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Are Hybrid Cars a Good Deal?

Over the past decade or so, hybrid cars have moved slowly—we could even say reluctantly—onto the automotive scene. Price, lack of range and lack of acceptance all played a part. In the past couple of years however we’ve been seeing more hybrids in the showrooms and on the roads. And now all electrics are starting to turn up too.

Have hybrid cars finally arrived? It seems so, and there are several reasons why.

Prices have come down on hybrid cars

Just a few years ago hybrid cars were somewhat exotic and priced well above the middle price range. But advancing technology, greater public acceptance and perhaps the passage of time have softened prices a good bit. Hybrids and even electrics are no longer “rich man’s cars”.

Are Hybrid Cars a Good Deal?
Are Hybrid Cars a Good Deal?
For example, according to Edmunds.com, the popular Toyota Prius Hatchback starts at $24,000. The Honda Civic Hybrid starts at $24,000. And the Toyota Camry Hybrid Sedan starts at $25,990.

Now you’re final price will be higher as these are just base prices. But that’s the way of the car business across the board. The point is that hybrid cars and electric cars are quickly coming down to the level of affordability for the average household.

Projected gas savings

An average gas powered car getting 25 miles per gallon and driving 15,000 miles per year will consume 600 gallons of gas. At $3.75 per gallon for gasoline, the annual cost of driving the car will be $2,250.

By contrast, the hybrid Nissan Leaf gets an average of 60 miles per gallon. According to FuelEconomy.gov, the annual cost of electricity and gasoline to run the vehicle $1,000.

That’s a savings of $1,250 over an average gas powered car. Over ten years of ownership, that’s a savings of $12,500.

The advantage of buying before the next energy crisis hits

One of the most critical aspects of buying hybrid cars and electrics is that the best time to buy them is when things are quiet on the energy front. When gas prices start to rise, and they will again just as they have in the past, people will stampede in to buy more energy efficient cars. High mileage gas powered cars will be popular, but it’s likely hybrid cars and electrics will take center stage. When they do prices will be at a premium.

In addition to higher prices, auto manufacturers might easily stock out on the most popular models. You won’t be able buy a hybrid or electric at any price. Any one who’s buying a car will want the most energy efficient ones.

It’s important to realize that when gas prices rise they’ll do so in short order. A foreign crisis can unfold in a matter of days and oil prices will react just as fast. Car manufacturers, on the other hand, can’t ramp up production in days or even weeks. It can take months or years, depending on how great the demand is.

If you’ve been thinking about buying a hybrid or electric car, give serious thought to doing so now, while oil and gasoline prices are stable. Once they take off, it will be too late. At that point, either you’ll pay more for the car you do buy, or you won’t be able to buy one at all.

Strategic value in a gas crunch

This point goes beyond cost. If gasoline prices rise substantially, or worse, there’s a disruption in flow due to a supply blockage, hybrids and electrics will be the safest vehicle to own. Not only will you be less dependent on gasoline, but you can take greater advantage of the electric feature of the car by staying local.

No price can be put on this kind of security. You’ll be able to continue to drive while others with gas-only cars will be forced to keep their cars in the garage for lack of ability to afford gas, or becomes none is available. We had just such a situation happen here in Atlanta a few years ago when the primary supply pipeline in our region was disrupted. Things went from bad to worse as it continued for several weeks.

If you have a hybrid or electric vehicle you’ll be able to ride out such a crisis in relative comfort. It’s not that you’ll be complete immune from it, but more that you’ll be less exposed.

What do you think? Have hybrid- and electric cars finally arrived? Can you think of other reasons they would be an advantage? Are there reason’s you’d stay away?

( Photo from Flickr by thienzieyung )


2 Responses to Are Hybrid Cars a Good Deal?

  1. My husband and I currently own both our cars (both ’08 models) outright, so we’re definitely not in the market for something new. We’re hoping they’ll last until the new fuel-efficiency rules kick in a decade from now – but if we need something in the interim, hybrid is definitely the way we’ll do. We even like some of the all-electric models, like the Coda.

  2. Hi Elizabeth–As long as there’s no energy crunch in the meantime, the delay will probably work in your favor. There will be more models at lower prices in a few years. But as I said, that’s if there’s no energy crunch between now and then. That will change everything.

    Still, owning two cars free and clear is a great position to be in. I personally think that a car loan is just about the best debt to NOT have!

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