Total cost of ownership makes great sense for two hybrids
April 5, 2012
Do hybrid cars save consumers money? That question has been asked over and over, and different answers to that question have been provided by many.
The latest, a study carried out by the New York Times using TrueCar.com data found, even at $4.00 or $5.00 per gallon of gas, most hybrid cars and plug-in cars don't make sense. Despite their fuel economy savings advantage, total cost of ownership just doesn't add up, except for two hybrids. According to the NY Times, the best hybrid cars for saving money are the Toyota Prius and the Lincoln MKZ hybrid, which can recover their extra hybrid premium costs after about 2 years.
The story for plug-ins is even worse.
Still, are these really the two best hybrid cars financially speaking?
Other analysis, such as that by Consumer Reports, Edmunds, Forbes, Intellichoice, KBB, and many others have come to different results regarding hybrid cost-effectiveness. While the Prius and MKZ hybrids have shown up on other lists as well, hybrids like the Civic, Insight, Escape, Fusion, and Camry have also shown up on some other lists. How can their be so much disagreement, so much discrepancy?
For instance, to what Camry do you compare the Toyota Camry hybrid? While the Camry hybrid uses a 4 cylinder engine, its hybrid powertrain provides extra horsepower and performance more akin to the 6 cylinder Camry than the 4 cylinder version. So, comparing the Camry hybrid to the 4 cylinder Camry doesn't add up, yet some do just that. Likewise, do you compare the base Camry hybrid to the base Camry, since they are both base models, or do you compare the Camry hybrid to a similarly equipped Camry? Again, some compare the base Camry hybrid to a base Camry, despite the fact that the Camry hybrid comes with much more standard equipment. But, apparently, comparing base model to base model is just so much easier. All of these factors, and others, can have a big impact on determining the best hybrid cars for the money.
Plus, if you're truly serious about finding the best hybrid cars financially speaking, then consideration must be given to real world driving requirements. For example, in heavy urban congestion, many hybrid cars achieve much better fuel economy than EPA estimates, while conventional cars perform below estimates. Thus, this is a factor that potential hybrid buyers must individually asses when trying to pick the best hybrids in terms of cost-effectiveness.
Without question, hybrid buyers have to realize that it's total cost of ownership that matters most. Hybrids require paying an up front hybrid premium, that takes 2 years or more to recover via gasoline savings. Then that savings starts becoming a real financial gain. For some hybrids, however, it might take as long as 10 years or more to recover that hybrid premium. Even longer for plug-ins.
Nevertheless, when it comes to the best hybrid cars for saving money, it's hard to argue against the Prius and MKZ hybrids. These two hybrid cars regularly come out as top picks in total cost of ownership according to much analysis. Still, many other hybrid cars have also been acknowledged in other studies, so hybrid consideration shouldn't be limited to only the Prius and the MKZ.
Consequently, if saving money is your key motivation for buying a hybrid, it's important that you understand your basic driving needs. Is heavy congestion part of your commute, or is it mostly highway miles? For drivers regularly facing congestion, hybrids like the Prius and the MKZ are hard to beat in their respective classes, but other hybrid vehicles can be worthy of consideration as well, but you'll have to do some of your own analysis.
If you're considering a hybrid, match it up against the non-hybrid, and be totally fair. Consider every option, amenity, engine size, etc. Think about average fuel economy, and how your fuel economy might vary based on your typical drive. Then, if you really want to get into greater detail, check out resale value between the two cars, as well as insurance premiums. Ultimately, this is the only way to determine if hybrid cost of ownership makes sense for you or not.
Posted by dahcredyns, aka Chad Snyder.
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