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New Study Looks At Illusive Break-Even Costs For Hybrids

 
1,658 views Mar 15, 2011
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2010 Toyota Prius

2010 Toyota Prius

With fuel prices continuing to edge higher, the cost benefit of fuel saving hybrid and diesel vehicles are now more important than ever. We recently looked at why mainstream automakers in the U.S. refuse to launch more fuel efficient diesel models locally, and now we have details of a new study that’s looked into the often mystifying break-even costs of hybrid vehicles.

For the uninitiated, the break-even cost for a hybrid vehicle is essentially the amount of time it would take to cover the cost premium of the hybrid vehicle over a comparable gas-only model, assuming a given price for gas and the number of miles driven each year. What makes the task so complicated is that the price of gas can fluctuate quite dramatically, as we’ve seen over the past couple of years.   

The guys over at CarGurus have now looked at 43 hybrids from model years 2003 to 2010 and calculated their average cost premiums to be around $6,400 over a comparable gasoline model--or about 17 percent. The study found that for some hybrid models, gas prices would need to be around $7 per gallon before it would be cost effective to purchase over their gas-only equivalents.

Mercedes S400 Hybrid

Mercedes S400 Hybrid

The results are hardly shocking as we’ve known for a long time that hybrid vehicles are often not the solution for motorists looking to save money. In fact, there are several studies with contradictory results including one that found only one hybrid vehicle currently on sale that’s worth buying if you’re looking to save money on gas bills--the Mercedes-Benz S400 Hybrid. 

If such is the case, then why do so many people buy hybrids? It’s true that the large majority of people buying hybrids are looking to save money but sadly, it’s often the case that they would be better off buying a regular model or even a diesel. However, there are also a lot of buyers that flock to hybrid vehicles not to save money but rather for the image of being ‘green’.

[CarGurus via Detroit Free Press]

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Comments (7)

  1. fb_1001015277 avatar John Briggs Posted: 3/15/2011 7:11am PDT

    Another useless study. What idiot suggests that a very expensive Mercedes hybrid is good for people who want to save money. Also, it is clear that the price of the car is not related to the cost of building it. Mercedes decided to price these cars the same for business reasons.
    And how tone deaf is the author. The only listed possible reasons for getting a hybrid is "saving money" or "having a green image." It should be clear to the author that cars like the Prius are actually cleaner. Not just an image of green but actually green. There are real world problems associated with gasoline consumption that are mitigated by using less. It would be worth a mention in such an article.
    Furthermore, the price of the Prius is well in line with the cost of other vehicles and definitely less expensive than the Mercedes.
     
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  2. Damien Thomas avatar Damien Thomas Posted: 3/15/2011 8:15am PDT

    @John Briggs,
    I think you fail to understand why this article and the previous one mentions the Mercedes S400. It's not because this is a car hybrid buyers should buy to saving money, it's to point out that the market is such that the only hybrid out there that will save you money in the long run is a huge Merc costing a ton of cash in the first place.
     
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  3. fb_1001015277 avatar John Briggs Posted: 3/15/2011 9:34am PDT

    @Damien Thomas,
    The pricing of the Merc provides nothing. It has nothing to do with cost or technology or where it is effective. The pricing of the Merc is arbitrary because there is enough gross margin in these vehicles to cover the cost of the hybrid system in the markup alone.
     
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  4. fb_1001015277 avatar John Briggs Posted: 3/15/2011 9:41am PDT

    In addition, the type of customer that buys a 19 MPG Merc hybrid and the type of customer that buys a 51 MPG Prius are not likely to be motivated by the same factors.
    The Merc is still a gas guzzler.
     
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  5. fb_1001015277 avatar John Briggs Posted: 3/15/2011 9:58am PDT

    What really gets to me is that the BCAA study is clearly focused on how to reduce GHG emissions and recommends the Prius as being the most environmenatally friendly.
    Green Car Reports apparently stopped reading the article after the first paragraph where it says the Merc was the only one to pay back. This represent horrible irresponsible journalism as latter paragraphs clearly focus on the Prius and other low GHG emitting vehicles.
    The BCAA is trying to get people to lower GHG emissions, what is the Green Car Reports trying to accomplish with this article?
     
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  6. fb_1001015277 avatar John Briggs Posted: 3/15/2011 10:01am PDT

    The BCAA sums up their conclusion this way . “We believe that many consumers are willing to pay a bit more to go ‘hybrid’ if it will reduce their carbon footprint.”
    The didn't say that customers are looking for "payback". They didn't say that customers are looking to have a green image. They said that customers are looking to reduce GHG emissions.
     
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  7. fb_1076225905 avatar Scott Simkover Posted: 3/15/2011 5:04pm PDT

    Though it might take 5 yrs to pay off the Prius PHEV conversion I did...I feel good about it daily. No regrets! www.smilingdogsranch.com/priusblog
     
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