Hybrid Cars

Why We Buy Hybrids

The word is out: Increasing numbers of Americans are falling madly in love with hybrids. The proof is in the numbers; in 2007, hybrid sales were up an astronomical 50 percent over 2006's figures. Why are more and more people finding it preferable to go green? We spoke with manufacturers, industry analysts, hybrid owners and a car dealer to get a sense of the factors motivating drivers to take the hybrid road.

Factor #1: Hybrid buyers want to make a statement. Whether their cause is protecting the environment or reducing U.S. dependence on foreign oil, many people want to purchase cars that reflect their beliefs. Such is the case with hybrid owner Bill Fogarty. "I want to send as little of our money to the Middle East as possible while not changing my lifestyle," he says. For people like Fogarty, buying a hybrid does more than just reveal their convictions; it tells the world they have the strength to act on them. Phil Gott, director of automotive consulting at Global Insight, agrees, saying, "Many people buy hybrids to make a statement; it's a green thing."

This factor certainly seems to play a part in the continued sales success of the Toyota Prius. The Prius reigns as the best-selling hybrid by a wide margin, despite competition from hybrid versions of popular vehicles like the Honda Civic and Toyota Highlander. Gas-electric versions of the Civic and the Highlander can easily be mistaken for their non-hybrid counterparts. The distinctive-looking Prius exists only as a hybrid, so it's the leading choice for those who want to wear their hearts on their wheels.

Brian Hansen, a Prius owner and sales manager of a Toyota dealership in Wisconsin, agrees. "The true Prius buyer is motivated by the car's environmental impact — or lack thereof," he says. "They want to get that message out to others. Not so much from a 'look at me, I drive a Prius' standpoint; their perspective is more 'I drive a Prius because I care, and so should you.' Nothing else sends that message like a Prius."

Factor #2: Gas prices. Not surprisingly, steep gas prices have led many drivers to think outside the traditional gas-powered box when it comes to transportation. "I prefer to pass gas stations rather than stop at them," says Dan, an Edmunds.com CarSpace member who owns a Ford Escape Hybrid.

Fogarty has a similar perspective. "I feel strongly that the price of fuel is on a steep upward spiral," he says. "Driving as inexpensively as possible, given that I drive more than 40,000 miles each year, is critical."

The fact that hybrids are now available in a variety of configurations only makes them more appealing to those seeking to lighten their fuel bills. "I purchased my Ford Escape Hybrid because I was interested in a bigger vehicle without paying the extra energy cost," says one CarSpace Forums user. "My Escape Hybrid gives me carlike economy with a truck stance. I'm getting about 34 mpg, with about 80 percent highway miles. This is what I had hoped for."

Hansen says his experience as a dealership sales manager suggests that gas prices are a primary factor driving hybrid sales. "When gas prices started climbing, our Prius sales went through the roof," he says. "We went from a wait of about a month to wait times of four to five months."

But Gott thinks the link between fuel prices and hybrid sales tends to be overstated. "If you look at the demographics, you'll see that most of the people who buy the Prius don't need to worry about fuel savings."

Factor #3: Tax credits and other perks. A tax credit that went into effect in 2006 gives hybrid buyers an even better deal than the tax deduction it replaced. The actual amount of the credit depends on three things: the model of the hybrid, its popularity and when it was purchased. Also, the hybrid must have been purchased, not leased. But the payoff for this more complicated way of reckoning is significant: Hybrid owners are now eligible for a tax credit of up to $3,000 on their vehicles. See this article for a more detailed explanation of the credit. Note that hybrids made by Toyota and Lexus are no longer eligible for this credit; also, the eligibility of Honda's hybrids expires at the end of 2008.

Another perk of hybrid ownership allows owners with qualifying hybrids to drive solo in High Occupancy Vehicle ("carpool") lanes. To qualify, hybrids must meet certain emissions and mileage requirements. Not all hybrids qualify, and not all states offer this perk. Check your state's DMV site to see what the rules are in your neck of the woods. Another perk involves insurance discounts. Statistics have shown that hybrid owners tend to be safer drivers. As a result, some insurance carriers (including Travelers' Insurance offer hybrid owners a 10 percent discount.

Lonnie Miller, managing director for the Polk Center for Automotive Studies, thinks the perk factor is a secondary incentive. "It sweetens the deal — it certainly can't hurt," he says. "But most people don't come into the market with that as their primary motivator."

For a more comprehensive list of goodies for hybrid buyers, including cash back from employers and free parking, see "Finding Great Perks for Hybrid Buyers."

Factor #4: Hybrids are better for the environment. Cars, trucks and other mobile sources are responsible for almost a third of the total air pollution in the U.S. Hybrids help mitigate this problem by expelling fewer emissions than their gas-driven counterparts. For example, a manual-equipped Honda Civic with a 1.8-liter engine generates 6.3 tons of greenhouse gas emissions per year. A Civic Hybrid is much cleaner, generating only 4.4 tons.

The emissions factor is of critical importance to many buyers, who'd like to do their part to keep our planet habitable for future generations. Miller thinks environmental concerns are paramount in the minds of many hybrid buyers. "This generation, when you cut 'em, they bleed green," he notes.

"Most Americans seem to drive without a conscience. I am not prepared to let that happen to me," says Allen. David Keith, a Honda Civic Hybrid owner, cites the car's "super-low emissions" as a primary factor in his decision to go green.

Factor #5: Hybrid owners love using new technology. Cutting-edge gadgets seldom make their way to the mainstream immediately. From podcasts to PDAs, new technology is typically championed by an elite few before being embraced by the masses. Hybrid owners want to be part of this elite group.

Keith cites the Civic Hybrid's "cool technology" as having played a part in his decision to buy one. Allen was also wooed by the "gee-whiz" factor inherent in hybrids, saying, "I'll admit it — I'm a geeky engineer who likes good gadgets." Electric engines are just the beginning when it comes to the unique technology offered by hybrids. Many offer intriguing features such as energy-flow diagrams and fuel-economy gauges.

Some believe being first on board can help change the direction of the automotive industry. "For me, it's important to support the development of new technologies in fuel economy," says Fogarty.

But even within this clique of curve leaders, there are those who practice caution. Some are wary of hybrids that are in their first year on the market, choosing instead to purchase models with a bit more history behind them. "I waited a few years [before purchasing, so that Honda could] get the bugs out," says Allen, with respect to his Honda Civic Hybrid.

Greener Days Ahead
As hybrids grow more affordable, their popularity will likely increase. In a poll carried out by the Polk Center for Automotive Studies, respondents cited cost as the most significant factor standing between them and hybrid ownership. Hybrids had typically commanded a $3,500 premium over their non-hybrid counterparts. In recent years, this figure has begun to drop. The Honda Civic Hybrid, for example, costs just $2,000 more than a top-of-the-line Civic.

Future growth will also be fueled by the availability of a wealth of new models. In addition to the Prius, there are hybrid versions of the Chevrolet Malibu, Silverado and Tahoe; Ford Escape; GMC Yukon; Honda Civic; Lexus GS, LS and RX; Mazda Tribute; Mercury Mariner; Nissan Altima; Saturn Aura and Vue; and Toyota Camry and Highlander. (For a complete list of hybrids available, see here. "The additional units [from the introduction of these models] has contributed significantly to the increase in total industry hybrid sales," says Toyota spokesperson Celeste Migliore.

Other hybrid offerings are in the works. Chrysler LLC is said to be developing hybrid versions of the Chrysler Aspen, Dodge Durango and Dodge Ram. General Motors is reportedly working on hybrid iterations of the Cadillac Escalade, Chevrolet Silverado and GMC Sierra. Toyota currently offers a hybrid version of the Sienna minivan in Japan, and is said to be preparing something similar for the U.S. market. Also in the pipeline are hybrid versions of the BMW X6, Honda Fit, Hyundai Accent and Porsche Cayenne.

"Hybrid technology is here and is being embraced," says Migliore. "With new manufacturers' offerings and entrants, the growth is surely going to continue."