The Real Cost Savings Of Owning A Hybrid Car

Reviewed: October 16, 2014
By FinanceWeb

The real costs savings of owning a hybrid may be an elusive figure for many drivers. One must start at the beginning and analyze the costs of acquisition. At more than $32,000 per car on average, automobiles and SUV’s are expensive; they are at an all-time high. The costs of a hybrid are on average about $4,500 more than a gas-powered equivalent. Thus, the hybrid owner’s goal is to generate savings in operating costs that exceed $4,500, and to realize further savings from the purchase of a hybrid vehicle.

Comparing a Small Sample

The long-term measures are not available because the hybrids vehicles have not been on the market long enough to provide a definitive life cycle comparison. Further, there are vital parts that differ substantially, and, even when they have similar functions, the characteristics of use and replacement are different. For example, a battery in a hybrid vehicle performs the same starting function as in a gas vehicle, and it does far more. The hybrid battery powers the vehicle after starting, and the replacement cost is more than $4000.00 greater than a gas powered automobile battery.

Five-Year Comparison

In a comparison in which the owners do not replace any major parts, one can compare the costs of a hybrid to a gas counterpart by isolating the costs of fuel and routine maintenance. Over a five-year period of ownership and operation, the average savings in operating expenses favor the hybrid. However, the total savings are approximately $3,500. The break-even point for operating costs will not have been reached using an average of 15,000 miles per year. However, along the way, hybrid owners can certainly enjoy nearly double the gas mileage, and approximately half of the expensive fuel stops endured by the comparable gas powered vehicle owner. One must use a longer lifespan model to recoup the investment premium and realize out of pocket savings for fuels.

Long-life Batteries?

The longer life cycle comparison comes with a remarkable caveat for hybrid vehicles using current battery technology. The capacity of the battery to keep and hold a charge fades over time in many instances. For example, a battery that provided 50 miles of driving when new may only provide 42 miles after seven to eight years of operation. In these chemical-based batteries, much depends on environmental factors and usage. Excessive heat or dirty air can make a great difference in capacity and efficiency in older batteries. Heat drains batteries faster between charges and reduces charge capacity faster than more temperate climates. Similarly, dust and dirt buildups reduce needed airflow for cooling, and this too reduces battery strength and capacity over time.

Hybrids Offer Savings But So Do Gas and Diesel

Among the confusing factors in the marketplace are the fuel-economy advances in gas and diesel powered vehicles. In the United States in particular, gas engines and power trains have improved remarkably, and they offer high levels of performance without great increases in fuel consumption. Further refinements in transmission technology include more speed settings and continuous variable designs which have improved efficiency. The net result is that technology improvements in gas and diesel powered models have reduced hybrid advantages.

Used Versus New

Some recent studies advise that the key to reducing the costs of hybrid ownership is to avoid the price premium. In used vehicle, the $4,500 average costs of the acquisition premium dwindle to near zero among older hybrid models. The reason is that buyers anticipate the possibility of expensive replacements of hybrid systems such as the batteries.