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Hybrids & diesels: Do they save money?

Last updated: February 2012

Chevrolet Volt

Gas prices have more than doubled in the last 10 years, and they remain in constant flux. One effect we’ve seen is that the price of hybrids and diesels spike along with gas prices, then fall back to Earth whenever gas prices moderate. When fuel prices were on their meteoric rise in 2008, stories of used hybrids selling for new-car prices were common, and nearly all new hybrids came with a premium on top of the sticker price or a long waiting list.

Lately, the hybrid hype has cooled. And introductions of new diesel models in North America have been limited to a few European automakers.

But not all hybrids and diesels make financial sense, even in an era of high gas prices. Our latest analysis shows which models pay for themselves in overall owner costs—and which don’t.

Our findings show that six tested diesels can save you money no matter what fuel costs, because their depreciation and fuel costs are significantly lower than their closest conventional counterparts: the Volkswagen Golf TDI, Jetta TDI sedan and wagon, and Passat TDI, the Mercedes-Benz E350 BlueTec, and the GL350 BlueTec SUV. Buying a Passat TDI instead of the five-cylinder Passat can save you $5,000 over five years based on diesel fuel price of $3.90 per gallon and $3.60 for gas. The Mercedes-Benz GL350 BlueTec can save more than $7,000 over the same time frame.

We found that some models will cost you more to own than a conventional equivalent will at any gas price on record. For example, gas would have to cost more than $9 a gallon before you would save money by buying an Infiniti M35h instead of a conventionally-powered M37. Likewise you'd come out ahead with the BMW 335d diesel only if fuel cost more than $13.70 a gallon.

Some models weren’t clear-cut winners or losers. They may make sense for some consumers who are willing to pay a little extra in the long run to burn less gas.

Hybrid & diesel payback

In this analysis, we compared the five-year owner costs of 13 hybrids and seven diesels with those of similar conventional vehicles, using Consumer Reports' new-car owner-cost estimates. The conventional vehicles with which we compared the hybrids and diesels are the closest available alternatives when considering all factors, including performance, safety, and features. Most were compared with a similarly equipped all-gas version from the same model line. For hybrids and diesels that don’t have a direct gasoline counterpart, we chose the most similar model in price and features, from the same automaker where possible or otherwise a direct competitor.

Cost factors we considered include depreciation, fuel costs, insurance, interest on financing, maintenance and repairs, and sales tax. Of those, depreciation makes up the largest portion, a whopping 48 percent of owner costs in the first five years. We factor in depreciation, assuming that owners trade in their vehicles after five years, a typical ownership period.

Hybrids vs. similar all-gas models

After comparing the five-year owner costs of hybrids with those of similarly equipped conventional vehicles, we found many will save you money, even without tax incentives.

Make & Model Purchase price MPG Total 5-year owner cost Total 5-year cost savings (or loss) Years to pay back Fuel cost for 5-year payback
Small Cars
Chevrolet Volt ** $32,495 61 $36,500 -$1,000 6 $4.27
Chevrolet Cruze 1LT $19,720 26 $35,500      
Honda Civic Hybrid $24,800 40 $29,250 $750 1 $2.15
Honda Civic EX $21,275 29 $30,000      
Honda Insight $18,970 38 $26,750 -$500 7 $4.75
Honda Fit (base) $15,870 30 $26,250      
Lexus CT 200h $31,775 40 $37,250 $3,250 1 Any price 
Audi A3 2.0T (FWD) $30,345 25 $40,500      
Nissan Leaf SV $26,130 106 $27,500 $5,750 1 Any price 
Nissan Versa Hatchback $19,850 28 $33,250      
Toyota Prius Two $24,280 44 $26,500 $1,500 1 Any price 
Toyota Corolla LE $18,360 32 $28,000      
Volkswagen Golf TDI (manual) $24,955 38 $29,250 $5,750 1 Any price 
Volkswagen Golf 2.5 $20,525 24 $35,000      
Volkswagen Jetta TDI $25,100 34 $29,500 $2,750 1 Any price 
Volkswagen Jetta SE (2.5) $20,300 25 $32,250      
Midsized cars
Lexus HS 250h $39,975 31 $44,500 -$3,500 More than 8 $11.51
Acura TSX (base, 4-cyl.) $30,695 25 $41,000      
BMW 335d $51,875 28 $54,250 -$4,500 More than 8 $13.70
BMW 328i $41,925 23 $49,750      
Ford Fusion Hybrid $32,985 34 $38,000 $1,250 1 $1.86
Ford Fusion SEL (4-cyl.) $28,015 24 $39,250      
Hyundai Sonata Hybrid $26,545 33 $33,250 $1,750 1 Any price 
Hyundai Sonata SE (2.4) $23,545 27 $35,000      
Volkswagen Jetta SportWagen TDI (manual) $26,030 36 $30,000 $6,250 1 Any price 
Volkswagen Jetta SportWagen SE $24,780 23 $36,250      
Volkswagen Passat TDI SE $28,665 37 $32,000 $5,000 1 Any price 
Volkswagen Passat SE $25,595 25 $37,000      
Luxury sedans
Infiniti M35h $57,945 25 $63,000 -$2,750 More than 8 $9.35
Infiniti M37 $51,945 21 $60,250      
Mercedes-Benz E350 BlueTec $57,525 26 $62,250 $4,250 1 Any price 
Mercedes-Benz E350 $55,245 19 $66,500      
Small SUVs
Ford Escape Hybrid $33,985 26 $39,250 $500 1 $2.43
Ford Escape XLT (4-cyl.) $28,240 21 $39,750      
Midsized SUVs
Lexus RX 450h $50,430 26 $54,500 -$3,000 More than 8 $8.97
Lexus RX 350 $44,430 21 $51,500      
Toyota Highlander Hybrid Limited $45,554 27 $47,750 $0 5 $3.62
Toyota Highlander Limited (V6) $38,804 18 $47,750      
Large SUVs
Chevrolet Tahoe Hybrid $57,380 19 $65,250 $2,750 1 $1.25
Chevrolet Tahoe LT $51,435 14 $68,000      
Mercedes-Benz GL350 BlueTec $67,525 19 $73,500 $7,250 1 Any price 
Mercedes-Benz GL450 $68,525 15 $80,750      
 

*MPGe represents the equivalent energy in one gallon of gas.
**Based on 70% electric and 30% gas usage.

   

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