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Sometimes a hybrid is cheaper

Posted Jul 10 2009, 07:26 PM by Karen Datko
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When an ever-vigilant MSN Money editor alerted us to a story about how hybrid cars can save you money, our immediate thought was, Say what?

In fact, we had a post here this week from our friend Jim Wang of Bargaineering, who called the decision to buy a Prius an "emotional" one. Jim compared the purchase price of Toyota's popular hybrid with the Smart Fortwo. The Prius gets slightly better gas mileage but costs $22,000 or more. The price of the tiny Fortwo is $10,000 less.

However, the Prius wins the frugality race hands down depending on what cars you compare it with and what car expenses you consider, says a story at MarketWatch called "Study shows significant savings in alt-fuel cars." This is worth reading, and so is the study (.pdf file).

Auto industry research Web site IntelliChoice.com studied the cost savings of various 2009 hybrid and clean diesel cars and SUVs versus comparable models that run solely on gas. The story said:

Of the 51 alternative-fuel cars and trucks tested, 35 delivered cash savings over a five-year period when taking into account several factors such as maintenance, repairs and retained value. In some cases, the savings were huge.

The story provides several examples, including this: The Prius costs $1,805 more than the Camry, but the five-year savings with the Prius is almost $5,000. Some hybrid sedans and SUVs didn't do as well.

Also this: Some cars with clean diesel technology outperformed hybrids in the study.

Related reading:

Buying a Prius is an emotional decision

Toyota gains upper hand with Prius

Should you buy a used hybrid?

Danger ahead for ‘new GM'

Comments

 

Does anyone know how much it costs to replace those beautiful little (okay, not little) batteries in these cars when it's time to be replaced???  I have talked to someone who's friend bought a Honda Civic Hybrid some years ago for I think a little over $40,000.00 compared to a regular Civic which was running about $16,000.00 at the time, well, when it was time to replace the batteries, the bill came out over $8,000.00!!!  Yup, that's right folks, $8,000.00...so where was the savings in that...

$48,000.00 - $16,000.00 is $32,000.00 - think about how long it would take you to go through $32,000.00 worth of gas...if you used $200.00 a month on gas it would take you 12.8 years to get to $32,000.00  (I think the batteries had to be replaced after 6 or 7 years of owning the car).  

Now, I'm sure or at least I hope that the price of the batteries have come down since then because if not...what's the point in buying a $40,000.00 CIVIC not an Accord - A CIVIC!!! -Geez, go get a BMW or something...

As for me, I'll stick with my 20 year old Nissan 240SX with 260,000 miles and hardly a problem...(I think I may have spent about $5,000.00 or less in repairs in 20 YEARS)

Yay!!!  I love my car - love it love it LOVE IT.

Oh and it still gets between 25 & 29 MPG - for a 2.4 Liter 20 YEAR OLD car, that's fantastic!!!

Please show me the math where a Prius will save $5000 over five years even though it costs almost $2000 more than a Camry.   Maybe if you pay cash for the vehicle, but if you have to finance, in terms of money, the hybrids are real losers.   Consider a Camry for $20K and a Prius for $22K.  Assuming you have good credit and finance 100% of the purchase at 5% for 48 months, and gas is $3/gallon @ 12K miles/year with the prius getting 15MPG better, the savings in gas you get with the Prius is essentially negated by the additional $46/month your loan payment would be for the Prius.  If you assume repair and insurance to be about equal for both cars, the Prius will cost you about $50 more to own over the life of the loan, or to put it another way, it will take you about 49 months of driving a Prius to break even with owning a Camry.  In order to realize $5000 in savings with the Prius, you will have to drive it for nine more years after the loan is paid off!   Okay, I know gas prices go up, so I will be generous and say that it will take you about TEN (and not five) years of driving a prius to see $5000 in savings over owning a Camry for the same amount of time.   However, this is comparing apples to oranges.   There are low price gasoline cars that are more than $2000 less than a Prius and get only 5 to 10MPG less.  If you compare a Prius to a Civic or Corolla, the Prius makes absoultely no financial sense at all.

Hybrids will not be a viable option unless: The price comes down.  The MPG is at least 20 better than the most fuel efficient gasoline engine.  Gas costs over $5/gallon.  You paid cash, or you are the type of person who buys a new car and drives it until it dies.

You really can not compare the Prius to another car- there are too many differences for the numbers to make sense.

But you can with a Honda Civic Hybrid since it is exactly the same as a Civic but it is a Hybrid.  I have a 3 year old Honda Civic Hybrid with 90K miles on it.  It costed about 2K more then a similiarly equiped Civic.  But, in CT there is no sales tax on cars with EPA rating over 40mpg.  That is a $1,200 saving right from the start for a balance of about $800.  I am averaging 46 mpg over the 90K.  That is about 25% better milage than the non-hybrid Civic.  That is about 500 gallons of savings over 90K miles or about $1,250 @ $2.5/gal.  

Let us look at todays costs of different fuels by energy content of BTUs for cars and their engine efficiency. Gasoline at $2.50 a gallon with energy content of 130,000 BTU for $20 per million BTU with a 20% engine efficiency. Compressed natural gas at $3.35 per million BTU with a 25% engine efficiency. Residential electrioity at $100 for 1000 KWH with a energy content of 3.4 million BTU or $30 per million BTU with a 90% engine efficiency. Obviously Pickens proposal to fuel cars with comptressed natural gas is the most economical solution. There have been commercial fleets of trucks powered by natural gas for years with proven technology. The cost of converting a gas engine to run on natural gas is $1500 for a 300,000 mile engine life. Electric cars have to replace the batteries after 100,000 miles for a $3000 cost. Only Honda manufactures the Civic that is fueled by compressed natural gas, With electric cars both the auto manufactures and electric power companies will make high profits. Obviosly Obama Motors with the enviromental zealots will lead this nation into financial ruin.

IntelliChoice study only looks at traditional gasoline, hybrid and European diesel cars. Why was not the Honda Civic that is fueled by compressed natural gas not evaluated. Todays natural gas prices are $3.35 with a energy content of a million BTU and a engine efficiency of 25%. Gasoline costs $2.50 a gallon with a energy content of 130,000 BTU or $20 a million BTU with a engine efficiency of 20%. Residential electricity cost of $100 for 1000 KWH with a energy content of 3.4 million BTU or $30 a million BTU and a engine efficiency of 90%. It would only cost $1500 to convert a gasoline engine to use compressed natural gas. There would be no high profits for auto manufactures and electric power companies.

Interestingly no one mentions the cost of maintinence nor the cost of replacing the batteries in one of these vehicles. they will get older at some point. It is also true that manufacture of the hybrids does require chemicals that we wouldn't necessarily want to come in contact with and the amount of energy in the manufacturing process is not worth the benefit. I do think that mileage can still be increased on standard more simpler vehicles.  Pure electric vehicles are not a bad idea, especially for shorter trips. However, the way utility companies are raising the cost of energy this may not be affordable in the near future either. Then, how will the gov get the road tax? GOV wants money.

Last I checked it was about $8000 to convert to using natural gas.  How much energy does the u.s. military waste every year?  Hybrids are a marketing ploy, ultimately the goal is to persuade people to buy a new vehicle.  At $5.00/gal, better mileage is critically important, but can be achieved more cheaply than buying a new car.  I was very impressed by the company that makes a retrofit hybrid system that bolts on under the hood.  I wish the govt would throw some money their way.

I own a Prius and did lots of homework first.  Some folks here obviously know  little about the car and ought to ckeck their facts further. (1) The cabin is about the same size as a Fusion or Camry, but it has a larger fold down storage area. It's plenty roomy. It's a sub-compact, but your shouldn't expect SUV-size in a smaller car anyway. The headroom is great. (2) The car cost 22k, but I got a 700 dollar credit.  It was cheaper than a Fusion, less than a Camry or Accord, and 2k more than a Civic, which is smaller.  Mileage averages 43 city/ 56 hiway. It' a lot better than 28MPG Focus.. and will save me about 1k/year at current prices (2.75/gal). More if prices spike.  (3) It's 2 years old.  My total maintenance and repairs have averaged $250/ yr  ...and that's with new tires! (4) The plant in Japan is quite green.  So is Ford's hybrid Fusion plant, BTW. Data cited here is eroneous at best; certainly out of date. (5)  It's a good car with a solid safety record.  Look it up!(6)  Would have bought American -- always have until this car, but the Big 3 did not produce hybrid cars (only SUVs) until very recently.  The hybrid Fusion, which gets great write-ups,  just was not available two years ago.  The Malibu was way too costly...and had no track record. Next one will be a Ford...but that's years off.  Bottom line:  it will pay for itself if you are patient and keep your cars for many years as I do.  I would not recommend buying a new car in any case if you do not have at least 6 months of savings in an emegency fund and  have to finance.  Paying cash on a good used car (4-5 years old) will save you the most money.

A prius costs about $7000 more than a Honda Fit. The Fit gets 35mpg to the Prius' 50. With gas at $3.50 per gallon, you'd have to drive over 200,000 miles to save the $7000 difference in price.

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