Thursday, April 05, 2012

The Costs of Higher Fuel Economy

When you look at new car prices and consider a more fuel efficient vehicle, what would you do? Would you pick the more fuel efficient vehicle and hope that you're going to come out ahead on the deal?

If you're buying a Prius, odds are you'll come out well ahead, but other cars, SUVs, and trucks may have more difficulty.

The New York Times compares hybrids with their closest vehicle stable mates in the same class and finds that the breakeven point may never come during the lifetime of the vehicle.

For instance, it might take more than 26 years for someone buying the Ford Fiesta SFE to break even over the purchase of the standard Ford Fiesta. In other words, it's not worth it to buy the SFE for what amounts to $23 per year in savings on fuel costs when the up front costs are higher. It's nearly as bad for the Chevy Volt when compared to the Chevy Cruze Eco - and that's taking into account the federal rebates.

One does significantly better if you're considering a hybrid over an older vehicle or a vehicle from a different class (such as moving from a normally aspirated SUV to a hybrid or plug in like the Volt).

However, the Times article shows why the Prius is a class leader on hybrids - Toyota has figured out how to get the breakeven point down so low that owners can see a tangible difference over stablemates and other vehicles in other classes, including subcompacts, in short order.

The article also notes that it would take gas prices to reach $8 a gallon - or nearly double current prices - for the breakeven point to make sense on the purchase of many hybrids.

Fact is that many consumers don't do the math on gas consumption and costs, nor do they realize how much they're currently spending on gas or their needs.

No comments: