The price of gasoline just hit an all-time high for the month of March, and it's expected to continue to climb. But will buying a hybrid car help consumers save money? Here's the Deseret News analysis on the subject.
People should consider a few things before they decide to purchase a hybrid vehicle with the hopes that it will save them money. The Toyota Prius (the top-selling hybrid for 2011) gets a combined 50 miles per gallon. The average vehicle in the U.S. gets 21 miles per gallon.
Buying a new base-model Prius will cost consumers $23,015. If consumers have a car worth $10,000 that they sell and put towards the Prius, and assuming gas prices are $4 a gallon throughout that time and the car owner drives the national average of 1,123 miles a month (or 13,476 each year), it will be nine years until buying the car saves them money. So, buying a hybrid car won't bring people immediate savings. In fact, it could take quite some time.
But, if someone has a car worth $15,000, then purchasing a Prius right now would result in savings on gasoline in six years. If someone's current vehicle is worth $20,000, then the purchase of a Prius would be profitable in just three years. If the price of gasoline goes higher than $4 a gallon, the Prius would be beneficial even sooner.
Lately, more Americans have shown an interest in buying hybrid vehicles, according to the Associated Press. "The American consumer shopping for a new car is seeing the most fuel-efficient lineup of vehicles ever," Jesse Toprak, vice president of market intelligence at the auto shopping site Truecar.com, told the Associated Press.
But not everyone thinks buying a hybrid vehicle is a good idea, according to Forbes.
"Assuming the average consumer drives 12,000 miles per year in a vehicle that gets 20 mpg, an increase of $1.00 per gallon, from $3.60 to $4.60 per gallon as an example, would only result in an approximate increase of $11.50 per week in fuel expenses," Alec Gutierrez, senior market analyst of automotive insights for Kelley Blue Book, told Forbes. "While in today's economic environment many families are on an extremely tight budget and $11.50 may be enough to break the bank, for others, it would amount to a small lifestyle change, such as bringing a sandwich to work rather than going out to lunch, or perhaps cutting back on Starbucks."