Average gas prices have dropped down to $2.03 and it certainly doesn’t hurt at the pump as much as it did only one year ago when the average gas price was at $3.28. How does this new reality of low gas prices impact the dollars and cents when it comes to buying a hybrid?
Before I get in the new reality let’s look back first.
As I look at the mileage on our Prius, currently at 108,000, I think back to the day that we bought it back in 2007. Here’s what we were told by media and other skeptics
- It’s not economical to buy a hybrid car.
- The premium you paid for the Hybrid feature would never be made up in fuel savings.
- The Battery will only last you 80,000 miles and it will cost you $8,000 to get them replaced.
I don’t know where to start when it comes to buying a car that is “not economical”. Getting a sun roof is not economical, getting extra wide aluminum rims isn’t economical, getting a BMW 7 over a Toyota Camry is not economical, no matter how cushiony the ride in the beamer is. Yet all pundits felt it necessary to point out that hybrids are not economical. Hmm?
At the time we bought our first Prius we considered buying a Camry and we even looked into getting a minivan as it was the year of our first born child.
7 years, 120,000 miles and 40 candy/apple juice stains later the numbers do not lie: The Prius did just fine. It was very economical. Not only did it not cost us more to drive one, it actually save us thousands in fuel consumption. We did not have to buy a new battery at 80,000 miles and as it turns out they last up to 200,000 miles. As a matter of fact the second Prius I bought, I bought used at 81,000 miles, it is still getting the same 46mpg.
The table below shows our mileage in our two Priuses (or is it Prii) since 2007 and compares the fuel consumption of the Prius against a 2007 Camry.
The fuel economy for each of the vehicles can be found at http://www.fueleconomy.gov, Average gas prices (cpg) can be found at http://www.eia.gov/
At the time we bought our Prius the price difference between a Camry and a Prius was almost negligible. I believe we paid $23,700 for the Prius whereas a Camry ran a little over $24,000.
We saved over $7,000 in fuel costs over the Camry. So taking any difference in price between the two we saved thousands. (btw, we saved close to $13,000 in fuel cost compared to a Honda Odyssey).
“Well, you’re not comparing apples to apples” you might say. A Prius is not a Camry. You are correct, yet our Prius gets our family from point A to B in the same manner as the minivan. This goes back to the beginning of this article: what adds and what detracts from the economy of a car? Those of my generation were carted around in a sedan and we all somehow survived. A 2015 Toyota Sienna will cost you at least $8,930 more at purchase time than a 2015 Prius. Do you get close to $9,000 worth of comfort by making it easier to climb into the car?
If we truly want to compare apples to apples let’s just look at a Camry LE and a Camry Hybrid LE. The 2015 Camry LE MSRP is $22,970 and the Camry Hybrid LE has an MSRP of $26,790. The price difference between a regular gas only vehicle and its hybrid sibling is $3,820. Below you’ll find the same table as above but instead of comparing a Prius against a Camry and Odyssey, it compares a 2015 Camry Hybrid against a 2015 Camry.
This time we’re comparing apples to apples with regards to the Camry and based on our annual mileage (which I believe may be considered pretty low) the Hybrid would have saved $4,320 in fuel cost. Based on the $3,820 price difference, same mileage and same gas prices we’ve paid over the period of 2007 thru 2013 you would have $500 left in your pocket. I’d call that economical any day.
Now let’s get back to the reality of today. Today we’re faced with gas prices that are near or below $2. Do these calculations still stand? For those optimistic that $2 gas prices will remain in effect for the next 7 years, let’s do the math again.
Using the same parameters as before but looking “forward” with a constant gas price of $2 we see that at that price, we save $2,717 which with a price difference $3,820, we’re no longer saving money. In fact you’d be paying about $1,100 more. So in keeping it real, it would cost you more. To put that in perspective though; the “Power tilt/slide moon roof with options” package is $1,580.
For those that can’t see beyond that dollar amount I would like to try to appeal as follows:
- For those that want our great grandchildren to be able to invest in the Florida panhandle and believe our scientists, when they say we can make a change, you may spend $1,100 more on the car but you’ll burn 1359 gallons of fuel less.
- Science set aside (other than the science that enabled us to create gasoline in the first place), 1359 gallons of gas requires about 3000 gallons of oil to produce. That is 3000 gallons of oil less we need to import from the Middle East.
I dare to even say that it is safe to assume, you will make out better financially. If you think gas will
remain at $2.00 or below for the next 7 years, you may want to get your nose away from that fuel, as you’re clearly breathing its fumes. As soon as the OPEC is done squeezing out the competitors, as soon as Putin makes another dubious move or as soon as something else blows up on planet earth, prices will go up again. It’s just a hunch but I’m guessing It’s just a matter of time.
Just like we proved the 2007 detractors wrong, I have a feeling 7 years from now we’ll be we’ll be able to do the same to todays detractors.
Only time will tell.
I feel compelled to update this article as is was posted 6 months ago and since then gas had gone up from $2.02 back to $2.89. many were touting that gas prices would drop sub $2.00 again. Opposite seems to be happening, gas is going up again. At $2.89 the difference between a regular and hybrid Camry is now a fuel savings $3,926. At a price difference $3,820 between the regular Camry and the Hybrid we’ve now tilted back to savings. It’s not much but at $2.89 per Gallon but, Yes you should probably buy that Hybrid
Good luck reaching your financial goals.
