When will my hybrid car start to pay for itself?

Sticker prices for hybrid cars mean some pay for themselves right away, including the Lexus NX 350 and Toyota Highlander.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

UPDATED: Jun 29, 2022

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Here's what you need to know...

  • Hybrid cars have better mileage per gallon (MPG) than their gas-only counterparts
  • The sticker price for hybrid cars is often greater than for gas-powered vehicles
  • You can save money quickly with a hybrid, if not right away

Do hybrid cars pay for themselves over time? The answer is generally yes, but how long will that take? The prices for hybrid cars differ greatly, and some are more expensive than others, especially compared to their gas-only versions.

Comparing a few vehicles can give you an idea of how much you can save with a hybrid and how long it will take to make up the sticker price versus the cost of gas.

When will my hybrid car start to pay for itself?

Even if your hybrid gets a lot of miles per gallon, the difference in sticker price might mean it could take a while to make up the cost. 

For example, the Nissan Leaf advertises an impressive 99 MPG but has an average cost of $32,000, compared to the Honda Insight, which gets 40 MPG but only costs an average of $26,855. You’d have to save $5,145 in gas before the Nissan Leaf made up the cost difference. 

The average American spends $2,053 on gas every year. This means it would take an average of about two and a half years before the two vehicles broke even.

Of course, the cost of gas may not apply to you if you drive significantly less than the average person. Depending on your gas needs, you may make up the difference a lot sooner than the estimated two to three years. 

It’s important to take into account how much you pay for gas every year to determine whether the high sticker price is worth the better MPG.

While you’ll be saving on fuel costs, you might also be wondering if you can save on insurance costs. However, you’ll need insurance for a hybrid vehicle, same as for a gas-only car. Hybrids are not exempt from car insurance requirements.

What about tax incentives?

One bonus reason to get a hybrid over a gas-only vehicle is the tax breaks, which you can get at both a federal and state level. You won’t automatically qualify for a tax write-off for owning a hybrid, but you might be eligible for a tax credit on your return.

The amount you can get back is far from negligible — you can receive up to $7,500. However, not everyone is eligible. For example, the credit only applies to primarily electric hybrids, meaning they have to plug in to recharge. Even then, not all vehicles apply.

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Comparing the Prices of Hybrid Cars

When comparing the price of hybrid cars to gas-only, is the added cost worth it? To determine this, look at a few popular 2022 gas-only models with their hybrid counterparts:

  • Hyundai Sonata SEL
  • Lexus NX 350 AWD
  • Honda Accord Sport/Touring Sport
  • Toyota Highlander AWD LE

Each of these vehicles has something in common in that they all have a gas and a hybrid version.

Hyundai Sonata SEL

This vehicle stands out for just how long it would take to make up the difference in fuel costs. After all, with a $3,850 sticker price difference between the gas-only and hybrid models, and a $740 annual difference in gas savings, the gas savings would take 5.2 years to catch up. 

The Hyundai Sonata SEL gets an average of 31 MPG, and its hybrid version gets 47 MPG. This means that the hybrid Hyundai Sonata SEL does a comparably poor job of making up its cost compared to other hybrid vehicles.

Lexus NX 350 AWD

The Lexus NX falls at the opposite end of the spectrum. This model makes up for its cost right away because the hybrid model costs merely $500 less than its gas-only counterpart. With an average of 25 MPG for the gas-only version and 39 MPG for the hybrid, you stand to save an average of $1,129 a year at the pump.

Making up the cost difference between these two vehicles hardly even applies, as you’re saving more money by getting the hybrid version within a few months of driving it off the lot.

Honda Accord Sport/Touring Sport

Take a look at something a little more in the middle. The immediate price advantage for the gas-only version of the Honda Accord Sport versus the hybrid comes out to $2,090. The difference in mileage is 26 to 43 MPG, respectively, meaning you save about $1,024 a year on gas.

Running all the numbers, it’ll take about two years even to make up the price difference between the vehicle and gas money.

Toyota Highlander AWD LE

With a $1,450 MSRP difference, you’re not looking at a very large sticker price advantage for the gas-only version of the Toyota Highlander. The MPG compared to the hybrid is notably unalike, however, with 23 MPG for the gas-only type and 35 MPG for the hybrid. You’ll save about $1,004 a year on gas with the hybrid.

This means it’ll take about 1.4 years before the gas price makes up for the MSRP. Compared to others, this vehicle pays itself back relatively quickly. Moreover, Toyota Highlander insurance rates are lower than average, saving you even more.

What You Need To Know About the Prices for Hybrid Cars

You could be in the market for a hybrid for any number of reasons. In addition to being fuel-efficient and economical, they’re better for the environment. 

Even if that’s not a factor for you, as the difference in sticker price between gas and hybrid cars narrows, the overall prices for hybrid cars decrease. Thus, the MPG advantages among hybrids grow. You may discover that a hybrid typically pays for itself quickly, if not right away.

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