NEW YORK (TheStreet) -- Drivers attracted to hybrids have long faced a nagging question: Is a hybrid really cheaper to own once the fuel savings are compared with the premium paid for the car?
Over the years, studies have increasingly answered "yes," often because that premium has inched down while fuel prices have gone up. But the analysis includes a lot of assumptions that may not match the car owner's experience -- fuel costs, miles driven per year and the number of years the vehicle is kept.
A study by Vincentric, a compiler of cost-of-ownership data, found that 13 of 33 hybrids are cheaper to own than their counterparts with standard engines. That's two more than in last year's study, but because there are more hybrids this year the percentage of cost-effective models fell to 39% from 44%.
Some of the most cost effective were high-end hybrids such as the Lexus (TM) CT200h, which was $6,300 cheaper to own than its all-gas sibling. But overall it cost $1,338 more to own and operate the average hybrid over five years, assuming 15,000 miles of driving per year.Vincentric looks at eight factors, including depreciation, financing, fees and taxes, fuel costs, insurance maintenance, repairs and opportunity cost, which is the value of alternative uses for the buyer's money. used hybrid or thinking of keeping the car for the long term. It's also hard to predict turn-in or resale values. That gets to another big issue: the ownership period. While five years is fairly typical, most vehicles can last for 10 or 15 years. The longer you keep your hybrid, the better the odds the fuel savings will more than offset the price premium. Because many hybrid models are new, there is scant data on long-term maintenance costs. Replacing a hybrid's big battery array can cost thousands of dollars, but studies show that many of the older Prius models are doing just fine on 10-year-old batteries. Bottom line ... well, there is no bottom line. Some hybrids are cost effective, some aren't, and no matter how carefully you select from among the available models, your results will depend on unpredictable fuel costs and miles put on the car. But one thing is sure: By using less fuel, the hybrid will be kinder to the environment. For many drivers, that's the most important issue.
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