September 2006
The dollars & sense of hybrid cars
An investigative report on the costs, and potential savings, of going hybrid
Ever-changing gasoline prices, Ford's incentives on its Escape hybrid, and introduction of the 2007 Toyota Camry hybrid have
given gasoline/electric hybrid cars new cost advantages over their all-gas equivalent models, according to Consumer Reports' August 2006 assessment of the costs and savings related to seven hybrid vehicles.
But the hybrid edge will shrink for Toyota Motor Sales due to the success of the Prius. On Oct. 1, generous federal tax credits for Toyota and Lexus hybrids are expected to be cut in half, as part of the legislated phase-out of the government subsidy.
Know, too, that our latest comparison is based on a mathematical model that assumes that the price of regular gasoline will gradually rise over the next five years to almost $6 a gallon and average $3.66 a gallon for the entire period--a scenario that favors hybrids. This assumption, based on recent gas-price trends, including the fast run-up last spring and the collapse this fall as summer gasoline demand wanes, sees the average cost per gallon as being greater than that used in the April 2006 analysis. This assumption is also significantly higher than the current long-term government forecast, which predicts that average all-grade prices will decline through 2014. In the government's worst-case scenario, the gasoline cost will rise to only $2.45 a gallon by 2011, the five-year end point of our study.
Hybrids can present a dilemma for car buyers. On one hand, they are more fuel-efficient and produce lower emissions than conventional, gasoline-only vehicles. Most current models have also scored well in our testing and are highly rated in our reliability and owner-satisfaction surveys. But hybrids are typically priced thousands of dollars higher than similar all-gas models.
So, for people who believe that hybrids will also save them money, the picture hasn't been so clear and can be further clouded by changing fuel prices and sales incentives. That's why Consumer Reports investigated and continues to follow all of the major ownership costs and financial benefits of these models. Our update reveals two notable findings:
THE BENEFITS OF HYBRIDS
The rising price of gasoline and concern over U.S. dependence on oil have generated a lot of interest in hybrids, and with good reason. They typically deliver the best fuel economy in their classes. The Prius and Civic Hybrid delivered an excellent 44 and 37 mpg, respectively, in our real-world fuel-economy tests--the best gas mileage we've measured in any five-passenger vehicles. The Ford Escape Hybrid, which achieved the best fuel economy of any SUV we've recently tested, can save you about $900 per year in gasoline costs.
Hybrids emit less pollution, with some models classified as Partial Zero Emission Vehicles by the California Air Resources Board. Each gallon of gasoline not burned prevents the emission of 19 pounds of carbon dioxide, which many believe contributes to global warming.
Several hybrids--the Honda Accord, Lexus RX400h, Toyota Highlander, and Toyota Prius--are outstanding overall packages that score at or near the top of their categories in our Ratings (available to subscribers). Not only do the Accord, Highlander, and RX400h provide moderately better fuel economy than their conventional counterparts, but they also provide notably quicker acceleration. The Highlander and Prius are among our "Top Picks for 2006."
For those hybrids for which we have data from the "Annual Car Owner Satisfaction Survey," owners are enthusiastic about models with good gas mileage. But hybrids that emphasize performance over fuel economy earn less-glowing reviews.
In California, some hybrid drivers can use special car-pool lanes regardless of the number of occupants in the vehicle, a considerable benefit for commuters in traffic-choked areas. In Virginia, all hybrid drivers have this advantage. There are also federal and state tax incentives.
Those benefits add up to an inviting package for many car buyers who are willing to pay a premium for them. But for those who believe that one of a hybrid's attractions is that it will save them money, our figures show that even the most cost-effective models require an investment of about five years for the owner to break even.
But the hybrid edge will shrink for Toyota Motor Sales due to the success of the Prius. On Oct. 1, generous federal tax credits for Toyota and Lexus hybrids are expected to be cut in half, as part of the legislated phase-out of the government subsidy.
Know, too, that our latest comparison is based on a mathematical model that assumes that the price of regular gasoline will gradually rise over the next five years to almost $6 a gallon and average $3.66 a gallon for the entire period--a scenario that favors hybrids. This assumption, based on recent gas-price trends, including the fast run-up last spring and the collapse this fall as summer gasoline demand wanes, sees the average cost per gallon as being greater than that used in the April 2006 analysis. This assumption is also significantly higher than the current long-term government forecast, which predicts that average all-grade prices will decline through 2014. In the government's worst-case scenario, the gasoline cost will rise to only $2.45 a gallon by 2011, the five-year end point of our study.
Hybrids can present a dilemma for car buyers. On one hand, they are more fuel-efficient and produce lower emissions than conventional, gasoline-only vehicles. Most current models have also scored well in our testing and are highly rated in our reliability and owner-satisfaction surveys. But hybrids are typically priced thousands of dollars higher than similar all-gas models.
So, for people who believe that hybrids will also save them money, the picture hasn't been so clear and can be further clouded by changing fuel prices and sales incentives. That's why Consumer Reports investigated and continues to follow all of the major ownership costs and financial benefits of these models. Our update reveals two notable findings:
- In our analysis, four of seven hybrids we tested recovered their price premium and provided an overall savings of $100 to
$2,500 in the first five years and 75,000 miles of ownership (see Hybrids vs. all-gas models, available to subscribers). Extra ownership costs over five years for the other three hybrid models ranged from about $4,800 to $6,400, compared with
those of similar all-gas models.
- The benefits and costs of hybrids vary significantly, depending on the model. Because of the wide range of hybrid vehicles available, it's especially important for consumers to look carefully at all aspects of the vehicle before buying.
THE BENEFITS OF HYBRIDS
The rising price of gasoline and concern over U.S. dependence on oil have generated a lot of interest in hybrids, and with good reason. They typically deliver the best fuel economy in their classes. The Prius and Civic Hybrid delivered an excellent 44 and 37 mpg, respectively, in our real-world fuel-economy tests--the best gas mileage we've measured in any five-passenger vehicles. The Ford Escape Hybrid, which achieved the best fuel economy of any SUV we've recently tested, can save you about $900 per year in gasoline costs.
Hybrids emit less pollution, with some models classified as Partial Zero Emission Vehicles by the California Air Resources Board. Each gallon of gasoline not burned prevents the emission of 19 pounds of carbon dioxide, which many believe contributes to global warming.
Several hybrids--the Honda Accord, Lexus RX400h, Toyota Highlander, and Toyota Prius--are outstanding overall packages that score at or near the top of their categories in our Ratings (available to subscribers). Not only do the Accord, Highlander, and RX400h provide moderately better fuel economy than their conventional counterparts, but they also provide notably quicker acceleration. The Highlander and Prius are among our "Top Picks for 2006."
For those hybrids for which we have data from the "Annual Car Owner Satisfaction Survey," owners are enthusiastic about models with good gas mileage. But hybrids that emphasize performance over fuel economy earn less-glowing reviews.
In California, some hybrid drivers can use special car-pool lanes regardless of the number of occupants in the vehicle, a considerable benefit for commuters in traffic-choked areas. In Virginia, all hybrid drivers have this advantage. There are also federal and state tax incentives.
Those benefits add up to an inviting package for many car buyers who are willing to pay a premium for them. But for those who believe that one of a hybrid's attractions is that it will save them money, our figures show that even the most cost-effective models require an investment of about five years for the owner to break even.
