Some people buy hybrids because they care about the planet. The rest of us just want to save a few bucks on gas (but clean air is a nice side benefit).
There’s no doubt that owning a hybrid will save you money on fuel. A Ford Fusion Hybrid gets 13 more mpgs than gas-only ford Fusion in mixed driving. Assuming a gas price of $3.14 per gallon, every mile you drive in the Fusion Hybrid costs you $.08 whereas a mile in the gasoline-only Fusion costs you $.12.
But given that the Ford Fusion Hybrid has a starting price that’s $8,520 more than the regular Fusion, are you really saving? Let’s do the math.
Hybrid Cost Analysis
To find out how much driving your car costs you per mile, take its combined fuel economy rating and divide it by the price of gas. For this, we assumed a gas price of $3.14 per gallon – the national average price according to the Department of Energy as of this writing. The Fusion Hybrid has a combined fuel economy rating of 39 mpg. $3.14 divided by 39 mpg comes out to $.08 per mile. Do the same thing for the regular Fusion which has a 26 mpg combined fuel economy rating and you get $.12 per mile.
So, you are saving. But, how many miles do you have to drive for the savings to cover the price difference between the hybrid and the gasoline model? For that, take the price difference and divide it by the cost-per-mile difference: in this case, divide $8,520 by $.04. The answer tells you how many miles you’d need to drive the Fusion Hybrid to break even on its higher price. It’s disheartening: based on saving $.04 per mile, you’d have to drive 213,000 miles to break even.
Even if you look at city fuel economy, where hybrids really shine, it still takes a while to pay off the price difference. Based on the same price of gas, but city fuel economy ratings, it costs $.06 more per mile to drive the regular Fusion in the city. If you limit your hybrid to only city driving, you’ll still have to cover 142,000 miles to break even on the Fusion Hybrid. If you drive 15,000 miles per year, that’s more than nine years before you start to realize savings.
Do Hybrids Pay?
Things aren’t as grim as they look for hybrid owners. Not all hybrids have that big of a price difference from conventional models. The Lincoln MKZ Hybrid costs the same amount as the regular MKZ, so you realize fuel savings right away. Also, hybrid SUVs tend to pay for themselves much faster than hybrid cars do, because their fuel economy ratings are so much better than their gas-only counterparts. The Ford Escape Hybrid can pay for its price premium with fuel savings in 46,375 miles – that’s just over three years if you drive 15,000 miles per year. That assumes gas costs $3.14 per gallon. If gas prices rise, the savings will be greater. At $5.00 a gallon, it only takes about 31,000 miles of combined driving: about two years of ownership. And the more city driving you do, the faster your savings will add up.
Making Hybrids Pay
To find out if any hybrid you’re considering is worth it, just do the math. Look for a hybrid with great gas mileage, but a low price premium compared to similar gas-only cars. And, don’t forget about new models coming on the market now. Plug-in hybrids, like the Chevrolet Volt, will allow you to travel 25 to 50 miles on electric power alone. That means that if you have a commute of about 20 miles, you could do without using gas and keep your car running by charging it with a few cents worth of gas each night. The Nissan Leaf uses about $.11 of electricity to travel 100 miles. For comparison, the gas-only Nissan Versa uses about $10 worth of fuel (at $3.14 per gallon) to travel 100 miles. That may not sound like much, but driving 15,000 miles per year in the Leaf will run you about $16.50 in electricity. The Versa will cost you $1,500 in gas.
Also, don’t forget the other benefits that hybrids provide -- some hybrids offer tax credits which can help lower your costs and some communities let hybrids use carpool and HOV lanes. So while your hybrid may not save you money on your commute, it could save you time – and that’s pretty valuable.