Hybrids "Paying Off" More Quickly, New Edmunds Data Shows
May 08, 2008

By Bill Visnic

As gasoline prices go higher, many hybrid-electric vehicles currently on sale are proving to be even wiser investments, say new data from Edmunds.com.

Considerable past discussion about hybrids has focused on "payback" time, or the period required for savings from a hybrid's enhanced fuel economy to recoup the initial higher purchase price a hybrid commands. Detractors often claimed that, from a strictly fiscal view of hybrids, most vehicle purchasers would never save enough in gasoline costs to recover their investment in expensive hybrid technology.

But with every increase in gas prices, the hybrid payback time becomes consequently shorter - to the point where some popularly-priced hybrid models can pay back their owners' investment in as little as 18 months, according to the new Edmunds.com study.

That's the case with Toyota Motor Corp.'s Camry Hybrid, currently one of the nation's best-selling hybrid vehicles. Compared with a conventionally powered 4-cylinder Camry XLE, the Hybrid model costs $889 more, says Edmunds. But based on 15,000-mile-per-year driving, the Camry Hybrid saves $573, assuming gasoline priced at $3.61 per gallon. At that rate, owners can recoup their hybrid investment in just 18 months.

General Motors Corp.'s Chevrolet Malibu Hybrid also is a fuel-efficiency investment with relatively quick return. Edmunds data shows the extra $438 the Malibu Hybrid costs compared with a conventional 4-cylinder Malibu LT is returned in 2.7 years. Driving the Malibu Hybrid saves about $160 in fuel costs annually, Edmunds says.

For many hybrid buyers, it's never been about the money - hybrid ownership is an environmental statement. But many factors now are aligning to make purchase of a hybrid vehicle not so bad for the wallet, either.

"Environmentally conscious consumers have been drawn to hybrid vehicles since day one and were willing to pay a premium for them," said Jesse Toprak, Edmunds.com's Executive Director of Industry Analysis. "But now as a result of  lower price premiums, higher gas prices and, in some cases, tax credits, it won't take long for consumers to offset the price premium and actually save money by buying a hybrid - depending on which one they choose."

For Toyota, the nation's volume-leader in hybrid-vehicle sales, federal tax subsidies for buyers - which are tied to the number of hybrids sold - have long since disappeared. But many other automakers' models still qualify buyers for federal tax credits; the Edmunds payback data takes into account any applicable tax credits.

And what of Toyota's Prius, the most famous and most recognizable hybrid on the road? Prius has no non-hybrid counterpart, but Edmunds says compared with a 4-cylinder Toyota Camry LE sedan, a Prius returns its $3,489 hybrid "premium" in about 3.5 years, saving a customer who drives 15,000 miles annually a not-unsubstantial $989 each year - or about $82 per month.

Costlier hybrids, meanwhile, are better bought for their environmental feel-good rather than their economic merits. An extreme example is the LS 600hL from Toyota's upscale Lexus division: owners had better buy while they're young, because the LS 600hL requires 68.6 years to pay back the gigantic $18,630 it costs over the standard-powered LS 460L.

But the long-payback factor is not limited to premium-priced hybrids. Owners would have to hang on to GM's Saturn Aura Greenline hybrid for 16.2 years to recoup their investment in hybrid technology, and the Toyota Highlander Hybrid takes 12 years to return the extra cost of hybridization.

Posted by Michelle Krebs at 6:40 AM under Analysis , Featured , GM , Technology , Toyota | Comments (4) | digg this | Seed Newsvine

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