Payback period on hybrid cars

[MillCreek]

http://www.nytimes.com/2012/04/05/business/energy-environment/for-hybrid-and-electric-cars-to-pay-off-owners-must-wait.html?_r=1&hp

A really interesting article in today's NYT on the payback period for hybrid cars.  They looked at the savings on fuel costs compared to the additional cost for a hybrid vehicle.  Depending on the gas prices and the specific vehicle, between 6-10 years payback is typical. 

Wow.  Quite a long time.

[French G.]

you mean about 2 years longer than the battery lasts?

[Jamisjockey]

http://www.nytimes.com/2012/04/05/business/energy-environment/for-hybrid-and-electric-cars-to-pay-off-owners-must-wait.html?_r=1&hp

A really interesting article in today's NYT on the payback period for hybrid cars.  They looked at the savings on fuel costs compared to the additional cost for a hybrid vehicle.  Depending on the gas prices and the specific vehicle, between 6-10 years payback is typical. 

Wow.  Quite a long time.

Wife and I were just having this discussion yesterday. 

I've done the math before and I go  everytime someone talks about the cost savings of a hybrid.

[Perd Hapley]

The article says there are two hybrids, one of them being the Prius, that save money within two years.

Except for two hybrids, the Prius and Lincoln MKZ, and the diesel-powered Volkswagen Jetta TDI, the added cost of the fuel-efficient technologies is so high that it would take the average driver many years — in some cases more than a decade — to save money over comparable new models with conventional internal-combustion engines....


The Prius and Lincoln MKZ are likely to produce overall savings within two years versus similar-size gas-powered cars from the same brand....

[HankB]

Oddly enough, Consumer Reports had an article a while back that examined the payback time for hybrids; it didn't look good.

I was actually surprised, because CR often writes things up based on what they think you should like, rather than what you actually will like.

[Ben]

We've had this discussion several times over the years, and my opinions, based on all the information I've seen, and seen updated, still hasn't changed.

If you want to be economical, get a Plain Jane 4 banger Ford Focus or something similar instead of the hybrid.

If you want to "save the environment", then keep the car you have till it drops. Trading it in for cash for clunkers or whatever to buy that shiny new Prius to drive to the Environmental Defense Center Wine and Cheese parties only makes you a NIMBY environmentalist, because someone, somewhere has to mine the materials for, and produce the batteries for that thing. Not to mention that conserving resources (your old car) is better for the environment than creating waste AND producing more stuff (your new hybrid).

If someone wants to drive a hybrid, more power to them. It's a free country and people should be able to drive whatever the hell they want, to include me driving my truck without having to be nagged about destroying the environment.

Also, this was interesting:

Still, in a recent survey by Consumer Reports, the most satisfied drivers owned Volts. The survey said 93 percent of Volt owners would definitely buy the car again — though there are only 12,000 of the cars on the road.

I suspect that just like with many specialized products, the small consumer base is going to vehemently say that they made the right decision. I think that's basic human psychology.

[Boomhauer]

Buying a hybrid or electric car isn't about saving the environment, it's a status symbol to show off your hubris about how much you "care" and how big your envirod*** is.

These are the same people who tell me I'm murdering the environment because I drive a 12 y.o. pickup while their hero Al Gore is so progressive because he made a *expletive deleted*ing powerpoint movie and is doing so much to "save" the environment (but don't you dare bring up his multiple big *expletive deleted*ss houses and private jets and SUVs)

[Nick1911]

I recall a few years ago I did the math too.  I did it based on mileage, using KBB pricing for new cars, and EPA combind fuel MPG.  Prius vs Corolla.

I don't remember all the details, but I remember the breakeven mileage was around 220k.

[AmbulanceDriver]

I do wonder how the break-even works for the new Volkswagen TDI diesel's. 

[Jamie B]

In addition, the resale for hybrids is quite low compared to gasoline models due to fear about battery repair/replacement costs.

This is a huge unknown, and requires dealer work, as opposed to non-dealer repair shops. 

[HankB]

Quote
Still, in a recent survey by Consumer Reports, the most satisfied drivers owned Volts. The survey said 93 percent of Volt owners would definitely buy the car again — though there are only 12,000 of the cars on the road. 

I suspect that just like with many specialized products, the small consumer base is going to vehemently say that they made the right decision. I think that's basic human psychology.

I'll bet the devoted environmentalists who use composting toilets (rather than flush toilets) in their homes will tell you they're great, too . . . and that you eventually don't notice the smell.

And a few will actually believe what they say.

[brimic]

Wife and I were just having this discussion yesterday.  

I've done the math before and I go   everytime someone talks about the cost savings of a hybrid.

I had to break out a napkin and pencil and show my wife the math on what her insistance of trading in a 5 year, paid off, trailblazer and getting a Prius the last time gas prices were high. IIRC, the break even point would have been around 11 years with the  assumption the fuel prices were at or near $5/gallon permanantly.


Cars the exact opposite of firearms- the cost of feeding them is negligable when taking in account the entire ownership costs.

[Perd Hapley]

I do wonder how the break-even works for the new Volkswagen TDI diesel's. 

They are mentioned in the article as paying off much sooner than most hybrids.

[HankB]

I had to break out a napkin and pencil and show my wife the math on what her insistance of trading in a 5 year, paid off, trailblazer and getting a Prius the last time gas prices were high.  . . .

Think of slightly higher fuel costs as a safety premium - larger vehicles are generally safer in a collision than some itty bitty vehicle that will fold up like a pop can on impact.

[Jamie B]

Think of slightly higher fuel costs as a safety premium - larger vehicles are generally safer in a collision than some itty bitty vehicle that will fold up like a pop can on impact.

That is exactly why we drive a truck and a full size SUV.

If I get hit by one of those Smart cars, they are toast!

[Azrael256]

I do know one person who broke even on his Prius in three years.  He also drove an insane distance to work every day (50k miles/yr roughly) and didn't trade a perfectly good pickup (he just kept it) for the hybrid.  He actually tracked the mileage and managed to beat out the Corolla TCO by 2 to 1.  $3.75 gas accelerated (no pun intended) his closing the gap.  He also tends to dump a car when it can no longer be repaired (he sent his last Tacoma to the crusher at 350k+).

He's the kind of person who does everything right with cars and bought the hybrid based on the calculations and not "being green" or some other nonsense.  He was actually showing a deficit in his calculations the first day, but the assumption that fuel prices would go up was entirely rational.  I think if you're an idiot about cars, you'll be an idiot about it with an electric motor.  If you're careful and calculating about cars, you'll make a good decision about which powerplant is most economical.

So, statistically speaking, he's one of the three drivers all of us collectively know who did it right, and the other 99.99% are idiots about it.

[brimic]

Think of slightly higher fuel costs as a safety premium - larger vehicles are generally safer in a collision than some itty bitty vehicle that will fold up like a pop can on impact.

That's how I see it, though a smaller car made today is going to have a lot more airbags and other negineering to help survive a crash than the 15 year old  fulll sized sedan I drive.

[MillCreek]

Also of note in the article, was the recommendation that paying extra for the 'eco' package on a conventional car was also not worth it, from a payback perspective.  They take even longer for payback than a hybrid.

[zahc]

The efficient market hypothesis predicts that hybrid vehicles will not save you money. If they really did save money, demand would be high for them. The price of the hybrid vehicles would rise to meet demand until it was a wash. And that doesn't even take into account the fact that it's currently fashionable to be "green" and thus hybrid vehicles surely have some of that appeal priced in.

The opposite is the reason I have a 1996 tahoe. A 1996 tahoe is expensive to run because it drinks gas and requires occasional repairs. However, everybody knows this, and it's priced in. I got one for $3500. Every time I consider getting a more efficient car, it just doesn't work out on paper.

[mtnbkr]

I drive a 1997 Toyota 4Runner with 196k on the odometer.  Buying a recent Toyota Corolla or Honda Civic will save me about $150/month in gas at current prices.  Not only that, the newer car will stop and handle better (helping me *avoid* accidents) and be more comfortable.  If gas gets much higher, the fuel savings alone may cover the payments.  The only thing keeping me in the 4Runner is the lack of payments and the low or non-existent repair costs.

I'm planning on buying a replacement *before* the 4Runner dies so I can keep it as a hunting/camping vehicle.

Chris

[zahc]

I have to admit, the reason my Tahoe works out is that my commute is only 10 miles. At that distance, the savings are just not great.

[Nick1911]

That's how I see it, though a smaller car made today is going to have a lot more airbags and other negineering to help survive a crash than the 15 year old  fulll sized sedan I drive.

While true, mass still matters... a lot.  An interesting read: http://www.iihs.org/externaldata/srdata/docs/sr4404.pdf

I couldn't find anything comparing things from the 90's to modern cars in this respect, but as crumple zones and front airbags were gaining poularity in the early to mid 90's, I believe that the technology improvements since that time aren't as significant as, say, 1970-1990.  The only old car study I see cited a lot is a 1959 Belair vs 2009 Chevrolet Malibu.  Clearly, the malibu won.  But what would a 1996 Tahoe do against that 2009 Malibu?  (5500lbs vs 3415lbs, respectively.)

Toyota Yaris deaths per million sold (2006-2008): 65
Toyota Avalon deaths per millino sold (2005-2008): 47

I'm not cherry picking here: the trend is clear.  Have a look: http://www.iihs.org/externaldata/srdata/docs/sr4605.pdf

Also:

For example, the National Research Council concluded in 2002 that 1,300 to 2,600 additional crash deaths occurred in 1993 because of vehicle weight reductions to comply with federal standards.

How much additional risk are you willing to take to save how much money?  It's a balancing act, for sure.

[Hawkmoon]

I just spotted a headline a short while ago saying the payback period for the Chevy Volt is 27 years. Haven't read the article yet.

[drewtam]

The best opportunity for a good ROI (<5yrs) is to make a light duty commercial vehicle a hybrid...
utility vans (90% of the full size van market)
working pick up trucks (1% of the pickup market)
and similar

Since these vehicles:
1 Drive more miles/year (also the job site moves around by large margins = can't live close to work)
2 Have very low MPG
3 Get a larger total decrease in fuel burned per year (#1 x #2)
4 the hybrid premium is smaller portion of the vehicle cost


This is also the same market that has the most success selling diesel versions, for the same reasons.

[MechAg94]

That is exactly why we drive a truck and a full size SUV.

If I get hit by one of those Smart cars, they are toast!

My safety reason is visibility.  My F150 has me sitting higher than most other vehicles and I can easily see the brake lights of cars far ahead.  I had to drive in rush hour traffic for a couple years with my last truck and there were probably a more than a few times that extra visibility helped me avoid problems.