Some Hybrids Now Cost-Effective - Vincentric Alternative Fuel Analysis

BINGHAM FARMS, Michigan September 7th, 2012; Vincentric, the leading compiler of automotive cost-of-ownership data, announced its 2012 Hybrid Analysis today, in which 11 of 25 hybrid vehicles were identified as having a lower total cost-of-ownership than their all-gasoline counterparts.

The 11 hybrids with lower ownership costs included the Lincoln MKZ Hybrid, which had the largest (over $7,000) advantage in comparison to its gasoline alternative, with additional hybrids from Mercedes-Benz, Lexus, Toyota, Ford, Kia, Porsche, Honda and Hyundai also showing cost advantages. However, when the costs to own and operate all 25 hybrid vehicles were taken into account, the average five-year cost-of-ownership for hybrids was $1,223 more than their all-gasoline powered counterparts, assuming an annual mileage of 15,000.

“With a large number of hybrid vehicles now on the market from numerous manufacturers, consumers have many options to reduce fuel consumption using hybrid technology,” stated David Wurster, President of Vincentric. "Our research shows that certain hybrids provide the benefits of hybrid technology, while also providing overall cost savings. However, it is important to remember that this isn’t the case for all hybrids, with low ownership costs and associated cost savings being specific to certain vehicles."

Vincentric measures eight cost elements for over 2,000 vehicles configurations per model year, including depreciation, financing, fees and taxes, fuel, insurance, maintenance, opportunity cost and repairs. Each month Vincentric re-compiles its database to take into account current vehicle prices, resale values, fuel costs, finance rates and other economic and market factors to ensure that users have access to up-to-date and accurate ownership costs.

2012 HYBRID ANALYSIS

The Vincentric 2012 Hybrid Analysis showed that of the 25 hybrids measured, 11 had a total cost of ownership that was lower than their all-gasoline powered counterparts.

 
The average price premium for a hybrid was $5,243, with an average fuel cost savings of $3,583. When all costs to own and operate a hybrid were taken into account, the average cost of ownership for hybrids was $1,223 more than the all-gasoline powered counterparts. The range between the best and worst savings was significant, with the 2012 Lincoln MKZ Hybrid saving buyers $7,001 while the 2012 Chevrolet Tahoe Hybrid cost buyers over $8,065 more to own. The full study is published below.

 

There are many different approaches for comparing hybrids to their all gas counterparts. At Vincentric, we have prepared different reports to help users understand the financial dynamics of hybrid vehicles. By doing so, we enable users to better understand the expected costs (or savings) of driving a hybrid, resulting in the ability to make a more informed decision when considering the purchase of a hybrid vehicle.
 
Fuel prices used in these reports are based on a weighted average over the previous five months, so you may notice that they don't necessarily reflect current prices during times of rapid fuel price changes. This is done to help ensure that the analysis reflects current market trends and not market extremes.
 
The reports assume 15,000 miles are driven annually, and the vehicle is owned five years. It is also worthwhile to understand that the numbers shown are U.S. averages, although the same analysis can be done for any state or the District of Columbia.
 
Please note the reports below use data from our July, 2012 database update. Vincentric compares hybrid vehicles to their all-gas counterpart based on a similar trim level. Cost differentials may differ if other trims are analyzed.

 

COST OF OWNERSHIP AND FUEL COST COMPARISON

 

There has been much debate over whether the premium price that hybrid vehicles command can be financially justified. In this analysis, there were 11 hybrids that can be financially justified purely based on the total cost of ownership numbers. The following hybrid vehicles had cost of ownership numbers that were less than the all-gasoline powered counterparts: 

 

• 
• 2012 Lincoln MKZ Hybrid (-$7,001)
• 2012 Mercedes-Benz S Class Hybrid (-$4,242)
• 2012 Lexus HS 250h (-$3,747)
• 2012 Toyota Prius V (-$1,804)
• 2012 Toyota Prius C (-$1,469)
• 2012 Ford Fusion Hybrid (-$1,202)
• 2012 Kia Optima Hybrid (-$779)
• 2012 Porsche Cayenne Hybrid (-$672)
• 2012 Hyundai Sonata Hybrid (-$319)
• 2012 Lexus RX 450h (-$17) 

 

For those whose purchase of a hybrid is based upon minimizing the environmental impact and not strictly financially driven, the report identifies additional viable vehicles. The following hybrid vehicles were shown to have additional costs of less than $2,000 over 5 years, or less than $34 per month more than the gas-powered counterpart.
   

• 2012 Honda Insight ($52)
• 2012 Toyota Camry Hybrid ($233)
• 2012 Honda Civic Hybrid ($911)
• 2012 Toyota Prius ($1,293)
• 2012 BMW 5-Series Hybrid ($1,296)
• 2012 Porsche Panamera Hybrid ($1,772)
• 2012 Toyota Highlander Hybrid ($1,896)
• 2012 Kia Optima Hybrid ($1,949)

In addition to carbon emission improvements, hybrids are known for their improved fuel economy. The models that provide the greatest benefit over their gas-only counterparts are:
  

• 2012 Lincoln MKZ Hybrid (-$6,168)
• 2012 Toyota Prius V (-$5,199)
• 2012 Cadillac Escalade Hybrid (-$4,986)
• 2012 Chevrolet Silverado 1500 Hybrid (-$4,605)
• 2012 GMC Sierra 1500 Hybrid (-$4,605)

 
Of course for those who are looking to minimize fuel purchases, it is important to know the hybrid vehicles with the lowest overall fuel costs. They are:

 

• 2012 Toyota Prius ($5,836)
• 2012 Toyota Prius C ($5,837)
• 2012 Honda Civic Hybrid ($6,580)
• 2012 Honda Insight ($6,845)
• 2012 Toyota Prius V ($6,876)

 
The chart below shows further detail regarding the items related to cost of ownership and fuel consumption for each hybrid. In addition, by clicking on the vehicles names in the chart, you will see a detailed comparison of the two vehicles.
 
The results of this analysis show that 11 of the 25 hybrid vehicles measured have a lower overall cost of ownership than their gasoline alternatives. The chart below shows three key items related to cost of ownership for each hybrid, which include:

 

• The Price Premium - This shows how much more you pay for the hybrid.
• Cost of Ownership Differential - This shows how much more (or less, if a negative number) it will cost to own and operate the hybrid compared to a similar all-gasoline powered vehicle.
• Fuel Cost Differential - This shows the fuel savings obtained by the hybrid. Buyers often only look at fuel savings due to its reduction in the use of petroleum, although from a strictly financial perspective the Cost of Ownership differential is the relevant number.