Time, Money and Emotion Will Decide Hybrid's True Value
P ulling up at a traffic light, I glanced over at a Toyota Prius in the next lane. The trip computer in my Lincoln Navigator test vehicle showed 11.5 mpg and, ruefully, I considered that the Prius driver was potentially stretching each gallon four times farther than my Lincoln.
The episode came back to me last week as Consumer Reports magazine, rightly or wrongly viewed as the bible of vehicle evaluation by many Americans, published a story on the financial aspects of hybrid ownership.
Money saver?
The article essentially concluded that hybrids can take five years or 75,000 miles to recover their purchase price and operating cost premiums compared to conventional vehicles. The finding was sullied by a subsequent admission by CR that its math was flawed and that in fact two of the six hybrids considered, the Prius and the Honda Civic, would save owners money -- on the order of $300 to $400 -- within five years. The other hybrid vehicles in the study -- the Ford Escape, Honda Accord, Lexus RX 400h and Toyota Highlander -- were still expected to cost owners $1,900 to $5,500 extra within the five-year period.
The study stirs a controversy that has been developing over hybrids in recent months. The concern relates to the fact that hybrids, even the most efficient, have a hard time justifying their purchase price if the buyer's aim is to save money.
There are two problems: First, while hybrid fuel consumption is superior to equivalent-size conventional vehicles, the differential is not as dramatic as early expectations. This misperception was fed by the distorting efforts of the outdated government fuel economy tests. More realistic official tests next year will correct this imbalance. Second, and even more problematic from a financial viewpoint, is that hybrids cost significantly more to purchase and depreciate faster than equivalent conventional vehicles. Precise number-crunching on hybrids is difficult because incentives and transaction prices on normal vehicles change frequently. Hybrids, however, rarely have incentives and are priced significantly higher.
Feel-good factor
Though hybrids received a black eye from Consumer Reports they remain a subject of fascination for the car buying public. Some people are attracted by the ingenious technology itself; others are buying hybrids because they want to feel like they are doing something to reduce greenhouse gas emissions. And while hybrids may not be as economical on fuel as was thought originally, their carbon dioxide output is much lower than conventional gasoline vehicles. That environmental feel-good factor remains a major part of hybrid appeal.
On the other hand, now that Consumer Reports has weighed in against hybrids, fewer people will believe they can truly save money with a hybrid purchase.
DetNews
The episode came back to me last week as Consumer Reports magazine, rightly or wrongly viewed as the bible of vehicle evaluation by many Americans, published a story on the financial aspects of hybrid ownership.
Money saver?
The article essentially concluded that hybrids can take five years or 75,000 miles to recover their purchase price and operating cost premiums compared to conventional vehicles. The finding was sullied by a subsequent admission by CR that its math was flawed and that in fact two of the six hybrids considered, the Prius and the Honda Civic, would save owners money -- on the order of $300 to $400 -- within five years. The other hybrid vehicles in the study -- the Ford Escape, Honda Accord, Lexus RX 400h and Toyota Highlander -- were still expected to cost owners $1,900 to $5,500 extra within the five-year period.
The study stirs a controversy that has been developing over hybrids in recent months. The concern relates to the fact that hybrids, even the most efficient, have a hard time justifying their purchase price if the buyer's aim is to save money.
There are two problems: First, while hybrid fuel consumption is superior to equivalent-size conventional vehicles, the differential is not as dramatic as early expectations. This misperception was fed by the distorting efforts of the outdated government fuel economy tests. More realistic official tests next year will correct this imbalance. Second, and even more problematic from a financial viewpoint, is that hybrids cost significantly more to purchase and depreciate faster than equivalent conventional vehicles. Precise number-crunching on hybrids is difficult because incentives and transaction prices on normal vehicles change frequently. Hybrids, however, rarely have incentives and are priced significantly higher.
Feel-good factor
Though hybrids received a black eye from Consumer Reports they remain a subject of fascination for the car buying public. Some people are attracted by the ingenious technology itself; others are buying hybrids because they want to feel like they are doing something to reduce greenhouse gas emissions. And while hybrids may not be as economical on fuel as was thought originally, their carbon dioxide output is much lower than conventional gasoline vehicles. That environmental feel-good factor remains a major part of hybrid appeal.
On the other hand, now that Consumer Reports has weighed in against hybrids, fewer people will believe they can truly save money with a hybrid purchase.
DetNews
posted by Ottawa Gas Prices | 4:32 PM
0 Comments:
Post a Comment
<< Home