Many people buy hybrids because they care about the planet, while others just want to save a few bucks on gas. There’s no doubt that owning a hybrid will save you money at the pump, but it can be hard to determine how much you’re really saving. This guide will show you how to estimate the amount you’ll save by purchasing a hybrid over a gas-only model.
How Much Can You Save?
To find out how much you pay to drive your car each mile, take the price per gallon of gas and divide it by its combined EPA fuel economy rating. For instance, compare the Toyota Camry and the Toyota Camry Hybrid. Assume an average gas price of about $3.38 per gallon, though this will depend on the time of the year and where you live, among other factors. The Camry Hybrid LE has a combined fuel economy rating of 41 mpg, while the regular gas-only Camry gets up to 28 mpg in combined driving. Overall, the Camry Hybrid costs about 8 cents per mile to drive, while the regular Camry costs about 12 cents per mile.
Now determine how long you have to drive for your fuel savings to make up for the extra money that hybrids cost up-front. The Camry costs $22,235 and the Camry Hybrid is $26,140. To figure out the number of years, take the price difference ($3,905) and divide it by the cost per mile difference (4 cents). In this case, you’d have to drive about 97,625 miles to break even. If you drive 15,000 miles per year, it will take more than six years before you start to realize savings. If you plan to sell the car within six years, the regular gas-only Camry is the less expensive choice.
Even if you look only at city fuel economy, where hybrids really shine, it still takes a while to make up the price difference. Using city fuel economy ratings of up to 25 mpg for the Camry and 43 for the Camry Hybrid, it costs about 6 cents more per mile to drive the gas-only Camry in the city. If you limit your hybrid to only city driving, you’ll still have to cover about 65,083 miles to break even on the Camry Hybrid. By driving 15,000 miles per year, it will take more than four years before the savings kick in.
Do Hybrids Pay?
Not all hybrids have as big a price difference over conventional gas-only models as the Toyota Camry Hybrid does, and some don’t command any price premium at all. The Lincoln MKZ Hybrid costs the same as the regular MKZ, so you’ll start saving money right away. Hybrid SUVs, on the other hand, tend to pay for themselves more slowly than most hybrid cars do because the price jump for a hybrid SUV over its gas-only counterpart is generally bigger than the price jump for hybrid cars. The Lexus RX 450h offsets its price premium with fuel savings in about 133,000 miles. That’s almost nine years if you drive 15,000 miles per year and gas costs $3.38 per gallon. If gas prices rise, the savings will happen faster. At $5 a gallon, it only takes about 95,000 miles of combined driving, which is a little more than six years of ownership. The more city driving you do, the faster your savings will add up.
Making Hybrids Pay
To find out if the hybrid you’re considering is worth the extra cost, do the math. Look for a hybrid with great gas mileage, but a low price premium compared with similar gas-only cars. A great example of a hybrid that will put money back in your pocket quickly is the Toyota Prius. Starting at $24,200, it’s one of the least expensive hybrids on the market, and also has one of the highest combined fuel economy ratings of 50 mpg. If gas is $3.38 per gallon, you’ll pay about 7 cents per mile, which is about 1 cent less per mile than the Toyota Camry Hybrid. Since the Toyota Prius costs less than the Camry Hybrid and it is less expensive to drive one mile, you should start saving money faster than you would with the Camry Hybrid.
Don’t forget about models that add electricity to the mix. Plug-in hybrids, like the Chevrolet Volt, will allow you to travel 38 miles on electric power alone, which means that if you have a commute no longer than 38 miles, you could get by without using gas at all.
Also, keep in mind the other benefits that hybrids provide. For example, some communities let hybrids use car pool and high-occupancy vehicle (HOV) lanes. So while your hybrid may not save you money on your commute right away, it could save you valuable time.