Hybrid cars are now worth the extra money!

[Evil Techie]

http://autos.canada.com/news/vancouv...a-637364d97d46

Hybrids now worth the extra money
Sure hybrids cost more, but with incentives, they're actually cheaper

Bob McHugh
The Province

Wednesday, June 07, 2006


Drivers thinking about switching to a more environmentally friendly vehicle, but wary of higher hybrid price tags, may be pleasantly surprised.

What a difference a year makes!

Last year, only one hybrid vehicle appeared to be a cost-effective purchase, based on a BCAA five-year ownership cost analysis.

This year only one of the hybrid vehicles evaluated proved to be a money-loser.

Why the quick turnaround?

If you guessed the price of gasoline -- duh -- you're correct, but there's more.

The showroom purchase price difference between a new hybrid and its gasoline counterpart also appears to be shrinking -- rapidly!

The analysis compares the purchase and operating costs of hybrids with comparable gas-powered models over a five-year period. It reveals that, although a hybrid costs more to purchase, over a five-year ownership period, it generally ends up being cheaper.

An average Honda Accord V6 owner is paying a least $370 more for gasoline this year than last year and probably more, if more than 50 per cent of the driving is in the city.

Over five years that really adds up and if the cost of gasoline continues to rise -- did I say if? -- a hybrid is going to look even more attractive.

Three new hybrid vehicles were added to the cost study this year and the second generation Honda Civic Hybrid is also completely new. The latter is a good example of the shrinking cost differential on a new vehicle purchase.

The BCAA figures from last year showed a before-tax $7,315 difference between Civic and Civic Hybrid. The '06 Civic Hybrid, however, is only $2,520 more than its similarly equipped gasoline version -- that's a $4,795 saving over last year. Add the tax and financing incentives that hybrids currently enjoy and you're already ahead of the game -- before you even put a drop of high-priced gasoline in the tank.

Another new hybrid that offers outstanding value is the all-new Toyota Camry Hybrid. Bigger than the Prius, it has a similar hybrid

drivetrain, but it produces the equivalent of 187 horsepower, and it costs less. And the pre-tax cost difference with a comparable gasoline-only Camry is less than $4,000.

Strangely enough, the biggest, most expensive hybrid in the study, the Lexus RX400h, also provided the largest cash return, $4,463.

The first reason for this is that it partially escaped the luxury sales tax premium, due to a $7,000 taxation rate adjustment allowed for hybrid vehicles over $55,000. And secondly, the more you borrow from VanCity at prime, by using its "Clean Air Auto Loan," the more you save.

With all these factors in play over five years, six out of seven hybrids worked out to be cheaper. BCAA cites shrinking purchase price differentials and higher fuel costs as the main reasons most hybrids are more affordable over the longer term.

The BCAA hybrid vs. conventional cost analysis assumes:

n gasoline cost of $1.15 per litre

n financing 80 per cent of total purchase cost and taxes, over five years

n neutral maintenance costs

n long-term depreciation and resale values remain unknown, so they are assumed to be neutral.

The use of hybrid power for transportation is not a new idea -- the old semi-electric pedal cycle comes to mind. When electrical power got low, you pedalled for a while until the bike built-up enough electrical energy for its electric motor to take-over and propel it again.

Although immensely more complex, today's hybrid vehicle essentially works in a similar way -- the big difference being that a gasoline engine does the pedalling for you.

It's not a zero-emissions vehicle but it's darn close, the fuel savings are considerable and the results are in -- it's now a cost-effective purchase.

In a recent BCAA poll, 62 per cent of members surveyed said they would be "very or somewhat likely" to consider purchasing a hybrid if the price was only 15 per cent higher. If hybrids and conventional vehicles were priced the same, the percentage of likely purchasers jumped to 78 per cent.

Bob McHugh is the Senior Technical Advisor at BCAA

- - -

2006 HYBRID COST STUDY

---- Honda ---- ---- Honda ---- ---- Ford ---- ---- Toyota ---- ---- Lexus ---- ---- Toyota ---- ---- Toyota ----

Civic Civic Accord Accord Escape Escape Matrix Prius RX330 RX400h Highlander Highlander Camry Camry

EX Hybrid EX-V6 Hybrid XLS Hybrid XR Auto Hybrid Premium Hybrid AWD V6 Hybrid SE Auto Hybrid

4 dr sedan 4 dr sedan 4 dr sedan 4 dr sedan 2wd 2wd 4 dr Hbk 4 dr Hbk 4 dr Hbk 4 dr Hbk 4 dr Hbk 4 dr Hbk 4 dr sedan 4 dr sedan

Vehicle Purchase Price (MSRP) 23,430 25,950 34,100 37,990 26,009 33,595 25,835 31,280 56,900 62,200 37,885 44,205 27,950 31,900

Freight and PDI 1,225 1,225 1,310 1,310 1,200 1,200 1,140 1,240 1,775 1,775 1,390 1,390 1,240 1,240

Net Purchase Price 24,655 27,175 35,410 39,300 27,209 34,795 26,975 32,520 58,675 63,975 39,275 45,595 29,190 33,140

PST (see note 5) 1,726 1,902 2,479 2,751 1,905 2,436 1,888 2,276 5,868 5,758 2,749 3,192 2,043 2,320

GST 1,726 1,902 2,479 2,751 1,905 2,436 1,888 2,276 4,107 4,478 2,749 3,192 2,043 2,320

less PST Credit 1,902 2,000 2,000 2,000 2,000 2,000 2,000

Total Cost of Acquisition 28,107 29,078 40,367 42,802 31,018 37,666 30,752 35,073 68,650 72,211 44,774 49,978 33,277 35,780

Down Payment (20%) 5,621 5,816 8,073 8,560 6,204 7,533 6,150 7,015 13,730 14,442 8,955 9,996 6,655 7,156

Amount Financed (80%) 22,485 23,262 32,294 34,242 24,815 30,133 24,601 28,058 54,920 57,769 35,819 39,983 26,621 28,624

Finance Rate (%) 8.75% 5.75% 8.75% 5.75% 8.75% 5.75% 8.75% 5.75% 8.75% 5.75% 8.75% 5.75% 8.75% 5.75%

Length of Finance (Term Months) 60 60 60 60 60 60 60 60 60 60 60 60 60 60

Monthly Finance Payment 464 447 666 662 512 579 508 539 1133 1110 713 741 549 550

12 Month Cost 5,568 5,364 7,992 7,944 6,144 6,948 6,096 6,468 13,596 13,320 8,556 8,892 6,588 6,600

60 Month Cost 27,840 26,820 39,960 39,720 30,720 34,740 30,480 32,340 67,980 66,600 42,780 44,460 32,940 33,000

Fuel Consumption (Litres per 100 km, 50/50 Highway/City Split)) 6.85 4.75 9.25 6.9 9.75 6.8 7.4 4.1 10.9 7.6 10.9 7.8 8 5.7

Total Annual fuel consumed (litres) 1,370 950 1,850 1,380 1,950 1,360 1,480 820 2,180 1,520 2,180 1,560 1,600 1,140

Total Annual fuel cost 1,576 1,093 2,128 1,587 2,243 1,564 1,702 943 2,507 1,748 2,507 1,794 1,840 1,311

Annual Total Cost 7,144 6,457 10,120 9,531 8,387 8,512 7,798 7,411 16,103 15,068 11,063 10,686 8,428 7,911

Hybrid Savings per Year 687 589 -126 387 1,035 377 517

Five Year Total Costs 41,339 38,098 58,671 56,215 48,136 50,093 45,140 44,070 94,245 89,782 64,270 63,426 48,795 46,711

Hybrid Savings over 5 Years 3,241 2,456 -1,957 1,071 4,463 844 2,084

Max Finance amount at low interest 75,000

Prime 5.75%

Typical Lending rate (+3.0%) 8.75%

Finance Term 60

Annual Driving distance (km's) 20,000

Fuel Price per litre $1.15

NOTES AND ASSUMPTIONS:

1) MSRP and PDI information from CAA Autofusion Automaker program on www.bcaa.com

2) Finance rates from Vancity Clean Air Auto Loan program. Low interest quoted at prime.

http://www.vancity.com/Personal/Borr...alOptions/Clea nAirAutoLoan

3) Monthly payment calculation based on Total cost of acquisition fully financed.

Calculated on Loan Payment Calculator on www.bcaa.com

4) Fuel consumption data from National Resources Canada - 2006 Fuel Consumption Guide Fuel consumption rate based on straight 50/50 average

5) Lexus RX400h - PST tax rate of 9% after $7,000 adjustment.

6) The Toyota Matrix/Prius comparison used because of 4-door hatchback design and measurement similarities.

[gordholio]

I don't believe some of the mileage figures quoted by manufacturers of gas-electric hybrids. What I've read from actual car owners is they don't get the astronomical mileage that is promised.

[konfusion666]

I don't believe some of the mileage figures quoted by manufacturers of gas-electric hybrids. What I've read from actual car owners is they don't get the astronomical mileage that is promised.

You'll still get better mileage than the comparable gasoline vehicles.
How much better? It depends on the particular hybrid in question.
I know that the Prius'es were a notch above a 2-door Echo hatch.
(referring to real-world figures determined by ConsumerReports)

[Bullseye]

The mileage claims for non-hybrids are also not real-world numbers, so it probably all works out on balance.

It's not surprising that prices are coming down, it's no different than with any new high tech gadget, it gets cheaper over time. The early adopters of any new technology are the ones who pay the R&D costs of it.

[Evil Techie]

actually, hybrids have sort of a break-in period where their mpg is a bit low

it gets up once about 5000~10000 km has been put in gently
then it seems that mpg does go up a bit more and closer to EPA estimate according to lots of prius and lexus forum members

of course it wont get to EPA
nor usually will a gas car get up to EPA so dead on

[seftonm]

Apparently gas electric hybrids get slightly more inflated numbers from the EPA than regular combustion powered vehicles. When the test system is revised, gas electric hybrids will have a proportionally bigger drop in fuel economy numbers than non hybrids.

[x21hx]

hmm..when I did my calculations it would take me 10 or 15 more years to get its value back...

but my assumptions were different...

I can't remember exactly...but it was something with financing 30% of it...12000km annually $1/L for gas.... of course I'm sure those numbers aren't the norm...but for us...we wouldn't benefit from it since we don't put too many km on it

[Piro21]

I don't believe some of the mileage figures quoted by manufacturers of gas-electric hybrids. What I've read from actual car owners is they don't get the astronomical mileage that is promised.

A lot of car owners really don't know how to drive all that well, especially to conserve fuel. I'm willing to bet that a sizeable percentage of those who aren't getting the stated mileage are those who always floor it from a dead stop and speed like crazy.

[Evil Techie]

A lot of car owners really don't know how to drive all that well, especially to conserve fuel. I'm willing to bet that a sizeable percentage of those who aren't getting the stated mileage are those who always floor it from a dead stop and speed like crazy.

for sure
or carry around heavy stuff in the car the whole time

sometimes i can squeeze out 30mpg on avg on hwy out of my GS300 thats rated at around 27mpg on hwy

[FastFokker]

The problem I hold is all the extra fuel and energy that goes into making the extra systems to save on fuel and energy in hybrids.

It's a large contradiction.. I'm not saying it's a step in the right direction, but hybrids are really flopping.. they aren't the saviour we thought they would be.

We've got to come up with something better and brighter.. and so far, nothing is ideal.

[Bullseye]

hmm..when I did my calculations it would take me 10 or 15 more years to get its value back...

but my assumptions were different...

I can't remember exactly...but it was something with financing 30% of it...12000km annually $1/L for gas.... of course I'm sure those numbers aren't the norm...but for us...we wouldn't benefit from it since we don't put too many km on it

This is the key point, everyone who isn't buying a hybrid for environmental reasons (and that's a good reason alone) needs to do their own calculations. If you're only driving 12,000km per year, then I think gas would have to go substantially higher still before it becomes economically viable to go hybrid.

The average driver puts far more km's on, and the more you do, the more appealing it becomes.

[konfusion666]

The problem I hold is all the extra fuel and energy that goes into making the extra systems to save on fuel and energy in hybrids.

It's a large contradiction.. I'm not saying it's a step in the right direction, but hybrids are really flopping.. they aren't the saviour we thought they would be.

We've got to come up with something better and brighter.. and so far, nothing is ideal.

People are (considering) buying the hybrids for economical reasons, not tree-hugger reasons.

"Flopping" as what? They have always been a commercial product, not a idealogical answer to pollution (such a thing does not and will not exist). If it's a commercial product, for it to flop you must show that they're not generating profit...

[Evil Techie]

People are (considering) buying the hybrids for economical reasons, not tree-hugger reasons.

"Flopping" as what? They have always been a commercial product, not a idealogical answer to pollution (such a thing does not and will not exist). If it's a commercial product, for it to flop you must show that they're not generating profit...

i have a friend in washington, she bought the prius to save the environment
shes pretty well off but they are now looking into buying a second hybrid car for its environmental reasons

so yeah there are still a lot of ppl out there buying hybrids to get the ultra super low emission status and help out mother earth a bit

if ppl really want to save money and not care about the environment, they would buy more diesels instead of hybrids

[seftonm]

A lot of people can't see past their own exhaust pipe when it comes to emissions. Well-to-wheels analysis reveals that diesels are on par with gas electric hybrids for emissions. Biodiesel blends will help reduce emissions even more.

[gordholio]

i have a friend in washington, she bought the prius to save the environment
shes pretty well off but they are now looking into buying a second hybrid car for its environmental reasons

so yeah there are still a lot of ppl out there buying hybrids to get the ultra super low emission status and help out mother earth a bit

if ppl really want to save money and not care about the environment, they would buy more diesels instead of hybrids

The people that buy hybrids are people who are generally middle income or higher.
For the average person, they are on the expensive side.
Maybe as they make more of them, the prices will come down to the same as a regular car.