Planet-Friendly Cars Can Cost You Some Green

Thinking green?

Some car owners might be considering fuel-efficient vehicles after the recent jump in gasoline prices. Though today's technologically advanced, fuel-efficient vehicles offer the same performance as their gas-guzzling counterparts, new car buyers may find that the money saved at the pump doesn't add up.

The average price of regular unleaded gasoline hit $1.37 per gallon this week, a 23-cent jump from where it was on March 4, according to the Energy Information Administration. Because of the jump, Paul Taylor, chief economist for the National Automobile Dealers Association, says consumers will consider fuel-efficient options as they did when prices jumped 30% in 1997.

Fuel-conscious folks have more choices than ever before. In the past two years,

Honda

and

Toyota

have introduced hybrid gas and electric models, combining efficient electric engines with powerful gas-fueled combustion engines. As a result of the technology, some cars, such as Honda's Insight, get nearly 70 miles per gallon on the highway, three times what some peers get.

According to a study from J.D. Power and Associates, which tracks the automobile industry, 500,000 hybrid cars will be sold each year by 2006, with more than 20 models offered in a variety of classes. Nearly every major car manufacturer has a hybrid vehicle in the planning stages, says Thad Malesh, the director of alternative power technology at J.D. Power. By the end of the decade, choosing a hybrid will be no different from choosing between automatic and manual transmission. "It will become a powertrain option," Malesh says.

But growth will be slow at first, because many car owners don't perceive hybrid cars correctly. Unlike earlier models, today's hybrids can go just as fast as regular cars, take regular unleaded gasoline and perform better in stop-and-go traffic, because electric motors have more torque. "About half believe it still has to be plugged in. This isn't true," Malesh says.

The Green Light

Fuel-efficient vehicles can save consumers money while helping the environment. "If fuel economy were increased as little as three miles per gallon, consumers would save as much as $25 billion a year in fuel costs and would reduce 140 metric tons of carbon dioxide in the environment each year," says Cathy Milbourn, spokeswoman with the Environmental Protection Agency.

Indeed, the cost savings can be impressive. According to the NADA, the average car on the road was driven about 15,000 miles in 2001, with an average efficiency of 20 miles per gallon. At current gas prices, the average car owner would spend $1,028 in fuel annually. Behind the wheel of a Honda Civic Hybrid, which gets an estimated 46 miles per gallon in the city and 52 mpg on the highway, they'd spend just $446 a year on fuel, saving $582.

While large hybrid vehicles don't exist yet, tremendous savings can be realized by choosing the most fuel-efficient vehicle within a gas-guzzling category. The most efficient sport utility vehicle, the Toyota RAV-4, gets 25 miles per gallon in the city. The worst, the GMC K1500 Yukon, gets just 13. If you drove 15,000 miles a year at the current fuel price, the difference between the two would be $759 annually.

Cost savings aren't the only advantage. Bob Epstein, founder of Environmental Entrepreneurs and owner of the Toyota Prius hybrid sedan, says his car is quieter than standard models and avoids America's dependence on foreign fuel sources. "Why be solely dependant on cheap fuel if you don't need to be?" he says, adding that he fills his tank just once every three weeks.

The Flashing Yellow

Some say, however, that the savings and advantages aren't significant enough to offset the cost of hybrid vehicles, which are more expensive than regular models because they're not mass-produced. Depending on the options package, the Honda Civic Hybrid can cost $2,500 more than the regular model. "Most consumers make such calculations and find that incremental increases in the cost of gasoline are annoying, but seldom justify a new car," says Jose Rose, professor of marketing at Case Western Reserve University.

People often place a premium on features when looking at a new car, not how often they fill up. As a result, Malesh says consumers pick the most fuel-efficient vehicles within a class, not the most fuel-efficient cars overall. "They don't want to give up their Tahoes. They want to get better gas mileage out of it," he says.

But people who need to haul heavy loads will find that many fuel-efficient models lack horsepower and cargo space. And the largest of the hybrids only carry five people -- not an option for larger families. "A soccer mom's not going to use it to pile in all the kids. It just doesn't have that kind of utility," says Haig Stoddard, manager of industry analysis at Ward's Communications. "These are drive-to-work-type cars."

The bottom line: Hybrids and other fuel-efficient vehicles are best for people who prefer smaller cars, drive longer distances and plan to stick with the car for a longer period of time, the NADA's Taylor says. "But saving the money isn't the key point here. They want to drive what is going to be a big part of the future."