Sunday, May 2, 2010

The real cost benefit of hybrids

LeftLaneNews.com is an automobile publication I refer to and read quite often.  Although the site itself is owned by a large online lead generation company, it still provides some very useful information about the automobile space.  One research they did that was especially impressive was their "head-to-head" comparison of the cost benefit analysis of hybrids and their comparable pure gas only powered competitors.


Many comparisons are unfair because hybrids, for lack of better words, are still positioned by many auto manufacturers as more "premium" cars, and many would offer options that otherwise more economical vehicles ("econo boxes") would not.  For example, I personally would not compare a Toyota Prius with a Toyota Yaris because the Prius is offered with a lot of gadget, luxury features, and other options that are just plainly not available on the Yaris (i.e. back up camera). In addition, many times there is a significant size differential as well.

After taking all of those into account, here would be the best comparison I have seen to date.


The data
Ford Fusion SEL with Package 301A, Decklid spoiler, Reverse sensing system, $26,865
Average MPG: 25
Annual Fuel Cost: $1,710
Ford Fusion Hybrid with Package 501A, Leather trim, $31,460
Average MPG: 39
Annual Fuel Cost: $1,094
MSRP Difference: $4,595
Annual Fuel Cost Difference: $616
Years to Pay Off Hybrid: 7.5
Honda Civic LX-S, $19,005
Average MPG: 29
Annual Fuel Cost: $1,475
Honda Civic Hybrid, $24,510
Average MPG: 42
Annual Fuel Cost: $1,017
MSRP Difference: $5,505
Annual Fuel Cost Difference: $458
Years to Pay Off Hybrid: 12
Honda Fit with Keyless entry, $16,560
Average MPG: 31
Annual Fuel Cost: $1,381
Honda Insight LX, $20,510
Average MPG: 41
Annual Fuel Cost: $1,043
MSRP Difference: $3,950
Annual Fuel Cost Difference: $338
Years to Pay Off Hybrid: 11.7
Mercury Milan Premier with Package 202A, $26,720
Average MPG: 25
Annual Fuel Cost: $1,710
Mercury Milan Hybrid with Package 300A, $31,980
Average MPG: 39
Annual Fuel Cost: $1,094
MSRP Difference: $5,260
Annual Fuel Cost Difference: $616
Years to Pay Off Hybrid: 8.5
Nissan Altima 2.5S with splash guards, $22,715
Average MPG: 27
Annual Fuel Cost: $1,582
Nissan Altima Hybrid, $26,780
Average MPG: 34
Annual Fuel Cost: $1,257
MSRP Difference: $4,065
Annual Fuel Cost Difference: $325
Years to Pay Off Hybrid: 12.5
Toyota Camry LE with Extra Value Package, $23,035
Average MPG: 26
Annual Fuel Cost: $1,646
Toyota Camry Hybrid, $27,657
Average MPG: 34
Annual Fuel Cost: $1,257
MSRP Difference: $4,640
Annual Fuel Cost Difference: $389
Years to Pay Off Hybrid: 11.9
Toyota Matrix 1.8 with Power Package III, $20,210
Average MPG: 28
Annual Fuel Cost: $1,526
Toyota Prius II, $23,550
Average MPG: 50
Annual Fuel Cost: $855
MSRP Difference: $3,340
Annual Fuel Cost Difference: $671
Years to Pay Off Hybrid: 5
Volkswagen Jetta SE, $22,400
Average MPG: 25
Annual Fuel Cost: $1,710
Volkswagen Jetta TDI with Moonroof, $25,680
Average MPG: 34
Annual Fuel Cost: $1,358
MSRP Difference: $3,280
Annual Fuel Cost Difference:$352
Years to Pay Off Diesel: 9.3

Source.

Long story short, at the current prevailing gas prices, it will take you at least 5-years of hybrid ownership to break even on the premium you paid for the hybrid (and some as high as 12-years).  Not to mention that most individuals I know usually won't own a vehicle past the 5-year period, you also have to consider most Ni-Cad and Li-Ion batteries frankly just won't keep their charge much after 7-10 years.  With those considerations in mind, people who are buying hybrids are really doing it for other benefits, such as the carpool lane sticker, or just plainly wanting to give off the impression that they are doing their part to help the environment.  This perception is really what is helping to sell these hybrid vehicles like hotcakes.  In reality, even the resources needed  to mine the minerals for the batteries pretty much even out any benefits your hybrid would have given back.

So this leaves me with another question.  Besides a really amazing marketing campaign, what is really the point of hybrids?

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