Hybrids & diesels: Do they save money?

When fuel prices were on their meteoric rise in 2007-08, buyers clamored for hybrid vehicles. 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.

Fast-forward to now, and the relative stability in the price of fuel has seen a cooling of the hybrid hype. At the same time, many manufacturers have slowed or canceled their plans to introduce clean diesel vehicles to the North American market.

Our latest analysis shows which models pay for themselves at the pump-and in overall owner costs-during a typical ownership cycle.

Two 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 Jetta TDI wagon and Mercedes-Benz GL350 BlueTec. Buying a Jetta TDI instead of the five-cylinder Jetta SE wagon can save you as much as $4,250 over five years with diesel fuel at $3.00 per gallon, while the Mercedes-Benz can save about $8,000 over the same time frame.

We found some models will cost you more to own than a conventional equivalent at any gas price. For example, gas would have to cost more than $10 a gallon before you would save money by buying a Honda Insight hybrid instead of the Honda Fit. Likewise you'd come out ahead with the BMW 335d diesel only if fuel cost more than $4.94 a gallon.

For some consumers, even paying a little extra in the long run is worthwhile to save gas

Hybrid & diesel payback

In this analysis, we compared the five-year owner costs of 11 hybrids and four 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. The Toyota Prius was compared with a Toyota Corolla LE and the Honda Insight was compared with a Honda Fit.

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 will trade in their vehicles after five years, a typical ownership period.