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Hybrid Vehicles: What You Should Know

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Do the Benefits Outweigh the Cost?

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Deciding between a hybrid and a traditional vehicle can be a tough call. While hybrids are appealing because of their fuel efficiency, the higher prices can be a deterrent. Before buying, there are several factors to consider, including whether the benefits of owning a hybrid outweigh the costs.

The Price Factor

Sticker price is a key factor when it comes to purchasing a hybrid. Most hybrids can cost between $3,000 and $8,000 more than their gasoline-powered counterparts. The main reason is because of the cost of the battery that serves as a complement to the motor.

The upside to purchasing a hybrid, of course, is the gas mileage. A hybrid can average between 33 and 60 miles per gallon during city driving and between 27 and 68 miles per gallon in highway driving. Depending on how much you drive, that could add up to significant savings at the gas pump. Still, it's worth noting that many conventional cars also have good gas mileage, so this is not the only factor to consider.

While the price of a hybrid is higher than a regular car, owners may be able to recoup some of the cost with tax credits. These may average between $2,000 to $3,000. Those who buy hybrids often find other perks to owning these cars and possibly some hidden savings, too. Some insurance companies offer discounts to hybrid owners because research shows they have a lower risk of being involved in an accident than drivers of non-hybrid vehicles. Some states have even allowed hybrid vehicle owners to use carpool lanes when they travel solo.

Regarding vehicle maintenance, the difference in cost between the two vehicles appears to be nominal. There actually may be less engine wear with a hybrid because it shuts down during idling. Also, when coming to a stop, the electric motor slows the vehicle, taking strain off the braking system.

A Cost-Benefit Analysis

If you're considering a hybrid purchase, you may want to take into consideration the expected amount of time and distance you are actually going to be driving the vehicle. If you are just going to be tooling around town, the higher cost of a hybrid may not be worth it in your situation, even though the fuel efficiency is a draw.

Given these caveats, if you think you'll get your money's worth, if it makes you feel good to help the environment, or if you like the look and feel of a sleek non-conventional car, then the hybrid may be just the vehicle for you.

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.


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