got an extra $ 22,000 lying around, so you can go out and buy a Toyota Prius? This is what the basic model costs in the new year. This is not a king ransom but it is not cheap either. So it's bound to be wondering if a hybrid car is really worth the expense.
This is where you have to do a little math.
Let's say that your hybrid car (is it a Prius or something else) you will save about $ 250 a year in petrol prices due to improved gas mileage. It is not unreasonable to guess if you drive something like 15,000 miles a year, gas cost around two U.S. dollars a gallon.
and say its a hybrid cost you about $ 3,000 more than comparably equipped non-hybrid sedan from the same automaker.
Now, a simple division gives you a way to assess whether you are actually saving money. Divide the $ 3,000 difference in price from $ 250, you can save on gas each year to get a number of years before you actually start saving money. In this example, it was twelve years old.
Yep, you'd have to save $ 250 annually for more than ten years to make up for the difference in price when you buy a hybrid. Most people do not keep their cars that long, so their "investment" in the hybrid never worth it.
But what if gas is ridiculously expensive? Let's say it goes back to nearly five U.S. dollars a gallon, that would probably over time. Now let's do the math again ...
We have the same $ 3,000 difference in price we have to overcome before you actually start saving money. But our gas savings is probably closer to $ 625 a year, because gas is two and a half times more expensive in this scenario. The result?
You'd have to drive their hybrid for almost five years before you start saving money. And people usually do not keep their cars that long either!
So, based only on the difference in price and gas prices, hybrids do not usually save most customers money. It's not the whole story, though.
2006 Study Intellichoice calculated savings of hybrids on the basis of the total cost of ownership for the vehicle. This means that depreciation, financing costs, fuel, repairs, maintenance and fees. They note a few facts about hybrids:
When you add it all up, they showed that the hybrids do indeed have a lower total cost of ownership than non-hybrids. ($ 2,000 federal Clean Fuel Vehicle Deduction is not around anymore, so it's not worth thinking about .)
The hybrid will save you money? Or ask another way, it is worth the extra cost? It's definitely maybe. If you're looking to save on gas pump itself, probably not. But you probably can not justify buying a hybrid car, if you take into account the total cost of ownership over five years. The choice is yours. Now you know how to calculate costs and savings with hybrid cars.
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