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Thread: Hybrid Cars and Payback Periods

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  1. #1
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    Hybrid Cars and Payback Periods

    My father sent me an interesting article the other day on the payback periods of hybrid cars. Specifically, the study included the time value of money, the premium paid for the hybrid version vice the non-hybrid version (or closest fascimile), differences in repair costs, battery replacement, etc.

    Here are the results, payback period, in years. I've divided it into four categories - Excellent, Good, Marginal, and Ridiculous

    Excellent:
    Toyota Prius - 3.5
    Nissan Altima - 3.8
    GMC Yukon - 4.9

    Good:
    Toyota Camry - 5.4
    Mercury Mariner - 5.5
    Ford Escape - 5.9
    Honda Civic - 6.1
    Saturn Vue - 6.9
    Lexus RX400H - 6.9

    Marginal:
    Chevy Malibu - 10.9
    Chevy Tahoe - 13.8
    Toyota Highlander - 17.9

    Ridiculous:
    Saturn Aura - 31
    Lexus LS600H - 98.5

    I've posted the a copy of the full table, which includes the Final net price, the Hybrid premium, MPG difference, and Annual gas savings, here:



    It's from the Edmunds study (no copyright).
    Last edited by mugaliens; 2008-Jun-20 at 07:22 PM. Reason: OP errantly pre-posted.

  2. 2008-Jun-20, 06:37 PM
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  3. #3
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    Quote Originally Posted by danscope View Post
    Hi, Please put the numbers in perpestive.
    Thanks, Dan
    Look at the price difference between a Camry and a Hybrid Camry. Let's say that's $4000. Look at the difference in gas mileage. Let's say 10 MPG.

    Now assume you drive 12,000 miles a year. How long does it take for the gas money saved to equal the price difference.

    The numbers quoted by mugs' Dad also take into account regular maintenance.
    Forming opinions as we speak

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    Quote Originally Posted by antoniseb View Post
    Look at the price difference between a Camry and a Hybrid Camry. Let's say that's $4000. Look at the difference in gas mileage. Let's say 10 MPG.

    Now assume you drive 12,000 miles a year. How long does it take for the gas money saved to equal the price difference.

    The numbers quoted by mugs' Dad also take into account regular maintenance.
    Hi, Thanks for the reply and clarification.

    Best regards, Dan

  5. #5
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    Right, that number is highly dependent on the price of gasoline. If the price of gasoline goes up to US$8.00 the payback is less than a year. If the speculation market gets fixed, and prices fall down to $US2.00 the payback period might be a decade.
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    Quote Originally Posted by antoniseb View Post
    Right, that number is highly dependent on the price of gasoline.
    Exactly; We had a similar article in our paper a few weeks ago. Unfortunately; they went the other way on it, and didn't consider maintenance costs at all.
    They only did the payback of the added initial cost vs the fuel consumption.
    I remember them using 14,000 miles per year, but I can't remember the gas cost. I think they used $3.50
    And; they omitted Prius from the list because there's no non-hybrid Prius but they did say it closely resembled a Camry.

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    Interesting, I found a similar post with more info.

    I predict a merge coming.

    Anyway, the chart there only mentions price, premium and MPG. No maintenance.

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    Quote Originally Posted by NEOWatcher View Post
    Interesting, I found a similar post with more info.

    I predict a merge coming.

    You have, perhaps, some sixth sense about these things. Threads merged.
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    Quote Originally Posted by antoniseb View Post

    You have, perhaps, some sixth sense about these things. Threads merged.
    \Haley Joel Osment mode\
    I see merged threads
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    Hybrid Cars and Payback Periods

    Mods - please delete this post. For some reason the system errantly posted the first part of my OP.
    Last edited by mugaliens; 2008-Jun-20 at 07:23 PM.

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    I have looked at this for my own personal experience with my 2005 Ford Escape Hybrid (yes, I've kept track of every fill-up and the price I paid). The differential between the hybrid and the non-hybrid was about $3000. At three years I am just about reached the payback, but I drive a lot; I'm already at about 91,000 miles. As others have said, it depends on the price of gasoline and how many miles a year you drive. One other thing it depends on - what do you compare it too. In my case, I'm not comparing it to a non-hybrid Escape, but to the car I would have otherwise purchased, a Toyota RAV4, which gets about 25 mpg. IIRC, the non-hybrid Escape gets about 23 mpg, so the payback would have actually been a little sooner, compared to that.
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    Quote Originally Posted by Swift View Post
    ... One other thing it depends on - what do you compare it too. In my case, I'm not comparing it to a non-hybrid Escape
    Excellent point. I hope to be in the market soon for a second vehicle to use as an everyday car.
    I'm currently leaning to a high milage sub-compact. Nothing in the Hybrid market can really fairly compare to that.

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    My father sent me an interesting article the other day on the payback periods of hybrid cars. Specifically, the study included the time value of money, the premium paid for the hybrid version vice the non-hybrid version (or closest fascimile), differences in repair costs, battery replacement, etc.

    Do you know if the analysis factored in the price of insurance, tags, etc to account for the higher price of a hybrid? I don't know about other places but here in Colorado, we pay sales tax on cars. We also have to pay a "use tax" every year when we buy our tags which is like a sales tax on the value of the car. A more expensive vehicle will mean more expensive tags and a higher sales tax. Insurance companies tend to charge more to cover more expensive vehicles as well. I think we need to factor in those extra expenses when comparing the price of a hybrid verses conventional version of a vehicle. Those extra expenses will make the payback period even longer.

    When the time comes to replace my current vehicle, I'll give hybrids a closer look. Until then, I'll have to stick with my 25-28 MPG (in town) 2001 Honda CR/V "Gutless Wonder".

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    Quote Originally Posted by Larry Jacks View Post
    Do you know if the analysis factored in the price of insurance, tags, etc to account for the higher price of a hybrid? I don't know about other places but here in Colorado, we pay sales tax on cars. We also have to pay a "use tax" every year when we buy our tags which is like a sales tax on the value of the car. A more expensive vehicle will mean more expensive tags and a higher sales tax. Insurance companies tend to charge more to cover more expensive vehicles as well. I think we need to factor in those extra expenses when comparing the price of a hybrid verses conventional version of a vehicle. Those extra expenses will make the payback period even longer.
    Funny you living in CO, as my father lives in the Springs!

    I'll e-mail him and get back with you.

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    Quote Originally Posted by Larry Jacks View Post
    Do you know if the analysis factored in the price of insurance, tags, etc to account for the higher price of a hybrid?
    If you're going to do that, you also should take into account the federal tax credit for hybrids (I believe it is still good for all of them except the Prius). And in some states, hybrids are allowed to drive in the HOV/car-pool lanes, even with only one passenger (no cost savings, but might help the commute time).
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    Yes, I agree that tax credits should be considered in the evaluation. I don't believe the credits should be continued but that's a topic for another thread.

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    How are the Chevy Tahoe and GMC Yukon so far apart when they are the same truck rebadged?

    Or were they doing a Yukon XL (which is a rebadged Chevy Suburban)?

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    Quote Originally Posted by Spock Jenkins View Post
    How are the Chevy Tahoe and GMC Yukon so far apart when they are the same truck rebadged?

    Or were they doing a Yukon XL (which is a rebadged Chevy Suburban)?
    The Yukon went all out, and incorporates much the same technology as the front-running Prius. The Tahoe was a first attempt, merely a smaller engine, some batteries, and an attached electric motor.

  19. #19
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    Ok, Larry Jacks - this just in: "Edumund's calculations focused on the cars' sticker prices - comparing the amount paid for a hybrid model over a gas-engine version of the same model, if available. Then analysts factored in rebate offers on the vehicles, the gas milage in both city and highway drive and, of course, the price of fuel, which averages $4.02 a gallon, according to the latest AAA figures. Also included in the claculations were federal tax credits, which can reach up to $3,000. The calculations do not account for differences in costs for repairs and replacement parts, for example, nor do they factor in varying costs to insure vehicles."

    Thus, any vehicle with a payback period longer than the useful life of the car (barring major repairs) is probably a bad deal.

    Thus, all things considered, the Toyota Prius does it almost twice as better as the Honda hybrid, and if I absolutely had to have a small SUV, I'd go with the Ford Escape; if I had to have a big SUV, I'd go with the Yukon.

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    Thanks for the info. I'd next like someone to do a total cost of ownership analysis over a period of say 6 years and 72,000 miles. Use a fixed price of gas (there's no way to predict what it'll cost over that timeframe), add in projected maintenance costs, insurance costs (pick a particular geographic area), taxes, and the like. This time frame would allow for things like tire replacement (I've read some hybrids use special tires that can get pricey) and the like.

  21. #21
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    Quote Originally Posted by Larry Jacks View Post
    Thanks for the info. I'd next like someone to do a total cost of ownership analysis over a period of say 6 years and 72,000 miles. Use a fixed price of gas (there's no way to predict what it'll cost over that timeframe), add in projected maintenance costs, insurance costs (pick a particular geographic area), taxes, and the like. This time frame would allow for things like tire replacement (I've read some hybrids use special tires that can get pricey) and the like.
    You might check at the website hybridcars.com, there is a lot of info there about hybrids, but I don't know of such a study (and I'm not going to do it, sorry).

    We're a two hybrid household (Civic and the Escape) and neither takes special tires (I've never heard that either about any, except maybe the weird little Insight). The only special thing is that Honda recommends a slightly more expensive synthetic grade oil.

    The one potential maintenance thing I know of is battery pack replacement. IIRC, most of the automakers are warrantying them for 100,000 miles, and from what I've heard, there have been fewer replacements than were imagined. Neither of our cars have given any indication of problems.
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    The tires on a Prius look, well, kind of wierd to me. The entire Insight looks wierd.

  23. 2008-Jun-21, 12:08 AM

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    Looking at all of this, I had an idea: Why have one vehicle when you can have two?

    Let me explain.

    Compare the Prius and the Yukon. The Yukon has twice the payback period because it hauls around all that extra payload capacity that you only need once in a blue moon.

    Instead of two actual vehicles, let's break it down into a Prius with a "steer" package, and a self-propelled trailer. I say "steer" package because the Prius isn't actually towing or breaking for the trailer. Rather, sensors on the hitch will communicate to the trailer what it needs to do (accelerate and break, and how much of each). The trailer would be able to haul everything the Yukon would, and more, but would be rarely used, and would cost loads less as it doesn't carry pax - it's just a motorized utility trailer with a hybrid drive and some brains.

    Driving the Prius, you'd never know it was there, and for 90% of your commute and grocery shopping, you'd enjoy the same high economy of the Prius without paying for the unused payload carrying capacity.

    If Hybrid manufacturers could standardize a communications cable, trailer makers could do the rest.

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    my 97 Cavalier has them all beat- it's paid for and i only have $500 into it. it only costs me a grand total of around $225 a month to keep it gassed up, insured, and maintained. it gets between 31-35mpg depending on how it gets driven, with about 350 miles put on it every week.
    it would take even the best brand new hybrid a LOOOONNNGGG time to work out cheaper than it does once you factor in payments, insurance, tabs, and maintainance.
    hell, i could probably drive my 1974 Monte Carlo (which is long since paid for) that only gets 17mpg for a long time before the costs of a new hybrid works out cheaper for me. i could probably dust off my 82 Ford F250 4X4 truck that only gets maybe 8mpg on a good day with a strong tailwind and still come out cheaper than a brand new hybrid.

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    Quote Originally Posted by novaderrik View Post
    I could probably dust off my 82 Ford F250 4X4 truck that only gets maybe 8mpg on a good day with a strong tailwind and still come out cheaper than a brand new hybrid.
    I lean to the green side, but what you are saying is true. Let's say the choice is between driving a paid-for 8 mpg truck and an 80 mpg 2010 Prius (not available yet). Let's say you'd be paying $500/month for car payments and extra insurance on the Prius, and that gas had gone up to US$10 per gallon. If all this came true you'd have to drive twelve miles a day or more to make it cheaper to drive the Prius. If the price of gas were US$5 per gallon you could go almost 30 miles a day before the Prius is cheaper.
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    Quote Originally Posted by antoniseb View Post
    If all this came true you'd have to drive twelve miles a day or more to make it cheaper to drive the Prius. If the price of gas were US$5 per gallon you could go almost 30 miles a day before the Prius is cheaper.
    And some of us drive a lot more than 12, or even 30 miles a day, so it is. I guess the bottom line is everyone has to pick what works for them.
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    Quote Originally Posted by Swift View Post
    And some of us drive a lot more than 12, or even 30 miles a day, so it is. I guess the bottom line is everyone has to pick what works for them.
    I'm waiting for someone to create an online calculator pre-programmed with the vehicle's variables (hybrid premium, gas savings per mile, additional maintenance costs, subsidies/rebates, etc.), average vehicle loan rates, along with various state-specific factors (insurance, taxes, etc.), varying gas prices for each zip code, etc.

    Then, you simply enter your zip code, how much you're willing to put down (or check an "all" box), how many miles a year you drive, the type of terrain (hybrids really show their mettle in the mountains due to their regenerative braking), and a range of needs (personal transport, family car, trailer hauler, etc.).

    The calculator would bracket your needs then list the top five vehicles meeting your needs, along with payback period, cost, etc.

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    Quote Originally Posted by antoniseb View Post
    I lean to the green side, but what you are saying is true. Let's say the choice is between driving a paid-for 8 mpg truck and an 80 mpg 2010 Prius (not available yet). Let's say you'd be paying $500/month for car payments and extra insurance on the Prius, and that gas had gone up to US$10 per gallon. If all this came true you'd have to drive twelve miles a day or more to make it cheaper to drive the Prius. If the price of gas were US$5 per gallon you could go almost 30 miles a day before the Prius is cheaper.
    All this assumes that there is no monetary value in being green. Even if you end up paying more to have a hybrid, it might be worth the impact on the environment.

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    Quote Originally Posted by Amber Robot View Post
    All this assumes that there is no monetary value in being green. Even if you end up paying more to have a hybrid, it might be worth the impact on the environment.
    and just how much energy is used- and subsequent pollution caused- when a "green" hybrid car is built and shipped via diesel powered truck or railcar to the dealer?
    how does one factor that into the equation when considering their "carbon footprint" (a term i dearly despise) compared to keeping an older car on the road that might use more fuel and pollute a bit more?
    i bet you aint gonna see any sort of accurate online "green" calculator that takes it all into consideration on the Toyota or Honda websites any time soon- it might not make their "green" cars look so "green" after all..

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