Long Wait for Hybrid Pay Back

With gas prices approaching $4.00 again and oil production disrupted by turmoil in the Middle East, many car buyers are looking at hybrids for some much needed relief. Automobile manufactures are more than happy to accommodate buyers, for a price, of course, with dozens of choices. The reigning champ in terms of volume, Toyota's Prius will set buyers back a reasonable $22,800 before options. For those who have to have the most luxurious, there is the Mercedes Benz S400, with a MSRP of $91,000 before options. There are dozens of choices from nearly every manufacturer, but the real question is "is it worth the extra price you pay to get the savings at the gas pump."

To answer that question, you have to analyze the cost vs. benefits. First, I looked at five 2011 models that offer both a conventional and hybrid choice - Honda Civic, Volkswagen Jetta, Toyota Camry, Hyundai Sonata and Ford Focus. I used the base sticker price with no options. Things such as driving habits, terrain, traffic, weather and altitude vary by driver, so to be fair, I used the EPA laboratory mileage estimates.

The up-charge for hybrid engines vary significantly from one manufacturer to another. The 2011 Ford Fusion has the highest hybrid up-charge, $10,000, while the Volkswagen Jetta, at $5,900 was the lowest of the models compared. All the cars compared were full size, with the exception of the Honda Civic. I divided the cost of a gallon of gas by each vehicles average fuel economy to determine the cost per mile driven. I used that number to see how many miles it would take to "break even" on the up-charge. Gasoline prices were taken from the weekly Department of Energy report on regional gas prices as of March 28, 2011.

The cost of fuel and the up-charge have the opposite effect. Higher fuel prices mean greater savings and a shorter pay back mileage. But that high up front cost takes a lot of driving to earn back.

Where you live makes a big difference, so there will be some regional variations based on the price of gasoline, mostly. For example, because LA has the gasoline prices, the payback period is 30,000 miles less than Boston for the Honda Civic. The difference with the Ford Fusion, the highest cost of all, was 41,000 miles. The average of all the vehicles, broken down by region, are: Boston - 213,182 miles; Tampa - 215,031 miles; LA - 184,160 miles; and Seattle - 197,349 miles.

The average life expectancy of a car, according to the Department of Transportation, is 13 years and 145,000 miles. That data, of course, doesn't include a significant number of hybrid vehicles yet.

Time will tell whether hybrid drivers keep their vehicles longer, or whether the hybrid components will wear out before paying for themselves. Vehicle needs change as people age, have kids, change jobs. All of these factors weigh on vehicle choices and needs. And while competition has brought hybrid costs down and probably will continue to do so, that may be off-set with another drop in gas prices below $3.00 per gallon like in 2010. Or the hybrid phenomenon just might stick. An early survey of Prius buyers discovered that money wasn't the most important factor influencing buyers. In an interview with National Public Radio in 2008, Michael Omotoso of JD Powers and Associates, admitted "a lot of people buy hybrids because of what it says about them, just like people buy sports cars to project an image. "

Hyundai Automobiles official Site
http://www.hyundaiusa.com/sonata/

Honda Civic Pricing: Base price
http://automobiles.honda.com/civic-sedan/price.aspx

Hybrid cars: Auto alternatives for the future
http://www.hybridcars.com/hybrid-sedan

Volkswagen official site/Jetta
http://www.vw.com/en.html?sem=208416580&cs:e=g&cs:pro=vwmc

Mercedes Benz USA official site
http://www.mbusa.com/mercedes/vehicles/explore/overview/class-S/model-S400HV

Research and Innovative Technology Administration; Bureau of Transportation Statistics - chart
http://www.bts.gov/publications/omnistats/volume_03_issue_04/html/figure_02.html

Weekly U.S. Retail Gasoline Prices, Regular Grade
http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_home_page.html

New or Used - Whats Best For Me?
http://www.safecarguide.com/gui/new/neworused.htm