Hybrid Cars Save You Money: True or False

Natalie Josef
September 21, 2010

When it comes to just about anything, people want to save money, and if we can save the environment along with money, all the better. While people buy hybrids for many reasons (they pollute less, buying one helps support new technology, you can sleep better at night), one reason many people purchase hybrids is because they save money. But do they really?

The original price?
Unfortunately, the initial sticker price will almost always be higher on a hybrid than its traditional cousin. Take the Honda Civic for example—the basic hybrid starts at around $22,000, while the regular Civic starts at around $15,000. You would have to load up the regular Civic with tons of options just to reach the starting price for the most basic hybrid.

One good thing is that the IRS has determined that some hybrids qualify for a one-time tax credit that can range anywhere from $1500 to $3000. However, there are limitations. The vehicle must be purchased on or before 12/31/10 and it only applies to new vehicles and their original owners.

Toyota and Honda hybrids no longer qualify for tax credits at all. Why? Because the most popular models lose their tax advantage quicker than poorer selling models. If that sounds a bit counterproductive, remember that one of the reasons Congress passed these laws in the first place was to help American manufacturers keep up with Japanese hybrid technology. The IRS website has a list of cars that still qualify for 2010.

Save gas?
When determining how much gas a vehicle uses, you must take into account how the car is driven—highway versus city driving; occasional versus frequent use; terrain and load also make a difference.

If you drove a Civic Hybrid 15,000 city miles a year at $1.75 a gallon, you would save about $250 in gas each year. To offset the difference in the original sticker price, you would have to drive that car for almost fifteen years. Once source I found said that if everyone drove a hybrid, gas consumption would only decrease by about 10 percent.

Repair costs?
Hybrids have fewer moving parts, which is good news, but those parts are very expensive. Plus, the mechanics who work on hybrids must have special training and the cost of that will be factored into what you pay in labor costs.

An important factor to consider is the warranty—basically, the longer the better. The basic warranties cover everything for about eight years or 100,000 miles. If you are buying your hybrid used, take into consideration that the vehicle may almost be out of warranty.

“People figure they save a lot of money in gas driving a Prius—and they can. But the savings will be gone if something breaks out of warranty,” says Mike Helm, a technician at Downtown Toyota in Oakland, CA. “Inverter, tranny, battery—they all cost five thousand bucks to replace.”

The bottom line?
Everyone wants to save money, but that may not be the only—or even the main—reason why people buy hybrids. Many folks simply want to lesson their environmental footprint—and that’s worth its weight in gold. Anything worth doing is bound to be hard and that includes saving the environment.


Natalie Josef

About the Author

Natalie Josef is an automotive expert at RepairPal, the leading online source of auto repair resources and estimates. With many ASE Master certified mechanics on staff who have decades of experience, RepairPal knows all the fine points of car repair.

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