Consumer Reports says that some hybrids do pay off - quickly
Click the 2009 Escape Hybrid for a high-res gallery
Contrary to the results from many studies conducted over the past, Consumer Reports has found that some hybrid vehicles actually offer a huge cash savings after just one year of driving. As you would imagine, those savings continues to add up year after year in most cases. Out of twelve hybrids tested, half saved money in the first year of ownership, even without calculating in any applicable tax credits. The six winners: Toyota Prius and hybrid versions of the Chevrolet Malibu and (surprise!) Tahoe, Ford Escape, Saturn Vue, and Toyota Camry.
There were a few losers too, along with some that just about broke even. The worst payback, not surprisingly, come from the most expensive models: the Lexus GS 450h and RX 400h and the Toyota Highlander Hybrid. So far, CR has not revealed the math behind its findings, other than to say that fuel savings only accounted for about a quarter of overall cost to their owners, but subscribers will know soon enough. Get the whole story in the October 2008 edition of the print mag.
[Source: Consumer Reports]
Reader Comments (Page 1 of 1)
BoomBoom 12:52PM (9/03/2008)
I am a big fan of CR, but the numbers don't quite make sense. The Nissan Altima didn't save money whereas the Camry did? They both cost almost the same, both get nearly identical mileage (Altima hybrid is a Camry is Nissan clothes). And the Aura and Malibu are the same cars. They numbers seem a little odd.
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aCReditor 4:28PM (9/03/2008)
BoomBoom,
It all comes down to the price, or more specifically the price premium for the hybrid compared to the most similar gas model. The Altima Hybrid carries a $5,260 premium over the standard four-cylinder, comparably equipped. Even so, it comes close to paying off after five years (and does with federal tax incentives).The Camry Hybrid only costs $1,740 more than a comparable four-cylinder Camry, so is a much quicker payoff.
Likewise, the Malibu and the Aura may be the same car, but the prices are different: The premium for the Aura Hybrid is $500 more than for the Malibu Hybrid. Both these cars are within $500 of their payoff numbers 5 years later, and the effect of that $500 is magnified over the five years, so it makes the difference.
Phil L.,
We had a lot of discussion about the fact that depreciation doesn't show up in most people's monthly budget. But we did the analysis this way to show that it does make a difference in the bottom line over time, and that people should take that into account. Statistics show that the typical car is purchased with a five year loan, and most of these buyers trade in the car shortly after the loan is paid off, so that's how we calculated the numbers.
If you keep your car longer, the hybrid is even more likely to pay off, because you have that many more years of fuel savings and lower depreciation.
As for battery replacement, this is the only study to use real maintenance and repair data for hybrids (many of which are now 10 years old). The maintenance and repair data are averaged for each model, and expensive battery problems didn't tip the payoff balance away from hybrids in our survey.
CNCMike 2:00PM (9/03/2008)
Are they saying that you recover the difference in the cost of the Hybrid over the standard model with the same name and if so is there a non hybrid Prius to base this statement on?
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gerlando 3:15PM (9/03/2008)
CNCMike RTFA! Second paragraph "With gas prices soaring, our latest analysis of owner costs shows that you can save more than $4,000 over five years by choosing a hybrid over a similar conventional gasoline-powered vehicle."
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Phil L. 3:08PM (9/03/2008)
CNCMike -
They compared the Prius to a Corolla XLE. See this sub-item within the report:
http://www.consumerreports.org/cro/cars/new-cars/news/2008/10/affordable-hybrids/hybrids-vs.-conventional-cars/affordable-hybrids-hybrids-vs-conventional-cars.htm
Personally, this quote sums up my problem with their analysis:
"Depreciation makes up a whopping 45 percent of owner costs in the first five years..."
That may be true - but depreciation doesn't show up as an entry in my checkbook. They assume owners trade cars in 5 years. I (and most people I know) keep their cars far longer - depreciation and long-term resale value don't come into play as much as actual out-of-pocket expenses today.
CR says that it takes many years for most hybrids to pay back their premium price based on fuel savings, claiming it only abouts for about 25% of the overall costs (they look at depreciation, insurance, interest on finance, maintenance and repairs and sales tax).
I find it hard to believe there are significant differences in insurance, interest and sales tax (CR says they didn't include hybrid tax breaks in their analysis). Long term repair/maintenance costs on hybrids are still a bit of an unknown.
So, essentially, CR is saying that hybrids retain their value well - at least for the moment. This is hardly rocket science.
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UH2L 3:16PM (9/03/2008)
BoomBoom,
You're starting to see that CR has and has always had flawed methodology. I know somebody who runs a site that explains why CR has issues. I don't make any money from the site, but this guy knows what he's talking about...
http://truedelta.com/pieces/shortcomings.php?session_code=
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Chris 5:07PM (9/03/2008)
Owning a hybrid saves me 10% on my insurance premium. http://www.hybridtravelers.com/
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michael pettibone 8:40AM (9/04/2008)
One reason that all these studies are flawed is that you can by a convetional car at a discount,while you may pay a premium for a hibrid.It will take years to spend the 3,ooo I saved on my Versa on gasoline.
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