Hybrids Still May Not Be Financially Viable.

A recent Wall Street Journal article reported on the economic benefits to be found in buying a hybrid and from the looks of things there really isn’t much of anything.  The article states that:

Americans get a tax break for buying hybrids — the starting amount varies by model — but the more hybrids an auto maker sells, the smaller the tax break becomes on any hybrid models from that maker. After a manufacturer sells its 60,000th hybrid, the tax break starts to phase out

Well, in perfect world we wouldn’t need a government subsidy in the form of a tax break to make it make sense to buy a hybrid; but just in case you live in the same imperfect world I live in every little bit helps.

It seems that although hybrids are marginally more economical to operate due to the increased fuel efficiency; the higher sticker price tends to absorb any savings and then some.   For example:

Toyota’s Prius, which gets a leading 46 mpg combined but no longer qualifies for the tax credit, costs over $7,000 more than the auto maker’s compact Corolla. It would take nearly 18 years to recoup the premium, or more than twice the time you might expect to own it

They go on with a helpful chart that lets us know how equally disadvantaged the other hybrids in the group are. 

If we are going to depend on our government to make up the difference; well I don’t personally think that is the horse we want to bet on.  Now what may be  a more realistic plan is to start requiring better mileage and less emissions to the point that manufacturing has to keep up  to stay in the game but then we wind up with straining our already battered auto industry and inadvertently encourage more people to stick with older more polluting vehicles as they can now no longer afford a new car. 

I think the realist position is that if hybrids are in fact the answer; we aren’t there yet technology-wise.  The general population has proven time and again that in order for something like this to work it has to not put them at a financial disadvantage.  I always hope to be proven wrong on this.

2 thoughts on “Hybrids Still May Not Be Financially Viable.”

  1. I disagree with the article.

    I would consider buying a Prius, but I wouldn’t buy a Corolla. Maybe if they made a Camry that got gas mileage like a Corolla, then I’d shop that against the Prius. But the Corolla is not in the picture for me, so it isn’t a valid comparison.

    In fact, if Lexus made a hybrid that was really a gas saving hybrid that delivered substantially higher mileage than a regular Lexus, I would buy it. (But I am not interested in one of those hybrids that they make now, because they don’t get impressive gas mileage at all.)

    From the perspective of that article, I would be throwing away my money if I bought a theoretical high mileage Lexus and would “never get my money back.”

    But I don’t feel that it would be a waste of money at all to pay more to get a nice car that also had very high gas mileage.

    And as far as the post goes, people are buying the Prius like crazy, even though the tax credit thing expired for it. So people are definitely interested and willing to buy hybrids in the real world, as they are right now. (At least the high mileage ones like the Prius. It’s questionable if people really care about the other models that don’t deliver substantial improvements in gas mileage, like the discontinued Accord hybrid, for example.)

  2. With respect to the previous poster, I do not believe the issue is what you (personally) would do. The article is a factual recitation of the dollars and cents saved (or not saved) by purchasing a hybrid.

    If you personally want to spend thousands more on a vehicle than the cost of the gas you will save by purchasing such vehicle, good on you. But that decision does nothing to make the vehicle more economically feasible…and the truth is that most people base their purchasing decisions on the size of their wallets, not the size of their conscience or their heart.

    Now, there is certainly a point at which the price break makes sense…When gas is upwards of $8 per gallon, you can actually recoup the added cost of the vehicle in fuel savings. We’re just not there yet…apparently.

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