High Demand is Pushing Hybrid Prices Up ~ Hybrid Car Review
Hybrid Car Review: High Demand is Pushing Hybrid Prices Up

Friday, June 13, 2008

High Demand is Pushing Hybrid Prices Up

With the high price of gas, cars that get better fuel economy, like hybrids, are in high demand. Despite that, there is a limited number of hybrids available to be sold. Bring in your old economics textbook and you'll quickly realize that mean the price is going to go up.

With that rise in prices, some are looking at a longer period of time to make up the price differential you have to pay for the hybrid system. Edmunds released estimates just three months ago and they say things have changed drastically for some of the models.

Please note their method is a naive one. You should take into account resale value, cost to own (repair costs), insurance, access to the HOV lane, free parking, tax credits (federal, state or local), etc..., not just gas savings.

But if you restrict yourself to just gas savings, Edmunds.com says only the Prius, Altima and Tahoe Hybrids have a chance of making up the price differential in less than five years off of gas savings alone.

The Ford Escape (and Mercury Mariner) and Saturn Vue Hybrid all saw a slight dip in the length of time it takes. The time to make up the difference on a Prius remained the same. All the other hybrids saw an increase in time.

The worst change comes from the hybrid that takes the longest to make up the difference. The Lexus 600h takes 99.6 years (estimates assume 15,000 miles a year and gas price remain stable). That's an increase of over 30 years. That's because you only save $189 a year, while the premium cost estimate is $18,858.

The Chevy Malibu 'payback' time has increase 2.7 years to 11.1 years. The hybrid premium is $1,867 and the gas savings are estimated at $169 a year.

It should be noted, however, that the Chevy Malibu is eligible for a federal tax credit. Despite it's mild hybrid status, the payback time, if you qualify for the tax credit, will be shorter than 11 years.

Get Four Free Price Quotes From Yahoo! Autos Hybrid Research and Pricing at Edmunds.com

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