Hybrids Don't Shine in True Cost To Own StudyBy John O'Dell June 25, 2008
Chevy Aveo tops ownership cost study. Civic hybrid and other gas-electric vehicles don't fare well because of hybrid premium in initial purtchase price.
By John O'Dell, Senior Editor
If saving money is your thing, and in these rugged economic times who isn't into that, then Chevrolet, Honda, Toyota and Nissan all have cars for you.
But they aren't hybrids
Previous studies using Edmunds' True Market Value calculations have shown that the so-called hybrid premium makes it difficult for the fuel-efficient cars and SUVs to save enough on fuel to earn back the higher price automakers charge for the advanced technology packed into a gas-electric powertrain.
Now a new Edmunds.com True Cost to Own study finds that even with their sometimes hefty federal tax credits, hybrids slip well down into the pack when long-term ownership costs are considered.
The Civic Hybrid is No. 14 in the TCO rankings being released today, while the nation's best-selling hybrid, Toyota's Prius, doesn't even make the top 25. It finished 34th overall, although it is in second place among hybrids. Should gasoline prices continue to rise, however, hybrids' ownership cost performance does improve. The Civic Hybrid would move up to sixth place overall if gasoline hits $6 a gallon.
Cost Not Everything
Despite their higher cost to own, hybrids still make sense to many from an environmental perspective. They typically use less fuel - and pump out fewer pollutants and CO2 -- than their conventional counterparts.
And a new study by auto market researchers at J.D. Power & Associates has found that most hybrid buyers don't consciously calculate longterm costs anyhow, concentrating instead on preceived fuel savings.
To help go beyond such a shallow approach to the economics of car buying, the new Edmunds TCO study uses purchase price, depreciation and the average annual costs of fuel, financing, insurance, routine maintenance and repairs based on five years of ownership at 15,000 miles a year to compute the cost-per-mile of the hybrids and the least expensive conventional models in every manufacturer's lineup.
While hybrids are less expensive in the fuel and maintenance categories, their relatively high purchase prices - which also affect the cost of financing, taxes and licenses -- make it difficult for them to compete against less-expensive models, said Jesse Toprak, Edmunds.com's senior industry analyst.
"Gasoline cost is a big factor at today's prices, but it isn't the biggest."
No matter how great the fuel savings, "a $25,000 Prius isn't going to match up well against a $10,000 Chevy Aveo or a $15,000 Civic," Toprak said,.
Indeed, it was a basic Aveo - the "Special Value" 4-door hatchback package with 1.6-liter engine and 5-speed manual transmission - that placed first on the overall list of the models that are the least-expensive to own, with a TCO of just 42.7 cents per mile.
The top ten are separated by a mere four pennies per mile, so rankings are sometimes based on differences of tenths of a cent per mile.
In second place at 42.9 cents a mile is Hyundai's Accent GS, a 2-door hatchback that, like the top finisher, has a 1.6-liter engine and a 5 speed manual.
Honda's 4-door hatchback Fit, with 1.5 liter engine and 5 speed manual, placed third, with a TCO of 44.2 cents a mile.
In fourth place, 44.5 cents a mile, was Toyota's Yaris 2-door hatchback, also with a 1.5 liter engine and 5-speed manual, while Honda's base Civic DX sedan with a 1.8-liter engine and 5-speed manual, rounded out the top five at 45.5 cents a mile.
Hybrid fans have to look pretty far down the list to find cars on their primary interest lists: after the base Civic Hybrid (the Civic Hybrid with a navigation system is rated as a separate model in 31st place, with a 5-year cost of ownership working out to 39.3 cents per mile) and the 34th place Prius - 49.4 cents a mile -- the next best performer is the Nissan Altima Hybrid.
But it is way down the list, in 66th place overall with an operating cost of 53.9 cents a mile. That placement comes despite a $2,350 federal tax credit.
Following the Altima Hybrid are the Chevrolet Malibu Hybrid, 81st-place at 56.3 cents a mile; the Ford Escape Hybrid SUV, in 94th place at 58.3 cents a mile, and its near-twin, the Mercury Mariner Hybrid, 102nd at 59.6 cents a mile. The Malibu has a $1,300 tax credit, the Escape and Mariner TCOs include $3,000 federal credits.
Other hybrids and their placement and five-year ownership cost per mile are the Toyota Camry sedan, 134, 63 cents; Toyota Highlander, 190, 72.5 cents; Lexus RX400h, 260, 98.7 cents; and Lexus GS450h, 294, $1.12 per mile. Federal tax credits for all of the Toyota and Lexus hybrids have been exhausted.
Gas Can Be Green
Many of the conventional gasoline-fueled top finishers are small and fairly fuel-efficient cars that can compete well with the hybrids for consideration as "green" cars.
Rounding out the top 10 in the TCO study are the Mazda3 iSport 2-liter sedan with 5-speed manual, 46.3 cents a mile; the Kia Rio 1.6-liter sedan with 5-speed manual, 46.4 cents; Scion's XB wagon with 2.4-liter engine and 5-speed manual tranny, 46.7 cents a mile; and the Toyota Corolla CE sedan with 1.8-liter engine and 5-speed manual, 46.8 cents per mile.
Tax credits for hybrid models fading out over time and as sales increase.
The $1,050 credit for Honda's gas-electric version of the Civic will drop to $525 on July 1, and that will drop it into 18th overall and boost its TCO by 2 percent, to 48.3 cents a mile.
Edmunds.com provides a TCO calculator, adjusted to account for regional price differences. To check the True Cost to Own for the vehicles on your shopping list (note, it doesn't account for the hybrid tax credit), click here.