When owning a hybrid begins to make cents
1) To make a statement
2) High gas prices
3) Tax credits
4) The environment
5) The thrill of using new technologies
As gas prices continue to rise, the viability of saving money by buying a hybrid becomes evermore realistic. So where's the tipping point? Reuters reports on a different study recently conducted by Edmunds in which they present actual savings for hybrid owners. Assuming you drive 15,000 miles per year, always fill up with gas costing $3 per gallon and received the maximum federal tax credits for your hybrid, a Toyota Prius or a Ford Escape Hybrid would show savings in about 3 years. If, instead, you opted for the hybrid version of the Saturn Vue, Toyota Camry or Honda Civic you would see those savings in about 6 years.
In adding to the study's assumptions, the break-even estimates were calculated with the notion that the consumer would have otherwise purchased the gas-powered version of the same car. In the case of the Prius, Reuters points to Edmunds' use of the gas-only Toyota Camry as a benchmark for comparison.
An article in Auto Industry points to a similar study conducted by Consumer Reports in April. They found that in most cases the combination of tax credits and gas savings failed to offset the additional cost of a hybrid over its gas-powered twin until about 5 years or 75,000 miles into ownership.
Future buyers of hybrids should also consider that federal tax credits are in a process of waning. On October 1st, buyers of Toyota hybrids will only receive half of the tax credit that is currently being offered. In April of 2007, those tax credits will be again reduced to 25%, and in October 2007, they will be eliminated completely. Yet as gas prices continue to rise, so will the gas savings of hybrid owners.
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