Buying A Hybrid Gas-Electric Vehicle -- Will It Save You Money?

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TECHNOLOGY / WILL BUYING A GAS-ELECTRIC HYBRID VEHICLE SAVE YOU MONEY?

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April's Consumer Reports Magazine shows why hybrids may be stuck in neutral. The bottom line is that they cost more -- even with gas savings. “You can do good things for the environment,” said Consumer Reports’ Jeff Blyskal. “You can do good things for fuel �" the world fuel supply. And you can get a nice car, but it's going to cost you more in a lot of cases.”

U.S. News

FUEL ECONOMY

~ By Heather Sells
CBN News

CBN News -- (CBN News) - Rising gas prices have put the spotlight on our driving habits like never before. They are also pushing plenty of consumers to consider buying a hybrid. These gas electric cars may pay off at the pump, but they may not pay off for you in the end.

“Going green” should give hybrid buyers a bigger bang than ever for their buck because hybrids use less gas, thanks to a battery-powered motor.

Although industry experts say consumers are well aware of the need for fuel economy, they admit such awareness is not driving sales.

“They're not sure exactly how to respond. They know that a larger percentage of their budget is going towards gas, and they haven't decided how to refocus,” said Freedom Ford Sales Manager Dave Howell.

Many consider the Prius to be the icon of hybrids. It also clearly dominates the market. In April, Toyota sold 8,000. That's twice as much as any other hybrid.

Thanks in large part to the Prius, the hybrid market has grown steadily in the last few years. In 2004, consumers bought 80,000. Last year, the volume jumped to 200,000. Still, that's just over one percent of 17 million cars sold.

And post-Katrina gas prices have not spiked sales the way many predicted.

“At the end of the day, the average consumer wants to see that the premium they're paying upfront will pay off over time in using less fuel,” explained Anthony Pratt of J.D. Power and Associates.

April's Consumer Reports Magazine shows why hybrids may be stuck in neutral. The bottom line is that they cost more -- even with gas savings.

“You can do good things for the environment,” said Consumer Reports’ Jeff Blyskal. “You can do good things for fuel -- the world fuel supply. And you can get a nice car, but it's going to cost you more in a lot of cases.”

Just how much more? Consumer Reports looked at the ownership expenses for hybrids compared to their gas counterparts over five years.

Here is how the Prius stacked up against the Corolla. The Prius will save you $2,200 in gas. Plus, the current tax credit for the Prius will save you $3,000.

But the Corolla sells for $5,700 less. The Corolla will also save you $1,300 in insurance, maintenance, and financing. At the end of five years, you will clear just $400 with the Prius.

The Honda Civic hybrid would also save you a little money, but consumer reports tested four others that could end up costing you as much as $5,000 more.

Even so, many hybrid owners are happy with their choice.

“They're just nice cars. They're comfortable. It's nice to get 50 miles per gallon,” said Prius owner Joe Martin.

Martin knows he might not come out ahead financially. But for him, that's not the point.

“It's not even about mileage, fuel economy any more,” Martin said. “To me it's about feeling good about doing something for the environment.”

Like Martin, Andrea Tottossy does not know exactly how much she may be saving with her Ford Escape hybrid. But she does know that it allows her to drive in the commuter lane. That can add up to an extra 30 minutes a day.

“I can leave work a little later and sometimes it makes a huge difference, which is getting out the door in the afternoon, and I can reach my kids at a reasonable time,” Tottossy said.

So who is saving money with their hybrid? Taxi drivers like Marty Smith.

“I went from using $40 to $45 a day worth of gas,” Smith said. “I'm down to between $10 and $17 a day.”

Smith said driving in San Francisco traffic maximizes the use of his electric motor and cuts his gas bill. “You're stop-and-going all the time, so you're running on electricity for the better part of the day,” he explained.

But most drivers come nowhere near to saving like Smith.

The cost is what is so difficult about going green. Lackluster sales this spring forced Ford to offer zero percent financing on the Escape hybrid. But Ford is banking on better times with ambitious plans. It will produce a quarter-of-a-million new hybrids by 2010.

“We are seeing increasing interest in hybrids, and I think as you continue to see more vehicles offering hybrid power trains, that you're going to see the popularity grow as well,” said Mark Kauffman of Ford Hybrid Sales.

General Motors rolls out its first hybrid this fall -- the Saturn Vue green. I got to drive the so-called "mild" hybrid, which has angered some environmentalists. That's because it upgrades fuel economy by just five miles a gallon. But GM is betting consumers will go for the price -- only $2,000 more than the regular Saturn Vue.

“It's one of the few hybrids that customers will be able to buy that has a chance of paying off the investment that the customer pays upfront over the years of use of the vehicle,” said Mickey Bly of General Motors Hybrids.

Analysts think so many different hybrids with different gas mileage could confuse consumers.

But the variety may well bring down the price and help move them more into the mainstream.

Pratt said, “For the hybrid technology to succeed in volume, the price will have to come down, or the price of gasoline will have to go up, or there will have to be other incentives.”

Just buying a hybrid does not guarantee that you will save money or gas. Your best bet? Check the fuel mileage and ownership costs of both hybrids and non-hybrids.

You may find that downsizing to a smaller gas car may save you more, overall, than a hybrid, and you would still do yourself and the environment a favor.

The Christian Broadcasting Network, Inc. © 2006

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