How long will it take you to recover the extra money you pay for a hybrid?
There are multiple reasons why people buy hybrid vehicles. Some buy them because they want to appear to care about the environment, others want to reduce their country's dependence on foreign oil. Still others just want to reduce their operating costs. Of course saving money on fuel means having to spend some extra cash up front (or at least finance more) to cover the cost of the extra hardware that's necessary to drive the vehicle on electrons.
While those that are in it strictly for the environmental benefit may not care about return on investment, others may want to know how long it will take to save enough gas to pay for the hybrid system. For those drivers, CNN-Money has done some calculations on payback time for thirteen currently available hybrid vehicles. They figured the price premium based on a similar non-hybrid model, gas at $3.10 /gallon and 15,000 miles per year of driving. Since the Prius doesn't have a conventional equivalent, they used the four cylinder Camry which has the same interior volume. The Prius came out on top of the list with a 4.2 year payback followed by the new Chevy Malibu Hybrid at 4.6 years. Not surprisingly, the $104,000 Lexus LS600h took somewhat longer to recover its premium. With estimated annual gas savings of 1 gallon it would take 3,771 years to save enough to cover the difference from an LS460.
[Source: CNN-Money]
Reader Comments (Page 1 of 2)
wmorin 8:32PM (12/02/2007)
I would like to know how this translate for the Tesla, and other electric cars .. Of course I'm not talking about hybrids ...
Specially if you factor -- how long the life expectancy is suppose to be ( we can say the tesla is good for life .. aka 25 years .. Which i doubt) maybe 15 years?
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psarhjinian 8:33PM (12/02/2007)
Count me into the "don't care" section. I'd buy a car that cost more to operate, as long as the environment impact was lower.
I'd own a hybrid now, if the up-front cost wasn't so high on the Prius or the Civic had useful trunk space.
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Sam Abuelsamid 8:50PM (12/02/2007)
If you use the Lotus Elise as the basis for comparison against the Tesla roadster, the numbers come out as follows. The Elise is 23 mpg combined. At 15,000 miles per year (highly unlikely for either the Elise or the Roadster) and $3.10 /gallon, the annual operating cost would be $2,022 for the Elise. The Elise has a base price of $46,270 while the Roadster is $98,000 a premium of $51,730. Neglecting the cost of electricity for charging the Tesla the pay back time would be 25.6 years. If the cost of charging is factored in, the payback time goes way up. Clearly it would be foolish to buy a Tesla roadster to save money. You buy a Tesla to get a great sports car that doesn't have any direct emissions.
The battery is spec'd for 100,000 miles (about 500 full charge cycles)
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Chris M 9:37PM (12/02/2007)
There are a lot of factors that can influence the payback time, some of which they didn't take into account. Along with the annual miles driven and the future fuel costs (both of which could be much greater than estimated), there are maintenance costs and depreciation. Older model Priuses have been requiring less maintenance and much less depreciation, both of which leads to a quicker payback.
For some hybrid drivers, there wasn't a "hybrid premium", the car cost what they expected for the features and performance they got.
Consumers Reports once again rated the Prius as the car more drivers would buy again.
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Joseph 12:03AM (12/03/2007)
This online hybrid cost ranking things said this abotu the Honda Civic Hybrids:
"Overall mpg vs. non-hybrid: 43.3 vs. 32.3"
Oh my goodness...what idiots make these articles?
They're comparing 2008 mpg ratings for the hybrid to the 2007 ratings for the regular version.
These are the kind of flaws upon which people form very stubborn opinions. The inaccuracy of the media is near sickening.
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Sam Abuelsamid 9:49PM (12/02/2007)
Chris, it did say right in the original article that the payback time would vary depending on mileage and fuel costs. To do kind of analysis like this requires making some assumptions. You could do run all kinds of combinations and get various results but the relative differences between the vehicles would probably be similar.
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Tony Belding 9:51PM (12/02/2007)
The Lotus Elise and Tesla Roadster may not be a good comparison, since they fall into different performance classes. A better comparison might be a Tesla Roadster and a Lamborghini Gallardo. These have similar 0-60 MPH times. . . Gallardo obviously has a higher top speed, but the Roadster is a few hundred pounds lighter and therefore should handle better. . .
However, the Gallardo starts at $180,000 and gets 10-11 MPG city, 17 MPG highway. On premium gas.
The other thing to remember is that most people don't buy these cars to save money. They buy them to show everyone how much they can spend. So in that respect the Gallardo wins easily. :/
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Sam Abuelsamid 9:56PM (12/02/2007)
I chose the Elise because the Tesla Roadster is based on the Elise platform. The cars are similar in size although the Tesla is a bit quicker. The Elise is about 650 lbs lighter due to the battery pack.
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Dad 11:09PM (12/02/2007)
I think comparing the Prius to the Camry is lame. The Camry to Camry is a better choice. 4.2 yrs. for Prius vs 4.8 yrs. for the Camry? Let us say 4.5 years to break even?
4 1/2 years to break even? Then you start saving $543 year. After 4 ½ years. So in 5 ½ years you have saved $543. Or in 2007 days, you save $0.27 dollars or 27 cents a day! The tax on a gallon of fuel can be 30 cents a gallon. Cripes!!!! What am I missing? In 8 years (the day the battery warranty ends) you will have saved 3.5 years x $543 dollars per year = $1900.50 divided by 2920 days = 65 cents a day!!!!!!!!!!!!!!! Will somebody tell me how this makes any sense at all? Then, just for grins, assume the battery pack needs work, maybe replacement at the end of 8 years. Assume the darn thing can be replaced for $1900 dollars. Now you have saved nothing. There is no logic to hybrids like the Prius unless they are taxi cabs driven in stop and go traffic. Most of the folks I know in the Midwest drive the bloody things on the freeway. All they are doing is towing around hundreds of pounds of batteries. If they would car pool with one person a week in a non-hybrid, the results would be better globally, locally, environmentally and economically.
What am I missing? Someone help me!
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Joseph 12:26PM (12/03/2007)
Dad,
You're right, hybrids don't make sense for alot of people. If the only point is to save money, then alot of the time it doesn't make sense because of how long it takes or because of how little money they usually save.
I think you're comment on battery lifespan may be incorrect though. From what I can gather, hybrid battery packs have rather good life-spans. I know someone with an old Prius (the dorky little first version :) ) that has had the car for 4-5 years and they say nothing has ever gone wrong. I also met someone with a Honda Insight* that is 7-8 years old, and hasn't had any battery problems either. If you see here:
http://www.consumerreports.org/cro/cars/used-cars/used-cars-best-and-worst-406/index.htm
In the link, both the Honda Civic Hybrid and the Toyota Prius are listed under the list of most reliable cars.
Here's another link with similar info: http://autos.msn.com/advice/CRArt.aspx?contentid=4023544
Also, you said on the highway that hybrids don't make sense. Well, kinda sorta. Because hybrida have the electric motor assist the engine, they can get away with a much smaller engine without being considered TOO slow. So because the engine is smaller, they get better fuel-economy on the highwway than the standard model. The difference in fuel-economy on the highway is not as dramatic as the differnce in fuel economy on the city, but it is still considerable. Not all hybrids get better fuel economy in the city than they do in the highway though, the Honda IMA hybrid system delivers better highway than city fuel-economy.
So, yeah, hybrids don't really make sense financially unless you drive only in stop-and-go traffic, or if you drive alot of miles on the highway.
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Chris M 2:57AM (12/03/2007)
"Dad", you're suffering from the "silly hybrid myths" syndrome, which causes you to misunderstand hybrids.
First off, it is unlikely anyone will have to replace the NiMH battery anytime soon. There are 10 year old Priuses running around Japan using their original NiMH battery. There are Priuses that have gone over 200,000 miles still using their original NiMH battery. Toyota designed a battery managment system that keeps the battery charge between 85% and 35% to maximize battery life. There may be a slight reduction in battery capacity after 10 years, but the car can compensate, it will still work. Of course, there are no guarantees for any 10 year old car that there won't be a major cost breakdown somewhere, but so far, hybrids have demonstrated above average reliability, and the Prius and Civic Hybrids are in the reliability top 10. (results from 2006 survey of over 6 million car owners)
Reliability usually leads to reduced maintenance and repair costs. Hybrids have less brake wear due to regenerative braking, and the IC engine runs less, leading to less engine wear. The savings in maintenance could, by itself, more than compensate for any future battery replacement.
Hybrids get excellent milage on the freeway, often better than in city driving, in spite of what the EPA figures may say. The smaller IC engine and more constant engine speed and power output optimizes freeway efficiency, and hybrids can take advantage of several fuel saving tricks not available on other cars.
The NiMH battery pack on a Prius only weighs about 110 pounds, less than an average adult passenger. That's hardly a major burden.
Carpooling in a hybrid is better - globally, locally, environmentally and economically - than carpooling in a non-hybrid gas guzzler. Perhaps you should stop commuting in a gas guzzler and carpool with your Prius driving neighbor. Hey, with the experience, you might finally get over those silly hybrid myths!
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cwerdna 3:32AM (12/03/2007)
Joseph: Great observation! I didn't realize that. Looking at the Prius vs. 4 cylinder Camry comparison, it looks like they made the same mistake.
Per fueleconomy.gov, the combined 08 method mpg rating for the 08 Prius is 46 mpg vs. 25 for the 08 Camry. If you look up 07 Camry 4 cylinder numbers, the old numbers were 27 combined and 24 under the new method.
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mike 6:38AM (12/03/2007)
Dad, OMG, you're right, not getting a Short Term Benefit make the whole proposition non-viable!
Just like those FOOLS who buy Solar panels and Geothermal systems What Are They Doing? How Dare they save money in the Long Run and Take on such RISK! Look at those Geo-Thermal Fools, they spend 20,000 on a heating system, compared to 3000 for an oil burning furnace, to save 70% on heating/AC costs for the life of the house 100 years. How Dare they Save Money in the Long Run.
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mike 6:44AM (12/03/2007)
Oh, and Dad, those prius have a 1.5 liter gas engine, so yes even on the highway they save money compared to your Grossly Overpowered V8s, designed to Burn Gas at the fastest rate possible.
You could ask who are these fools to spend thousands of dollars upgrading to a V8 from a V6 to get essentially no Comparative Advantage in normal driving. A car that has 5 Times the power you'll ever need ( 200 hp ) compared to a car with 10 Times the power you'll ever need ( 400 hp ). This is the Sucker Tax.
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BlackbirdHighway 7:02AM (12/03/2007)
Some of these new hybrid cars are tuned for better performance, rather than better mileage.
So the question then becomes "hHw long will it take to recover the money you save by buying 200 extra horsepower."
Of course, that question doesn't even make sense.
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cowboy bob 7:50AM (12/03/2007)
Never. Math doesn't lie.
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ryan 8:32AM (12/03/2007)
You could also just save a car from the junkyard or scrapper. It would cost TONS less than any new car you could pick up at the dealers, and you save all of the upfront environmental costs associated with the actual CONSTRUCTION of a new automobile. If everything in life were so simple. Fact is, buying new cars can never be considered green. Well, short of a car that runs on nothing and has a useful life of infinite years. I think we are a bit far from seeing that car in the marketplace though.
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Joseph 12:51PM (12/03/2007)
Fewllow commenters, please don't mock another commenter person on this website. :)
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Curt 10:18PM (7/29/2008)
Things to think about:
-Tax incentives need to be factored into the calculations for many of these hybrids.
-I've seen brand new, stripped down Priuses for sale for about $22,000. So they aren't really that expensive. Hybrids are getting cheaper and cheaper by the year.
-$3.10 a gallon is really low. I live in California and a gallon of 87 at the corner no-name/generic, mom & pop gas station is almost $3.50.
-The price of gas increases year by year. The price of gas today is not the same price it was in 2004. So you need to factor the yearly price increase of gas into the calculations. Does anyone really think gas will be $3.10 in 2012-2013 ?
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Dave 7:34PM (12/03/2007)
The payback period is not necessarily just a "Short Term Benefit."
It is also, to some extent, an indication of the additional energy required to manufacture the car.
The mining operation that produces the raw materials, the transportation of those materials, and the processing of those materials require energy. It requires more energy to produce a Prius than a Camry or Corolla. If the consumer doesnt save enough energy to make up for the additional energy used in production, then the purchase is not only financially questionable, it is environmentally questionable.
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