Ugh. This is a picture of what it cost me to fill up my car the other day. You’d think that a sensible girl like me with a knack for saving money would be rushing out to trade in my gas guzzling SUV for a hybrid or electric car. I’m not. And I don’t think you should either.
Do It Without Savings
Retirement becomes an afterthought for many people when they think about all the bills they have. There’s the mortgage, car payment, insurance, and all the other day to day expenses.
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I bet you didn’t expect me to say that. It goes against everything the media has been telling us over the last eight years since the first hybrid car was mass produced.
Don’t get me wrong, the idea of a hybrid or electric car is a good idea. Any kind of car that reduces our dependence on foreign oil is a good thing.
But as with any new technology, being an early adopter is an expensive hobby. The people that bought the first home computer, cell phone, digital camera, mp3 player etc. all paid a premium to be among the first to own one. As with any first edition the company behind the product is still working out all the bugs, the next one will be better.
It’s the same story with hybrid and electric cars. Even though they’ve been around for almost a decade now the technology is still in its infancy. We have not seen how far the car manufacturers can push these alternatively fuelled vehicles yet. That’s why if your only motivating factor to purchase one of these cars is money, hold off on buying one.
The big question is whether a hybrid or electric vehicle’s premium price is worth it given the amount of fuel you’ll save. Generally, hybrid and electric cars are about 20% more expensive than their gasoline powered counterparts. So is it worth it to pay more upfront to offset more of a savings at the pump? Let’s do a comparison. All of the following data I found on Honda.com.
A 2011 Honda Civic Sedan has a MSRP (manufacturer’s suggested retail price) of $15, 805. It gets 28 mpg (miles per gallon) in the city and 39 mpg on the highway.
The 2011 Honda Civic Hybrid has a MSRP of $24,050 while boasting an impressive 44 mpg on the highway.
The average person drives 15,000 miles a year and we’ll say that gas costs $3.90 a gallon for both scenarios. Knowing this and the fact that the Honda Civic Sedan gets 39 mpg on the highway we can calculate that the annual fuel costs for this owner will be $1,500 a year or $125 a month.
The hybrid version of the Civic gets 44 mpg. Using the same figures as above we find out that the Honda Civic Hybrid will only cost you $1,329.54 a year in gas or about $110 a month.
That means the hybrid will save you about $15 a month or $180 a year in gas. But it costs you about $8200 more to purchase this version. That means it would take over 45 years for the gas savings to pay you back for the difference in price of the car. That’s clearly not a wise investment.
Beyond price, hybrid and electric cars have the problem of limited driving range. Gas powered vehicles with good fuel economy can go about 500 miles before needing to be refueled. Most electric cars can only go 200-300 miles before needing to be recharged. The average time to fully recharge an electric cars battery is between four and eight hours.
If you plan to use an electric or hybrid car to commute back and forth from your job combined with running a few errands than their limited driving range should not hinder your lifestyle. It’s when you do those holiday trips to visit family back East or vacations that span multiple days that you run into problems with driving range and where to recharge at. Not many cities across the U.S. offer recharging stations currently. And even if you could find a place to recharge your cars battery what would you do during those four to eight hours of wait time?
Another factor that keeps me from buying a hybrid car is the worry about maintenance. If my current car gets into an accident or breaks down unexpectedly there are a million and one mechanics that can fix it up. There are virtually no car mechanics that know how to fix an electric or hybrid vehicle. And the costs to replace those specialized parts are bound to be more costly than parts to fix standard, gas powered vehicles.
Advancements in technology over the next ten to twenty years will cause the price of hybrid and electric cars to fall. As with any new technology the longer you wait to purchase yours the faster, more fuel efficient, and inexpensive it will be.
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Keeping Money in Your Pocket,