- Apr 25, 2006
Hybrid sales inelastic despite surging gas prices
Despite a conspicuous rise in gas prices over the last three months, the demand for hybrids isn't budging.
According to analysts cited in a new Reuters article, consumers aren't being swayed by increases in fuel economy, available tax credits and in some areas, high-occupancy vehicle (HOV) lane privileges that hybrid ownership offers. The reason? Most cite a reluctance to pay the up-front premium of around $3,000, while others believe would-be buyers are turned off by hybrid vehicles' added complexity and potential long-term costs.
Earlier this month, Consumer Reports magazine worked out ownership costs over five years and 75,000 miles for a number of hybrids, determining that only the Honda Civic Hybrid and Toyota Prius saved owners any money (the former scrimped just $400 and latter $300). More to the point, others cost thousands more over the long haul.
[Sources: Reuters; Honda UK]