According to the Vancouver Sun, hybrids are now cheaper than conventional cars.
Perhaps surprisingly, this seems like a big deal to me. Even though hybrids are (obviously) more fuel efficient than comparable conventional cars, they’re not necessarily cheaper: the fuel savings may not offset the higher purchase price.
But higher gas prices are changing the equation.
A year ago, the British Columbia Automobile Association assumed that gas prices would remain at about 95 cents per liter for 5 years—and found that hybrids weren’t cost competitive. This year, the BCAA assumed that gas prices will remain at about Can$1.15 per liter (a little under $4/gallon US) for 5 years. So every gallon of gas saved by swtiching to a hybrid is now worth about 20 percent more than it was a year ago. Plus, the BCAA found that hybrids now have lower financing costs than conventional cars, and that the price gap between conventional and hybrid models has narrowed.
So, for six out of the seven hybrid models that the BCAA looked at, the five-year savings on gas and financing overcame the higher cost of a hybrid.
This is, of course, part a larger trend: rising energy prices are making conservation and efficiency more and more cost effective—not just for cars, but across the board.
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As always, some caveats. First, maintenance costs for hybrids are still a bit of an unknown. Sure, hybrid cabs–which get driven an awful lot—seem to have a pretty good maintenance record. And there’s no reason to believe that 5-year maintenance costs are higher for hybrids than conventional cars. But there’s still a lingering fear that hybrid powertrains and batteries may pose some additional costs down the road. (I’m not sure how seriously to take this fear, though—I’d love to hear stories, both good and bad, about how hybrids perform over the long haul.)
Second, the results of this study may not hold true in the US, where gas prices are lower and car pricing and financing are a little different.
And finally, the comparison here is between hybrids and comparable conventional cars. So if you’re just looking to get around town and don’t care much what you drive, it still may be cheaper to by a smaller, stripped down Yaris than a Prius. (And if you invest the difference in carbonoffsets or other good works, the planet may come out ahead, too.)
Despite all the caveats, it’s great to see that—for some of us at least—the fuel-saving option is now the cheapest one, too.