Hybrids: Don't Buy the Hype

Here is a informative article on CNN as to the hard reality of why hybrids will NOT save you money.

I've been saying this since 2003 when hybrids were really starting to become popular and I realized that they were not a sound financial investment.

Yes, they make a certain social statement. Yes, they are good for the environment. However, they are usually a few thousand dollars more than a comparable gas-only car because you are basically paying for the new technology and the R&D, which seems to be the only explanation as to why they cost more. The other thing is, who knows what the resale value of hybrids are?

A friend of mine just bought a Honda Civic hybrid. According to the article, the total cost of ownership (TCO - real car value, insurance, and maintenance) is $3800 more than the gas Civic.

Now let's say that the Civic gets 32 mpg and the hybrid gets 50 mpg (giving it the benefit of the doubt to the hybrid). Given that equation, if my friend drives 1000 miles a month and is paying $2.75 a gallon, he's paying $55 a month, vice $86 he would pay with a gas Civic. So he's saving $31 a month on gas.

It would take him 10 years to make up $3800 in gas savings, and that is just breaking even.

That's not saving money and I don't have the heart to tell him.

Reading the article, it's not as cut and dried as these simple equations, but it's just an example. There are gas price fluctuations, you could get a good deal on a hybrid, tax deductions for hybrids, etc.

If you're going from a big honkin' Ford Excursion to considering a hybrid or any sedan for that matter, then it's a different story.