How Do Hybrid Cars Save Money

How do hybrid cars save money? Hybrid cars are all the rage as people become more aware of the importance of leading sustainable lifestyles. According to popular magazine Consumer Reports, one out of three car buyers in seriously considering buying a hybrid. Hybrids may be good for protecting the environment, but do they protect a consumer's wallet too?

Sure, hybrids get better mileage than other vehicles, but they usually cost more upfront. Just how do hybrid cars save money?

In recent years we have seen gas prices fluctuate wildly based on a number of socioeconomic factors. When gas spikes to the $3 per gallon range and above, hybrid car owners can realize significant savings. This is due to the incredible mileage these cars realize. For example, based on data from Toyota's website], the popular hybrid model, the Prius, gets 44 miles per gallon while the non-hybrid Corolla only gets 32 miles per gallon. Even though the Prius costs more to purchase, owners will see a cost saving over five years of owning the vehicle.

The other way hybrids help save money is through tax incentives. Some hybrid cars, based on gas mileage, may not balance out the cost of gas usage versus the upfront cost of the car. However, owners may get a tax incentive for purchasing a hybrid. When you factor in the refund, the total cost of purchasing the hybrid is lower than the cost of purchasing a comparable model. That being said, be advised that not all hybrid buyers qualify for a tax incentive. If you pay the Alternative Minimum Tax you may not qualify. Also, federal rebates are only available until an auto manufacture has manufactured 60,000 hybrids.

While the Consumer Reports study showed that only some hybrids would result in a savings for the buyer based on total cost of ownership, another study conducted by market researcher IntelliChoice, reported that all of the current hybrids on the market will help owners save money. The IntelliChoice findings factor in financing, fuel, insurance, state taxes and license fees, repairs, maintenance and depreciation.

Hybrids have similar maintenance and repair costs to traditional cars in the first five years of ownership. However, they tend to hold their value in the first five years better than gas model cars. Plus hybrids are popular right now so they have a decent resale value.

The Toyota Prius is one of the hottest hybrids on the market today. According to both Consumer Reports and IntelliChoice, a Prius will save its owner money. The gas mileage is great, the repair and maintenance record is good and the demand remains high, meaning the resale value is good.

Even if you aren't convinced that a hybrid car will save you money, consider purchasing one for other reasons. Less U.S. dependence on oil gives the country more leeway when it comes to foreign affairs, research and development. Interest in alternative fuel development is producing new clean tech jobs. Finally, hybrid cars emit fewer harmful emissions into the air thereby contributing to a cleaner, greener and healthier planet.

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