Money Experiences

Friday, March 10, 2006

Update on Hybrids

I read an article on CNN Money that discussed the hybrid article in Consumer Reports that I reviewed here.

The main thing that I was interested me in the article was that apparently CR's website had corrected the depreciation figures from it's magazine, and now the Prius and Civic hybrids do actually save you money over five years! I checked out the CR's, and it looks like they made one other change to their magazine's figures: after recalculating the depreciation figures, they didn't leave them as a seperate cost. Instead, they took the depreciation off of the purchase price, and then gave the resale value of the car. So, instead of the hybrids having a couple grand in depreciation dragging down their figures, they now have a number that helps their cause. How's that? Since the purchase price of a hybrid is already so much more than a gas model, even after taking more depreciation off, the hybrid still has a higher resale value.

Well, that does change a lot! Instead of being several thousand dollars in the hole as a result of buying a hybrid, it looks like you can now come out ahead! Being that this is the first article that I've seen to actually state that buying a hybrid can save you money even after the higher purchase price is taken into consideration, that's quite a boost for hybrids, IMHO. I'm happy to see that a solid financial case can be built for these cars.

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