Is Hybrid a Good Investment?

by : Brad Moore & Megan Sculley



Is Hybrid A Good Investment?

As our fast-paced lifestyles continue to grow and change, so do the vehicles we drive. Buying a car has become more than simply deciding on style, color, and features. The innovative auto-makers of today are throwing "green" options into the mix. Gas-electric, stop-start, and ethanol vehicles are setting a trend for saving the environment on the road. The popular hybrid vehicles, combining gas and electric, conserve gas and money. Some may not consider the environment a determining factor in purchasing a car; however, most would reconsider if saving the environment meant saving money.

Of course these ground-breaking vehicles do not come for free; in fact, they are more expensive than their original model. For example, the Honda Civic Sedan currently sells for $15,810 while the Honda Civic Sedan Hybrid sells for $22,600. The question here is simple. Is it worth it? Is it worth paying more for the hybrid now to benefit in the future? If only the answer were as simple as the question. Yes, you will benefit from driving a hybrid in the future. The exact moment in the future is dependent on a few additional factors.

Making back what you paid in excess for the hybrid depends on the car brand and model, current gas prices, and how often you drive. Assuming you drive 10,000 miles per year with a gas price of $3.00 per gallon, the number of years until break-even for each of the following hybrid vehicles is: Nissan Altima Sedan (1.64 years), Lexus LS600 Sedan (11.94 years), Lexus GS460 (1.02 years), Honda Civic Sedan (3.395 years). Keep in mind that the LS600 is a luxury vehicle and the cost gap between the regular model and the hybrid is large. Of course, the more you drive per year, the more save, and the faster!

Assuming an individual drives the following hybrid vehicles 15,000 miles per year: Nissan Altima Sedan (1.09 years), Lexus LS600 Sedan (7.96 years), Lexus GS460 (.68 years), Honda Civic Sedan (2.26 years). The Honda Civic Sedan mentioned earlier had a price difference of $6,790. At 15,000 miles a year and $3.00 a gallon, it only takes a little over two years of driving the hybrid to make up for the original price difference. It only takes the Nissan Altima Sedan Hybrid a little over a year to save in gas money what was originally paid in excess to the regular model. With every additional mile driven from this point on, you will be saving money while saving the environment.

Another great hybrid is the Toyota Pirus is the best buy due to purchase price of $20,900 and an annual fuel expense of $652.17. (Based on 10,000 miles; $3.00 a gallon) The Toyota Pirus also has the quickest returned on investment compared to the Honda Civic and the Nissan Altima. The Nissan Altima Hybrid Sedan is priced at 25,795.00 and has the second quickest return on investment, at 1.09 months. (Based on 15,000 miles) Both of these vehicles present very aggressive saving and relatively quick turn on your investment.

Currently, the Toyota Pirus is the number one selling hybrid in America and the hybrid name is synonymous with the Pirus. The Pirus was launched in August 2000 to the U.S. market and reports show that the Pirus has taken off with thousands being sold each year. Depending on the features, style, and price that you like the top three hybrids that we found on the market were there Toyota Pirus, Honda Civic, and the Nissan Altima.

Since the early 1990s there has been a strong push for manufacturing a vehicle that was fuel efficient and healthy for the environment. With hybrids now being in the U.S. market for over eight years; you can purchase with confidence. Some of you still may have the question in the back of your head, "How reliable are hybrids?" You can rest a sure that these vehicles are reliable and the manufactures are backing them with aggressive warranties. Hybrid warranties range from 3 years/ 36,000 miles to 10 years/ 100,000 miles. When shopping for you next Hybrid vehicle make sure you look into tax incentives. Check with your local dealer or on-line at www.fueleconomy.gov to see what models qualify for this savings.

The hybrid concept is still relatively new to the U.S. market and to many auto-makers. As the technology continues to improve, manufacturing continues to increase, and more auto-makers making Hybrids we will most likely see the prices become more competitive and lower. Over the past couple of years there has been double digit growth in the Hybrid category and this will only continue to grow with the high gas prices.

When comparing Hybrids vs. the regular gas powered car you will notice in many cases that the pay back is in the short term. The price difference between the two will most likely vary between $20-30 a month when calculating your monthly payment, but the fuel expense is where you will end up saving hundreds.

If you are considering a new car look at the Hybrid models as well. You will not really notice any significant changes between the ride and style of the Hybrids. The biggest difference you will see between the two is how much longer it takes you fuel gauge to get to empty on the Hybrids then on the regular gas models.

Is the hybrid worth it? We say yes. No one wants to spend more than they have to. However, if you plan to keep your car for more than three years, most hybrids will make up for their excess price and more. Ask yourself how long you plan on keeping the vehicle, how much you plan to drive, and if a greener environment matters to you. A higher price now could mean a better future for you and your environment.

NOTE: The vehicle prices and statistics were gathered from edmunds.com, Honda.com, Lexus.com, Nissian.com, and Toyota.com.