they had paid for if not more for their car. Hard to beat.

The problem with these sort of comparisons is that they don't take into account the real purchase price difference between a Prius and a Corolla for example. A member of my family just recently bought the Corolla over the Prius because everyone wants sticker price or above and he could get the Corolla for invoice. And he wasn't forced to buy all the fancy shmancy stuff they put on the Prius to drive the price up. The price difference between the two ended up being way more than the $5k mentioned in the article.

Well, the Corolla's not a Prius either. The Prius is a mid-size like the Camry and the Corolla is a compact. Corolla is a sedan, Prius a liftback.

Hybrid cars have their own share of advantages and disadvantages. The price may be too high when you purchase one. But you get to save money because you need not spend that much on fuel.

But, if you have a hybrid or not, you can still save some of your cash if you do know how to drive your car well. After all, tips on how to drive well have been proven to be correct through the years.

The problem with these sort of comparisons is that they don't take into account the real purchase price difference between a Prius and a Corolla for example.

Ah, the old "Corolla Objection". One of the Classics.

A Corolla is a small car. The Prius is a midsize car. If you actually test drive both vehicles (including sitting in front and back), you wouldn't make this comparison.

We really should compile a list of the common red herrings - the "Corolla objection"; electrocuted emergency workers; blind people getting menaced by "silent death"; ridiculous price premium assumptions; faux concerns about the batteries' toxicity, recyclability, potential failure, replacement costs, etc; understating fuel efficiency improvement of hybrids; ignoring basic rules of finance when calculating economic rationality of purchase; focusing on economic rationality itself; ignoring HOV lane, parking, marketing, social approval, time, etc benefits. It's a very long list of nonsense.

When I was a driver, I did a quick comparison to my then vehicle and a hybrid to determine what was best.

My existing car was a 1993 full size Pontiac that got 20/26 miles per gallon winter and summer driving combined.

I paid about $1000 a year in maintance costs, tires, wipers brakes and engine repairs. The car it self cost $1000.

If a hybrid got 50 mpg to my 22 and the hybrid incurred NO additional ownership costs. My existing vehicle at would be cheaper to own and maintain for an additional decade if gas cost $6.80 a gallon.

I drove 4000 miles a year when I did.

The second criteron is that batteries are very bad for the environment. Lead acid batteries are the easier to manfacture but difficult to dispose of. Metalhydride are costly and manfacture and hard to dispose of. No reusability on expired batteries coupled with no pratical way to recycle the batteries means they will wind up broken in junkyards by the million.

Hybrids have the manfacturing foot print of existing vehicles along with battery.

The world is better off if you drive a small car and drive it less.

I was better off not driving at all.

"The second criteron is that batteries are very bad for the environment. Lead acid batteries are the easier to manfacture but difficult to dispose of. Metalhydride are costly and manfacture and hard to dispose of. No reusability on expired batteries coupled with no pratical way to recycle the batteries means they will wind up broken in junkyards by the million."

Sorry, but that's simply not true.

See this.

Joe S-

Well, if you have a really cheap car, don't drive much, and don't spend much for upkeep of the vehicle -- then it's going to be cheaper than pretty much any car, not just hybrids.

As someone who has cars older than yours, drives fewer miles, and puts less money into upkeep, I can understand where you're coming from.

The problem with the analysis is that insurance is essentially a fixed cost, regardless of how old or cheap the vehicle is. Per mile I believe our insurance constitutes at least 80% of my costs and in one year exceeds the purchase cost of our two vehicles.

One also has to value one's time. The older a car gets, the more time it takes to keep it running and looking well. What one saves in straight economic opportunity costs (by not having car payments) is balanced by the opportunity costs of one's time. And the more valuable one's t