When will my hybrid car start to pay for itself?
Sometimes hybrid cars can pay for themselves instantly. Additionally, hybrid cars pay for themselves by saving you up to $76/mo in gas costs and earning you car insurance discounts up to 10% for driving green.
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UPDATED: Jun 17, 2020
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- There are some hybrid vehicles that are priced so low, they pay for the price difference between themselves and a traditional new car instantly.
- If the hybrid vehicle you’re looking at has a high sticker price, it’s going to take a long time to make up the cost no matter how great the mileage is.
- Other ways to conserve fuel include carpooling and taking public transportation.
Should you buy a hybrid car? Will you save money?
Hybrid sales are skyrocketing. Whether they’re the plug-in models or gas engine/battery mixtures, people are looking at them not just because they love the planet, but because they love their wallets: the higher gas prices rise, the better that high MPG sounds.
Drivers justify the extra cost by saying their gas savings will make up the difference … but is that true?
If you are wondering if buying a hybrid is worth it, then be sure to:
- Read the below research on hybrid car costs
- Read through our article on hybrid car insurance rates
- Enter your ZIP code into the FREE tool on this page for free hybrid car insurance quotes (and free car insurance quotes for ALL types of cars to make comparison shopping easy!)
We crunched the numbers and the results are… pretty surprising!
How long before the extra hybrid cost pays for itself in gas savings (in years)
Let’s start with our hybrids: we chose the five most popular:
- The Toyota Prius
- The Nissan Leaf
- The Honda CR-Z
- The Honda Insight
- The Ford Fusion
Next, we calculated the average cost of an American car by averaging the new and used costs, which gave us about $18,000. Then we subtracted that from the base sticker price, giving us how much more these vehicles run you.
Next, we had to figure out what your average American pays in gas.
We took the average gas price as of this writing ($3.91), the average number of miles Americans drive in a year (12,000, according to the EPA), and the average mileage of an American car (22.5 MPG).
Crunching those numbers, we came up with an average (right now) of $2053 in gas costs a year. Then we compared that to the hybrid’s gas costs, subtracted the difference, then saw how long it would take for those gas savings to make it up.
1. Honda Insight (Pays For Extra Hybrid Cost Instantly)
The big winner is the Honda Insight: It’s a whopping $10,000 below the average price of a new car in America.
Even better, the gas savings are pretty good, too: it gets 40 MPG and saves you $912 in gas per year. Keep it on the road for twenty years and it will literally pay for itself. Click here to read more about the Honda Insight car insurance rates.
And remember: that’s before any tax incentives for purchasing a hybrid. If you’ll pardon the pun, it doesn’t take much insight to see what the best deal is here.
2. Honda CR-Z (Pays For Extra Hybrid Cost in 1 Year)
Only costing a thousand more than the Insight, The CR-Z’s price makes up for it having the worst gas mileage of the five cars we studied: you’ll make back the difference in the space of a year.
3. Toyota Prius (Pays For Extra Hybrid Cost in 4 Years)
Smack in the middle is the best-selling Toyota Prius. Although the price is a little higher, $23,000 is still below the national average for a new car, and the Prius gets the second best mileage out of all of the cars.
It’ll take four years, but your Prius will pay off the difference. Click here to read more about the Toyota Prius car insurance rates.
4. Nissan Leaf (Pays For Extra Hybrid Cost in 9½ Years)
Fourth place goes to the Nissan Leaf. If that seems a little surprising, what with its highly-toted 99 MPG and, er, no gas costs, that’s because the Leaf has a $32,000 sticker price.
But you can save $1,500 a year in gas, and it’ll pay the difference in two years. Also, tax incentives can knock that price down by up to $7,500. But taken on its own, especially with its short range, it’s just not a good deal for most people.
5. Ford Fusion Hybrid (Pays For Extra Hybrid Cost in 11 Years)
Last and deservedly least is the Ford Fusion Hybrid. The 41 MPG is very good, but that high sticker price makes it a terrible deal in terms of payoff.
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So, who should buy what?
First things first: look into the tax incentives that you qualify for, as those can knock off a big chunk of the price. There are federal incentives, but individual states offer them as well, and you can get some great deals.
But, in the end, it’s really no contest. For heavy to moderate drivers, the Insight is a clear winner. 40 MPG may be low, relatively speaking, but the savings do add up quickly and it’ll fill the needs of most people quite handily.
For people who don’t drive far from home, it makes more financial sense to pick up a used car with good MPG than it does a hybrid, and, if you want to save the planet, work on reducing the amount you drive by taking public transit and carpooling.
That way you’re recycling instead of creating demand for new products, reducing the total amount of gasoline burned, and being frugal.
If you only drive in a city and other low-speed areas and don’t need a lot of room, consider a Smart Car: at 33MPG and a $10,000 base price, it saves the Earth and your wallet.