Wednesday, June 4, 2008

Are Hybrid Cars More Economical?

Many people are surprised to learn the price of a new hybrid car. They do not believe that the added cost will pay back quickly on fuel savings. Actually they are right because even with $4 gas, a person who drives 15,000 miles annually may not recoup the added cost in the first year of ownership. It may take two or more years before gas savings equal the premium for hybrid.

However, this quick analysis misses other economic benefits of hybrid cars. First, hybrids hold their value better than non-hybrids. It is very likely that you will get more money from your hybrid if you decide to sell it. In addition, some lenders provide discounted loan rates for hybrids and some insurance companies offer discounted premiums. Even some employers offer incentives for hybrid vehicles.

I really recommend you to visit this blog post called Rethinking the cost of hybrid cars. The post gives an interesting calculation showing that hybrid cars are indeed more economical than non-hybrid cars.

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