Friday, April 18, 2008

Are hybrids cheaper?

Ginger over at Girls Just Wanna Have Funds recently wrote about hybrids. She specifically wrote about SUV hybrids but it got me thinking. My husband’s car, a 2003 Hyundai Sonata, is next in line to be replaced. Pretty much the only thing we use his car for is to for him to drive back and forth to work. I also take it to school or to run errands if he is staying home with the kids. It’s our utility car. So in reality it doesn’t need to be fancy although I would love for him to get the Mustang he has been eyeballing since we met.

But anyways, back to the hybrid thoughts…Ginger’s post made me think about the cost of owning a hybrid. I had never done any research but for some reason I thought hybrids were really expensive and the initial cost outweighed the gas savings. Maybe that was true before gas hit $3.00 a gallon, but it doesn’t seem to be true anymore. So let's take a look.

I looked around and from what I found the Prius is the best deal going for a hybrid. It says on that website that they cost $20,000 but I’ve never known a dealership to sell a car for the online price. A quick stroll through auto trader and I figure it would cost us about $25,000 for a barely used Prius. And I’m assuming nothing for our trade since we still owe quite a bit on it. Kelly Blue Book breaks us about even, so nothing there.

I figured our payments on the Prius to be about $483.32 a month. ($25,000 at 6% for 60 months) Well, that pretty much settles it right there. The Sonata is costing us about $462 with the payment and gas. So, just the payment alone is $21 a month more than we are paying right now. And we haven’t considered gas yet.

We drive the Sonata about 1,500 miles a month and spend about $200 a month in gas. If the Prius gets their estimated 46 miles per gallon and we drive for 1,500 miles at $3.20 a gallon it would cost us $104. Which is amazing really.

In the end it would cost us $125 a month more to have a Prius. Our total outlay right now is about $462 and the Prius would cost us about $587. Gas would have to get up to $5.50 a gallon before the Prius would be cheaper. Either that or the price of hybrids would have to come down, which looks likely. It seems there are several low cost hybrids in the works right now.

Of course there are other considerations such as insurance, licensing, potential tax breaks, maintenance, ect.

While this means we won’t be running out and buying a new car this weekend, I’m certainly going to look into it when the times comes to buy a new car. Which is hopefully still a few years away.


Seb said...

Does your husband do mostly highway driving? Hybrids get pretty average gas mileage on the highway. They make up for it in city driving, where the car runs on the electric motor for stop and go. When the car is traveling on the highway, it runs on the gas engine (negating the cost of the hybrid drive train).

Also, consider looking for at a diesel. VW is coming out with a VW Jetta this year that runs on diesel and gets a combined 50 MPG. Diesel engines have come a long way from the smelly cars from the 70s.

Mom @ Wide Open Wallet said...

Seb: That's so funny that you mentioned Diesel cause we were just talking about that like 30 minutes ago. Almost all our driving is city driving.

Debt Free Revolution said...

Why are you looking to replace a 2003? It should have at least another 5 years on it or more, depending on driving style and maintenance.

"Future Millionaire" said...

Thanks for doing the calculations. I almost bought a hybrid 4 years ago and didn't because of the costs. The high gas prices go the more I keep rethinking my decision.