Are Hybrid Cars Really Worth the Extra Cost?
Japanese automakers Honda (NYSE:HMC) and Toyota (NYSE:TM) made waves in the late 1990s and early 2000s when they debuted their first hybrid vehicles in the United States, the Insight and the Prius, respectively. Boasting higher MPGs than had ever really been seen on a mass-production scale, the cars immediately found a niche with the green crowd, many of whom were still seething the loss of GM’s EV1.
Since then, hybrids have grown immensely, and virtually every major automaker has hopped on the bandwagon in one form or another. In fact, hybrid tech has become so advanced that companies like Ferrari, Porsche, and McLaren are using it in its $1 million-plus super cars — though decidedly not for fuel savings.
Yet, hybrids still cost a premium when compared to their non-hybrid counterparts (for cars that offer both hybrid and non-hybrid models simultaneously.) This premium, according to a recent study by MojoMotors, can be as much as 20 percent, and for good reason: hybrid systems are complex, the batteries aren’t cheap, and there’s a lot of engineering work involved that internal gasoline engines don’t require.
But it begs the question: Is it worth splurging the extra couple of grand up front to save on fuel over the life of the car? Many often wonder this, MojoMotors being one of them. “We evaluated car models that have both hybrid and non-hybrid trims,” the site said. “We built them with the same packages and then compared the difference in price. We then took the difference in MPG and figured how far you can drive until the savings in gas cancels out the difference in MSRP.” MojoMotors used a fuel price of $3.50 per gallon as its reference, though this will vary widely depending on your region of residence.
There are other caveats to take into account, too — not the least of which is driving habits and driving style. Hardcore commuters who drive many miles per day, and those who spend considerable time sitting in traffic (where idling is an issue) will naturally benefit from fuel-saving technologies more. But fortunately, MojoMotors was able to find out just how many miles one would need to drive (remember, using $3.50 per gallon as constant) in order to break even on your new rig.
Here’s how the chart breaks down: the red monetary figure you see below each model, that’s the premium that the hybrid model of the car has over the non-hybrid model. The green figure below? That is how much is gained — in miles per gallon — by springing for the hybrid trim; as you can see, the figures vary from a 6 mile per gallon advantage to 17. As for the green bars along the X-axis, that’s how many miles must be driven before you reach the break-even.
One would think that SUVs would be the most beneficial recipients of a hybrid system addition, as it’s their mileage that could benefit the most — but that hasn’t been the case, for whatever reason or another, and cars like the Nissan Pathfinder and the Toyota Highlander boast just 4-mile and 6-mile per gallon improvements, respectively.
So let’s look at the extremes. With a price premium of $7,660 and a mileage improvement of 6 miles per gallon, it would take buyers of the Toyota Highlander Hybrid over 200,000 miles — probably 210,000-215,000 — to break-even versus buying the non-hybrid vehicle in the first place. On the other end of the spectrum is the Lincoln MKZ Hybrid, which is sold for exactly the same price as the non-hybrid, but boasts a comfy 14 mile per gallon advantage with the hybrid system in place. That, for you non-math enthusiasts, means the MKZ breaks even the second you drive it off the lot.
Overall, the median break-even point for hybrids appears to be at the 125,000 mile threshold. That’s roughly where the Honda Accord Hybrid, the Honda Civic, and the Nissan Pathfinder fall; others, like the Hyundai Sonata, take longer, while the Volkswagen Jetta Hybrid and the Ford Fusion Hybrid take fewer miles to make good on your investment.
But get this: “A different standout is the BMW Active 3. Our study found it needs to be driven almost 2 million miles before it out weighed its initial purchase cost,” MojoMotors said. “It only averages 1 MPG better, yet costs a whopping $6,400 more then a 335i. This number was so big it wouldn’t even fit on our graph.”
Notably, the study didn’t include plug-in hybrids. Though more expensive, drivers who don’t commute numerous miles per day can take advantage of the cars’ all-electric range, and provided the daily commute is less than 20 miles, trips to the gas station are fewer and far between. But overall, here’s how it breaks down: if you commute many miles per day — 40, 50, or more — yes, a hybrid may be in your best interest. But if you’re not the type to hold on to a car past 50,000 or 75,000 miles, then it’s probably worth looking elsewhere.
Notably, drivers who spend more time in urban environments will also see greater benefits since hybrids are, contrary to combustion engines, better in cities than they are on highways. So if your commute involves lots of highway time, it might be prudent to skip the hybrid and look at a diesel instead.
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