We know they’re better for the environment, but do hybrid cars actually save you money in the long run?
Considering the price of the car vs. a traditional gas model PLUS the gasoline saved, this has been a hotly contested debate in the automobile world.
Several studies released by Consumer Reports and other review agencies have shown that on average, you don’t actually save money by buying a hybrid car. BUT, most of these studies only take into account the difference between gas mileages and they just don’t take into account many of the other factors that go into calculating the total cost of ownership.
A new study released by Intellichoice, a vehicle research center, shows that hybrid vehicles actually DO SAVE MONEY over time. In addition to fuel savings, these are some of the ways that hybrid vehicles save you money.
Better Value Retention
Have you ever heard the saying that your car is worth 30% less the moment you drive it off the lot? As a former wholesale automobile dealer I know that this is true of every new car – except the hybrid. A hybrid vehicle retains its value better than any other type of vehicle. Interestingly, the value retention is as true in the first year, as it is FIVE YEARS DOWN THE LINE!
Grab that Federal Tax Credits
There are numerous tax credits you can take advantage of by driving a hybrid vehicle. Yes, they change based on when and where (state) you’ll be buying the car. These tax credits can range anywhere from $250 to $3,150 depending on the state, the time period and the vehicle you’re driving, so keep an eye out for the rebates as you should be able to find both state and federal credits (to lower your tax bill in April).
Lower Maintenance Costs
Right now a hybrid costs more to purchase up front (in the next few years you should see the prices get closer to traditional gas models), and their maintenance costs are significantly lower than the average vehicle. According to the Intellichoice report, the cost of the average non-hybrid vehicle of a comparable nature to the Prius over a five-year period was $33,305. Conversely, the Prius incurred only $19,897 in costs. As someone who’s wife drove a hybrid Civic for many years (and got over 200,000 miles on that engine before trading it in), I can attest to the fact that it was a HUGE cost saver.
Financing Options May be BETTER
One big hidden cost to buying a vehicle is financing. The percent interest you pay on purchasing your vehicle is a huge part of the total cost of your purchase (unless you’re a cash buyer this is REALLY important). While there are no ongoing special rates for the Toyota Prius, the Civic Hybrid or other hybrid vehicles, the fact is that financing deals are run several times a year specifically for hybrids by most major manufacturers, so again BE ON THE LOOKOUT.
That means that if you wanted to buy a Toyota Prius and just waited until a 0.9% APR deal came around, you could save a significant amount of money.
Insurers also take the driving habits of hybrid owners into account. If you own a hybrid, your accident rates are a lot lower than other types of car owners, which in turn lowers your insurance costs.
So, taking all the various factors into account, not just the differences in fuel costs, hybrid vehicles really do end up saving money in the long run.