In fact, it’ll cost you an estimated $8,155 more to own over the course of five years. That’s because paying about $2,700 less at the pump for the 8 mpg (EPA combined) doesn’t even come close to negating the GS450h’s higher sticker price and steeper anticipated decline in resale value, among other factors.
The data comes from the cost-of-ownership authority Vincentric. And the example serves as an illustration that some knee-jerk responses to go with hybrids to save money might be misguided—unless you really consider the full picture, and how much you save on the hybrid over the years you own it.
A hybrid could save you money—if you pick the right one
Hybrid models, versus non-hybrid equivalents, will shrink your fuel budget, of course—saving you an everage of $2,895 over five years, according to the ownership data firm Vincentric. They’ll also, in many cases, cost less to insure than their non-hybrid counterparts. They typically won’t cost any more to maintain; and in some cases they’re more reliable than the non-hybrids.
The wake-up call comes in all those other factors: Because they cost so much more, initially, in some cases even years later any money saved at the pump still hasn’t offset their much higher sticker price. And hybrids won’t in all cases command the trade-in value that has you saving money in the end.
Vincentric just finished its third annual Hybrid Analysis, and found that only one third (10 of 31) of hybrid vehicles actually save owners money—versus if they’d purchased a standard version of the same vehicle, or a ‘gasoline-equivalent’ vehicle.
Fewer hybrids are paying off in the long run. Why?
The firm had done a similar comparison twice before, and found that the percentage of cost-effictive hybrids has fallen, from 44 percent in 2012 and 29 percent in 2013 to around 32 percent this year.
The primary reason: The price of fuel is dropping. According to the U.S. Energy Information Administration (EIA), the average pump price of regular-grade gasoline has fallen to just $3.17, down from $3.34 in October 2013 and $3.75 in October 2014. This isn’t just a monthly blip; on an annual basis, the average pump price will factor in at well under $3.50.
On a secondary basis: Hybrids aren’t getting any cheaper. The price differential between hybrids and non-hybrids hasn’t been tightening. This runs counter to what industry analysis anticipated many years ago: that eventually, the additional cost of a hybrid would lessen, to a point at which hybrid models would be no-brainers.
“In some cases, fuel cost savings associated with hybrid vehicles are able to offset their price premium,” said Vincentric president David Wurster. “However, hybrids are losing their competitive edge due to the improved fuel economy of gas-powered combustion engines and falling fuel prices,”
Mainstream models becoming more miserly
And that’s another important point. With engine downsizing, as well as engine technologies like turbocharging and direct injection, mainstream gasoline models have become far more fuel-efficient than they were just a few years ago. That’s effectively pushed most ‘mild hybrid’ models, like the Honda Insight, out of the market, and it’s made some of those hybrid versions a tougher calculation.
Cribbing from Vincentric’s list, removing the models that don’t have direct gasoline-powered U.S. counterparts, click on to see the list of eight hybrids that pay off. The calculations relate to 2014 models, but we’ve given some insight as to how they’ll carry into 2015.