Why Hybrid-Car-Mania Doesn't Always Make Financial Sense
So fuel prices have finally convinced you to ditch that 20mpg pig that you’ve been driving. Many of us are (or were) in that same boat. I recently traded my 2001 Chrysler 300M (which averaged about 22mpg for me) for a 2008 Honda Civic. I’ve only put about 1,500 miles on the Civic, but so far it’s averaging just under 40mpg for me (you can view my mileage log book online at MPGTune.com).
If we assume that you drive 12,000 miles per year and gas averages $4.08 a gallon, that means your 20mpg car is going to cost you $2,448 in fuel for the year. If you double your miles per gallon you’ll cut your fuel costs in half, which is great.
Gas price/gallon: $4.08
| MPG | Gallons | Fuel Cost |
|---|---|---|
| 10 | 1,200 | $4,896 |
| 15 | 800 | $3,264 |
| 20 | 600 | $2,448 |
| 25 | 480 | $1,958 |
| 30 | 400 | $1,632 |
| 35 | 343 | $1,399 |
| 40 | 300 | $1,224 |
| 45 | 267 | $1,088 |
| 50 | 240 | $979 |
So if getting 40mpg from my Civic is good, isn’t getting 50mpg from a Civic Hybrid or Prius even better? The answer is “it depends”. Are you trying to save money, or is saving gas your only goal? If you’re trying to save gas then absolutely. Assuming you get 50mpg from your hybrid you’ll save 60 gallons of gas every year over the same car in a non-hybrid model.
But what if your goal is saving money? That 20mpg car will chug down 600 gallons of gas over the year, so the 40mpg car will only use 300. That 50mpg car? It uses 240. So going from your 20mpg car to the 40mpg car saves you $2,448. Going that extra bit to the hybrid only adds $244.80 in savings.
Considering the Civic LX lists for $17,760 with an automatic and the Civic Hybrid lists for $22,600 (that’s $4,840 difference) that $244.80 a year in gas savings starts to look pretty paltry. If you take out a five year loan on your vehicle you’ll pay about four times more in extra payments than you will be saving in gas.
So eventually you’ll be saving money with that hybrid, right? After eight, ten, maybe more years the gas savings will have caught up to the extra cost of the vehicle. Sure, if you ignore the fact that you’ll likely need to replace the very expensive batteries in your hybrid before that break even point occurs.
So if you want to save the environment, or save the ozone, or save any number of other things by all means buy a hybrid. Just don’t do it to save money. You probably won’t.
