Study: Hybrid cars will pay for themselves over time

Study: Hybrid cars will pay for themselves over time

DETROIT (Reuters) -- Some hybrid cars will make up for their premium cost
because of higher gas prices and tax credits from the U.S. government on the
more fuel efficient vehicles, a study released Tuesday shows.

Hybrid cars and trucks, which get improved mileage in city driving by
running on a combination of gas and electric power, cost between $1,200 and
$7,000 more than traditional versions of the same vehicles, according to
auto Web site Edmunds.com.

Edmunds.com is a partner providing data and content for CNN.com's automotive
Websites.

But a fuel economy study by Edmunds.com showed that the scales were starting
to tip in favor of hybrids.

"High gas prices and generous tax credits now offset the high sales prices
of some hybrids, assuming owners keep their hybrids for a few years," said
Alex Rosten, an analyst with Edmunds.com.

The shift is significant because analysts have said that higher sticker
prices were constraining hybrid sales.

Hybrids currently account for 1 percent of new car sales in the United
States. But Japan's Toyota Motor Corp., the hybrid market leader, sees its
annual hybrid sales topping 1 million units soon after 2010.

The consumer-focused automotive Web site said that, assuming vehicles were
driven 15,000 miles per year and gas was priced at $3 per gallon, owners of
the Toyota Prius and Ford Motor Co.'s Escape Hybrid would break even within
three years.

Buyers of the Saturn Vue Green Line from General Motors Corp., the Toyota
Camry and the Civic Hybrid from Honda Motor Co. would break-even within six
years, Edmunds.com said.

But federal tax credits for hybrid buyers are being phased out on the most
popular models.

Under a provision of the tax code, buyers of a Toyota hybrid after Sept. 30
will only qualify for half of the tax credit for which they would have
previously qualified.

Tax incentives will also be cut on other hybrids after auto makers sell
60,000 of the vehicles -- a sales threshold Toyota has reached.

AndyS...

The article is biased in that it compares the cost of a hybrid
against
the more expensive cars.

My Hyundai Accent cost under 10K, including tax, title, license,
air condx, air bag, radio, etc.....
It has a 100K mile / 10 year warranty.
It gets 35 miles per gallon, about the same as most hybrids....

So, tell me why I should even consider buying a hybrid, which has about
the same room and comfort level......

If you're going to compare it against a Ford, Honda, or Lexus, you
might
have a case. But it you compare it against an equivalent car (in size)
and
equivalent mileage, there is something lacking in the argument..

The bottom line is the total cost to buy and drive the car for, say,
five years......
Hybrids cost more, are more complicated, don't have a good warranty,
and
many places can't work on them.

Andy in Eureka, Texas

Jim Higgins...

I worked up a spreadsheet that would give me the payback period for the
mileage differential between cars (e.g. Honda Fit average mpg of 34 vs.
Prius 44mpg average). I worked this up for cost differentials of $1000 to
$8000 with the formula referenced to cells for miles per year and mpg. For
a cost difference between the Fit and Prius of about $8000 I can drive for a
*long* time, even at $4.00 per gallon. Honda is reputed to be working up a
hybrid Fit. Times are interesting.

El Castor...

Yeah, but the Fit is the size of a large insect. There are dung
beetles that are bigger -- and look better. Hummmph.

"It is useless to attempt to reason a man out of what he was never reasoned into."
Jonathan Swift

The tax credit on Toyota and Lexus hybrids is scheduled to drop to 25
percent in April 2007 and then be eliminated in October 2007.

In another study released Tuesday, auto industry tracking firm CSM Worldwide
cited higher gas prices as one factor driving a shift toward more efficient
six-speed transmissions.

CSM forecast that automatic six-speed transmissions would account for 60
percent of the U.S. car and truck market by 2012, up from less than 5
percent today.

GM has already announced plans to shift to a new family of six-speed
transmissions for upcoming models.

CSM said three-quarters of the new cars from GM, the world's No. 1
automaker, would feature the six-speed transmission by 2012.