Why Hybrid Cars Don't Really Save Money

Now let me start off by saying that if your primary concern when choosing a car is buying one which is environmentally friendly, then perhaps a hybrid or fuel efficient vehicle is right for you. Buying a hybrid or fuel efficient vehicle will certainly be better for the environment and will reduce our country's dependence on foreign oil. However, if you're considering a hybrid because you expect to save money on fuel....well you better keep reading. (Not to mention the safety differences.)

The reality is that you aren't going to save a dime by driving a hybrid. In fact, buying a hybrid is going to cost you significantly more money that a regular vehicle. Let's use the Honda Civic as an example since it is one of the most popular and most affordable hybrids available.

The base price for a 2009 hybrid Honda Civic is $8,100 higher than a non-hybrid. The hybrid get 45 mpg and the non-hybrid gets 36 mpg. If gas costs $3.00 per gallon, then one mile in the hybrid costs 6.7 cents while one mile in the non-hybrid costs 8.3 cents. At $3.00 per gallon, you will have to drive 506,000 miles before the hybrid will save you $8,100 (that's roughly the distance to the moon and back.)

[506,250 miles]x[$.083-$.067]=$8,100

EPA 2005 statistics say that the average car is driven about 12,000 miles per year (http://www.epa.gov/otaq/climate/420f05004.htm). At that rate, you will have to drive a hybrid Honda Civic for 42 years before you save money if gas stays around $3.00 per gallon.

"But gas prices are rising," you say! Unfortunately you still won't save money unless gas prices reach $12.65 per gallon. If the price of gas increases by 3% per year it will take 48 years to reach 12.65 a gallon. If you account for inflation, however, the price of gas has increased by less than 1% per year since the 1970's (http://inflationdata.com/inflation/inflation_rate/Gasoline_Inflation.asp).

Hybrids also have the disadvantage that they are more expensive to repair than traditional vehicles. Not only are the prices of parts higher because they represent a smaller portion of the market, but there are also less dealers who are equipped to work on hybrids. Automotive repairmen are also less experienced with hybrids since they are less common. Less experience means it will take them longer to repair, which means you're paying for more service hours.

If you really want to save money and help the environment at the same time, buy a vehicle with a manual transmission. Manual transmissions are cheaper both to buy and repair than automatic transmissions and they get about two miles per gallon better fuel economy for city driving than automatics. The difference is even better when driving in snow or mud.