In a recent fit of boredom, I decided to find an answer I had been passively hoping to find for quite some time. How long would it take to recoup the additional expense of purchasing a hybrid car vs. an all gas car? The question has bothered me ever since a coworker mentioned that he felt he had already recovered the eventual cost to replace the battery array in his hybrid Civic in fuel savings. I wondered, is that true?
After some research at Edmunds.com and hybridcars.com (see
here, and
here) I discovered that the battery replacement is likely a non-issue; Toyota has yet to actually replace one. Other maintenance costs are not significantly different from all gas cars.
This means that the only financial benefit to owning a hybrid car is in fuel cost savings. Comparing the purchase prices, hybrids are several thousand dollars more expensive than all gas cars. To find my answer, I compared the MSRP (for the 2009 model year, according to Kelly Blue Book) and estimated fuel economy (according to
fueleconomy.gov) of the Honda Civic and Civic Hybrid to see how long I would need to own the hybrid in order to save in fuel cost what I paid up front. The Civic offers the easiest apples-to-apples comparison.
How Long?!?
At mid-range trim levels MSRP for the hybrid is $24,225.00 and $20,675.00 for the all gas. The hybrid gets an estimated 45 mpg highway, whereas the all gas gets 36 mpg. For the purposes of my calculations, I will drive 15,000 miles per year (1,250 miles per month) and will pay on average $1.70 per gallon of gas. Since maintenance costs are a wash, they will not be considered.
We'll call these calculations "Cost of Ownership":
Those of you who remember Algebra I should be with me so far. To figure out when the cost of my potential all gas purchase will surpass the cost of my hybrid purchase, I need to find the intersection of these two formulae. Remember intersections? Algebra I again:
Right? Which means:
All we need to do is solve for n. After that many months, I'm saving money with my hybrid purchase. Let's simplify (and remember to show your work ;-):
So 301 months after I purchase this hybrid, I will begin to save money on gas. That's 25 years, or 375,882 miles. Does anyone still keep a car that long?
How much?!?
You may object that I'm surely too optimistic in my calculations. Gas prices will no doubt rise well above $1.70 per gallon. Were hybrid owners saving money when gas was over $4 per gallon? Let's find out.
Were I to purchase a hybrid, I would want to know I was saving money on gas after 5 years, or 60 months. How much does gas need to cost for that to happen? Again, Algebra I has our answer:
Again, always show your work:
So, when gas averages over $8.52 per gallon you will save money in 5 years by buying a hybrid.
Now, granted, these calculations are based on averages. You may have a long commute, and we all know gas prices fluctuate. But change the numbers and run them. Do they add up yet?
Please check my work; I may have missed something. But I'm confident enough in these calculations to put them on the Internet (FWIW).
To sum up: if you bought a hybrid car because you expected to save money on gas you are bad at math. You should have paid much better attention in Algebra I, and you get an 'F' on this assignment.
If you bought a hybrid car to save the planet, well, you're a fool but I'm sure you made Al Gore proud.
Postscript
Now that you've made it through the math, I'll tell you this...
When Honda first came out with the Honda Insight I was very excited. I drove approximately 500 miles per week commuting to and from college. That's 26,000 miles a year, and gas prices were climbing. The Honda Insight achieved 70 mpg. 70!! That was nearly double my mileage. Unfortunately, the car was too small to haul my guitar gear and I didn't have enough money to buy a brand new car anyhow. But it gave me hope that early adopters would buy the car, it would make money, automakers would continue to improve the technology, and the price would come down to levels comparable to all gas engines.
That hasn't happened yet. Instead, smug douche bags started buying them to feel "green." Now whether its smug douche bags or early adopting gear heads buying the cars doesn't really matter (either way the investment is rewarded), but all this "green" nonsense irks me deeply. The accompanying hubris is troubling, and eventually real people are going to pay a very high price for the arrogance of these douche bags.