EXECUTIVE SUMMARY

 

Vincentric's November 2009 hybrid analysis showed that none of the 28 hybrids measured had total cost of ownership that was lower than their all gas counterparts,.  The 2009 Toyota Camry Hybrid had the best results, with buyers of that vehicle only expected to spend an additional $720 over 5 years when compared to the all gasoline powered version of the Camry.

 

The average price premium for a hybrid was $9,068, with average fuel cost savings of $2,757.  When all costs to own and operate a hybrid were taken into account, the average cost of ownership for hybrids was approximately $6,200 more than the all-gasoline powered counterparts.  The range between the best and worst savings was significant, with the 2009 Toyota Camry Hybrid costing buyers an additional  $700 while the Lexus LS 600h L hybrid cost buyers over $22,000 more to own.

 

 

NOVEMBER 2009 HYBRID ANALYSIS

 

There are many different approaches for comparing hybrids to their all gas counterparts.  At Vincentric, we prepare three different reports each month to help users to understand the financial dynamics of hybrid vehicles.  By doing so, we enable users to better understand the expected costs (or savings) of driving a hybrid, resulting in the ability to make a more informed decision when considering the purchase of a hybrid vehicle.

 

Fuel prices used in these reports are based on a weighted average over the past five months, so you may notice that they don't necessarily reflect current prices during times of rapid fuel price changes.  This is done to help ensure that the analysis reflects current market trends and not market extremes.

 

The reports assume 15,000 miles are driven annually, and the vehicle is owned five years.  It is also worthwhile to understand that the numbers shown are US averages, although the same analysis can be done for any state or the District of Columbia.

 

The three reports below use data from our November, 2009 database update.

 

• COST OF OWNERSHIP and FUEL COST COMPARISON
• TAX CREDIT COMPARISON
• VALUE COMPARISON 

 

 COST OF OWNERSHIP AND FUEL COST COMPARISON

There has been much debate over whether premium price hybrid vehicles command can be financially justified.  In this month's analysis, there were not any hybrids that can be financially justified purely based on the total cost of ownership numbers. 

However, for those whose purchase of a hybrid is based upon minimizing the environmental impact and not strictly financially driven, the reports can identify viable vehicles.  This month, the following hybrid vehicles were shown to have incremental costs of less than $2000 over 5 years, or less than $33 per month.

 

• 2009 Toytoa Camry Hybrid buyers are only expected to pay an additional $720 over 5 years to minimize their environmental impact.
• 2009 Chevrolet Malibu Hybrid buyers who are only expected to pay an additional $1181 over 5 years to minimize their environmental impact.
• 2009 Saturn VUE Hybrid buyers are only expected to pay an additional $1798 over 5 years to minimize their environmental impact.

 

 

Fuel Savings

 

In addition to carbon emmission improvements, hybrids are know for thier improved fuel economy.  The five models that provide the greatest benefit over their gas only counterparts are:

 

• 2009 Cadillac Escalade Hybrid 2WD versus 2009 Cadillac Escalade ESV 2WD ($5,865fuel cost savings)  Note:  The 4WD had similar savings.
• 2009 Chevrolet Silverado 1500 Hybrid 2WD versus 2009 Chevrolet Silverado LT 2WD ($3,479fuel cost savings)
• 2009 GMC Sierra 1500 Hybrid 2WD versus 2009 GMC Sierra 1500 SLE 2WD ($3,479 fuel cost savings) 2009 Chrysler Aspen Limited Hybrid 4WD versus 2009  Chrysler Aspen Limited 4WD ($3,379 fuel cost savings)
• 2009 Chevrolet Tahoe Hybrid 2WD versus 2009 Chevrolet Tahoe LT 2WD ($3,227 fuel cost savings)
• 2009 GMC Yukon Hybrid 2WD versus 2009 GMC Yukon 2WD ($3,227 fuel cost savings)
• 2009 Dodge Durango Limited Hybrid 4WD versus 2009 Dodge Durango Limited 4WD ($3,099 fuel cost savings)

 

  

Of course for those who are looking to minimize fuel purchases, it is important to know the hybrid vehicles with the lowest overall fuel costs.  They are:

 

• 2009 Toyota Prius Base  (5-year fuel costs of $4,573)
• 2009 Honda Civic  Hybrid  (5-year fuel costs of $5,061)
• 2010 Ford Fusion Hybrid ((5-year fuel costs of $5,522)
• 2010 Mercury Milan Hybrid ((5-year fuel costs of $5,522)
• 2009 Nissan Altima Hybrid  (5-year fuel costs of $6,255)
• 2009 Toyota Camry Hybrid  (5-year fuel costs of $6,372)

 

The chart below shows further detail regarding the items related to cost of ownership and fuel consumption for each hybrid.  In addition, by clicking on the vehicles names in the chart, you will see a detailed comparison of the two vehicles.

 

The three numbers provided in the summary chart for each vehicle are:

 

1.  The Price Premium - This shows how much more you pay for the hybrid.

 

2.  Cost of Ownership Differential - This shows how much more (or less, if a negative number) it will cost to own and operate the hybrid compared to a similar all-gasoline powered vehicle.

 

3.  Fuel Cost Differential - This shows the fuel savings obtained by the hybrid.  Buyers often only look at fuel savings due to its reduction in the use of petroleum, although from a strictly financial perspective the Cost of Ownership differential is the relevant number. 

 

 

TAX CREDIT COMPARISON

Hybrids also benefit from federal tax credits. The following chart shows the estimated tax credits for each of the hybrid vehicles. This government gift is a major reason that some hybrids outperform their counterparts when calculating the overall cost of ownership.

 

It should be noted that once a manufacturer sells 60,000 qualifying vehicles, the tax credit is phased out over a period of fifteen months for vehicles produced by that manufacturer. Because  as a manufacturer Honda and Toyota have each sold over 60,000 hybrid units, credits have been completely phased out for the Honda, Toyota and Lexus (manufactured by Toyota) hybrids.

 

  
VALUE COMPARISON

In addition to simply measuring the cost to own and operate vehicles, Vincentric also measures overall value. With this approach, we first determine how much ownership costs are expected to be for a vehicle at a specific price point, within a specific segment.  Hybrids were measured against other vehicles in their segment, regardless of whether or not the vehicle was a hybrid or a all-gasoline powered vehicle.  For more details on this approach for determining value, click here.