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Is Buying a Hybrid a ‘Penny-Wise’ Decision?

May 18, 2018 • Jesse Herrin • Tags:

You know when a solicitor or salesman approaches you and tries to use the sneakiest tactics to make you believe their product is the best on the market and you won’t regret it?  After taking their bait, you purchase what they just advertised to you and find out a few weeks later that you got ripped-off.  You can’t return the product at the full price it was purchased at because you have already used it.

Checkmate! You have been taken advantage of by that salesman. (Or as the youngsters like to call it: “You got served!”)

Similarly, when a hybrid car is being advertised as a “money saver”, are you really going to save money?   

Well let’s put on our reading glasses (prescription or non-prescription) and find out!

 

Car Price

A hybrid vehicle could cost as much as 20% more than a conventional gas engine vehicle, as per Edmunds.com.  Because of the technology and build of a hybrid, you will pay a premium price for the vehicle.  As a modern example, a brand new 2018 Toyota Camry LE is priced at $24,000 with 18/39 mpg, while a new Toyota Camry Hybrid LE is priced at $27,800 with 51/53 mpg, as of April 27, 2018 on the Toyota website.  You are essentially paying roughly $3,800 more for the hybrid, so you must ask yourself the question: “Will the gas money I save driving the hybrid outweigh the additional $3,800 I am paying to purchase the car? 

There are many more factors which should go into your decision that we will touch on as you continue reading.

 

Gas Prices

Woman filling up gasBased on the national gas price averages given by AAA Gas Prices, the price as of May 18, 2018 is at $2.91, and the price a year ago was $2.33.  As you can see, gas prices are sporadic; they change daily and cannot be accurately predicted.  Despite this, gas prices are really not that high today, but that could also change at any moment.  According to this article from Forbes, gas prices are expected to rise this year, but nobody knows exactly by how much. 

Purchasing a hybrid vehicle essentially gives you peace of mind by shielding you from any of these drastic changes in gas prices. (Think Captain America using his shield against any new weapon the Black Order uses against him from Avengers: Infinity War.)

 

Insurance

We all know how great of a driver you are—precision steering, smooth stops, attention to traffic, a cautious personality to follow the law while driving, and of course, NO TICKETS, right?  So why do I need car insurance if I can handle a car better than Paul Walker in the Fast and the Furious movies?!

Every state in the United States has some form of minimum auto insurance law. (I promise I did not mean to burst your bubble!  Unfortunately, this blog post does not hold any power over those darn laws, so the majority of us still need to get car insurance — bummer!)

Nerdwallet.com has an article about comparing car insurance quotes for gas and hybrid vehicles.  Based on the numbers, the average hybrid costs an average of 7% more to insure than a conventional gas-powered car.

As a rule of thumb, the more expensive your vehicle is, the more it will cost to insure it.  And because hybrid vehicles are priced as a premium, they will typically always be more expensive than their conventional counterpart.

 

Driving Habits

How far is your commute to work?  Do you travel often by car when vacationing?  These are important questions to ask yourself before deciding to make an investment towards a hybrid vehicle.  Using a helpful tool from fueleconomy.com’s website, you can compare hybrid vehicles with their closest conventional gas choice and see how long it takes you to make up the difference of paying a premium price for a hybrid as the table below shows:

Hybrid

Gas

Payback Period

2018 Ford Fusion Hybrid SE

$26,340

2018 Ford Fusion FWD SE

$23,490

4.3 years

2018 Honda Accord Hybrid EX

$29,780

2018 Honda Accord EX

$28,360

3.8 years

2018 Toyota Prius Two

$25,580

2018 Toyota Camry

$24,439

2.7 years

2018 Chevrolet Malibu Hybrid

$28,795

2018 Chevrolet Malibu

$26,095

5.6 years

 

 

 

 

 

 

 

 

 

 

 

As presented on the table, some hybrid choices take significantly less time to make up the difference than others.  What the table does not show, however, are miles driven and gas prices.  The average American, based on data from the U.S. Department of Transportation, drives roughly 13,476 miles per year.  If you consistently drive more than 15,000 miles per year, and gas prices go up, then it will, of course, take you much less time to make up the difference. 

 

Maintenance & Repairs

Remember when the Microsoft Xbox 360 was all the rage back in the mid-2000’s? (Wow—we are old!)  Gamers would spend countless hours playing popular titles such as Halo, Assassin’s CreedTesting engine and Call of Duty.  But, in the midst of all the frolic joystick maneuvering, skillful trigger pulling and swift button-pressing, the dreaded “Red Ring of Death” would occasionally pop up into your system from overuse and devour a number of Xbox 360 systems, leaving its users helpless with no other option other than to fork over a sum of money to have it fixed.

Likewise, cars will also have the occasional mishap (e.g., engine, transmission, air conditioner, tires) that will require you to spend money to get it fixed.  Because of the amount of technology, particularly the battery inside a hybrid vehicle, you can expect to pay a bit more for repairs and maintenance if anything does happen.  It has been estimated that the cost to replace a hybrid battery can range from $1,200-$5,000, not including the potential cost of parts and labor.

“HOWEVVVAH!” (ESPN’s Stephen A. Smith voice)

According to Edmunds.com, hybrid vehicles could actually save you money through repairs because they need very little work over the course of their lifetime.  On the off chance your vehicle does start to have problems, rest assured, because all hybrid-specific mechanisms in a vehicle are covered under warranty for eight years/100,000 miles or 10 years/150,000 miles depending on the state where you reside.  Not only that, the price of hybrid batteries is dropping due to volume increases in the production of hybrid vehicles.

 

You Are the Boss

Purchasing a hybrid vehicle should be based upon each individual’s needs, predominantly those who drive a lot and have to rack up those miles.  These are some helpful tips for you to consider before you make the investment into buying a hybrid car.  How beneficial (or non-beneficial) will this be towards your life?  You are the boss!  Go out there and change the world!  (Well, maybe not the world, but you get what I’m saying.)