We buy hybrids because they use less gas. It might be because we want to lower emissions — or because we want to spend less money at the pump.
If you’re team Lower Emissions, then you may be willing to pay a little extra over the years to choose a hybrid. However, if you’re more of a Lower Gas Bill hybrid driver, you probably want to make sure you’re really coming out ahead.
Turns out, it’s kind of all over the board. Here’s how the cost comparison breaks down.
Initial cost: Hybrids add $3K to $10K (or more)
How much going hybrid will cost you compared to a full-gas vehicle varies significantly depending on the make and model. But expect to pay at least $3,000 more — though it could be four times that much.
For example, a base-model gas-powered Toyota RAV4 is only $3,050 less than the base-model RAV4 Hybrid. If you want a Ford Escape Hybrid, on the other hand, you’ll need to fork over an extra $11,005 over the cost of the base model gas-powered Escape.
Plug-in hybrids (PHEV) — hybrid engines that can be charged externally — will cost you the most compared to their gas-powered counterparts. However, this extra cost could be partially offset with federal tax credits if the vehicle qualifies. (Currently, there are seven plug-in hybrid models that qualify for federal tax credits.)
Upkeep and maintenance: Mostly a wash
Here is where things get a bit hazier. Because there are so many different makes and models of both gas and hybrid vehicles, it’s really hard to say which has the most expensive upkeep.
On the plus side, you’ll probably pay less for gas. How much you save will depend on how much — and what kind of — driving you do. (Folks who do a lot of city driving will see the most benefit.) You may also save money on general upkeep, since maintenance expenses like oil changes may be less frequent and brakes can be cheaper.
As a con, repairs can be more expensive (more computerized parts). Additionally, hybrids are generally a bit more expensive to insure. The higher car insurance cost is both because of increased repair costs and increased MSRPs.
Resale value: Still favoring gas engines
If you search sales ads for used vehicles, you might notice that hybrids tend to go for more money than full-gas vehicles. This is a bit misleading, though. Hybrids tend to have more depreciation than gas-powered vehicles.
Prices seem higher because hybrids start out much higher. That gap actually shrinks as the vehicles age.
This, of course, varies by make, model, and condition. It also seems to be shifting. The number of people interested in hybrids is growing, and I suspect it won’t be that long before depreciation evens out.
TL;DR: Hybrids are often more expensive, but it varies by vehicle and driver
Overall, yes, a hybrid will often have a bit more cost over its lifetime than a gas-powered vehicle, especially models that have a significant price disparity at time of purchase. A lot depends on what type of hybrid you buy.
Additionally, some types of drivers may get more value from their hybrids than others. Folks who spend a lot of time in stop-and-go traffic (I see you, rush hour commuters) may save significantly more fuel than folks who do most of their driving at speed on the highway.
If you’re the type of person to drive a vehicle until it gives up, then your lifetime cost picture may also be different. Depreciation ceases to really matter once a car hits a certain age. Plus, your gas savings will have quite a bit of time to accrue (assuming the efficiency remains reasonable).
Whether buying a hybrid is a smart financial choice depends on your own circumstances. Be sure to crunch the numbers before making such a large investment.
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