Money Experiences

Tuesday, March 07, 2006

Consumer Reports on Hybrids

Consumer Reports has a pretty thorough review of The Dollars and Sense of Hybrids.

In this article, they compare the relative 5-year cost of the most popular hybrid models with their gas counterparts, in categories ranging from the costs that you’d automatically think of like additional purchase price or fuel savings, and some others that don’t come as quickly to mind such as additional sales tax on the purchase price and quicker depreciation.

No hybrid actually had a lower cost than its similar gas model, even after taking gas savings into effect (CR even estimated gas prices rising to over $4 a gallon!) While this didn’t really come as a surprise to me (I’ve read enough articles already to know that you don’t buy a hybrid to save money), it may surprise some people as to how much you pay for these “green cars”. The lowest 5-year additional cost came with the Honda Civic Hybrid, coming in at only $3,700 more than a gas Civic, while the most expensive hybrid was the Toyota Highlander Hybrid, at $13,300 more than its gas model.

Essentially, what I gather from the article is that you should only buy a hybrid if you’re willing to shoulder the additional cost you pay in order to be “earth friendly”. However, CR offers a good quote from John DeCicco of Environmental Defense:

“Hybrids have been overhyped, and the focus on the hybrid has created this impression that if you want to be green, you have to get a hybrid. I think that’s a very damaging perception because there are a lot of other ways to save fuel.”

I agree with this assessment. You can buy a car with outstanding gas mileage that isn’t a hybrid. Carpooling and taking public transportation to work are great ways to both help the environment and save a couple bucks. Heck, if you live close enough, ride a bike! If you’re not living single, try to plan errands so that your cars aren’t pulling double duty.

If you’re bound and determined to buy a hybrid, though, CR offers a few last tips on how to keep from blowing your budget: take advantage of the federal tax credit and any state tax credits you can, check if your company offers incentives for buying these cars, shop for insurance to make sure that your insurer isn’t raising your premiums by too much, and look for some hybrid credentials when selecting your mechanic.

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