We buy hybrids because they use less gas. It could be because we want to reduce emissions – or because we want to spend less money at the pump.
If you’re a lower emissions team then you might be willing to pay a bit more over the years to go for a hybrid. However, if you’re more of a hybrid driver with a lower gas bill, you probably want to make sure you’re actually coming out ahead.
Turns out it’s everywhere. Here’s how the cost comparison breaks down.
Starting price: Hybrids add $3K to $10K (or more)
How much a hybrid will cost you compared to a full gas vehicle varies greatly by make and model. But expect to pay at least $3,000 more — though it could be four times that.
For example, the base gas Toyota RAV4 is only $3,050 cheaper than the base RAV4 Hybrid. If you want the Ford Escape Hybrid, on the other hand, you’ll have to shell out an extra $11,005 over the price of the base gas-powered Escape.
Plug-in hybrids (PHEVs)—hybrid engines that can be charged externally—will cost you the most compared to their gas-powered counterparts. However, this additional expense can be partially offset by federal tax credits if the vehicle qualifies. (There are currently seven plug-in hybrid models that qualify for federal tax credits.)
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Care and maintenance: Mainly wash
This is where things get a little more obscure. Since there are so many different makes and models of gas and hybrid vehicles, it’s really hard to say which one has the most expensive maintenance.
On the plus side, you’ll likely pay less for gas. How much you save will depend on how much – and what kind of – driving you do. (People who drive frequently around town will see the most benefit.) You can also save money on general maintenance, as maintenance costs like oil changes may be less frequent and brakes may be cheaper .
On the downside, repairs can be more expensive (more computerized parts). Also, hybrids tend to be a bit more expensive to insure. Higher auto insurance costs are due to both increased repair costs and increased MSRPs.
Resale value: Gas engines are still preferred
If you search ads for used vehicles for sale, you may notice that hybrids tend to cost more money than full gas vehicles. However, this is a bit misleading. Hybrids typically have more depreciation than gas-powered vehicles.
Prices seem higher because hybrids start much higher. This difference actually decreases as vehicles age.
This of course varies by make, model and condition. It also seems to shift. The number of people interested in hybrids is growing and I suspect it won’t be long before the depreciation evens out.
TL; DR: Hybrids are often more expensive, but this varies by vehicle and driver
In general, yes, a hybrid will often have a slightly higher lifetime cost than a gas-powered vehicle, especially models that have a significant price discrepancy at the time of purchase. A lot depends on what type of hybrid you buy.
Also, some types of drivers may get more value out of their hybrids than others. People who spend a lot of time in stop-and-go traffic (I see you rush hour commuters) can save significantly more fuel than people who drive most of their speed on the highway.
If you’re the kind of person who drives a vehicle until it breaks, then your lifetime cost picture may also be different. Depreciation ceases to matter once the car reaches a certain age. Plus, your gas savings will have plenty of time to accumulate (assuming efficiency stays reasonable).
Whether buying a hybrid is a smart financial choice depends on your own circumstances. Be sure to crunch the numbers before making such a large investment.
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