Looking to cut your energy costs? The famous Toyota Prius, the symbol of eco-conscious consumers everywhere, may not be the best way.
Bloomberg's John F. Wasik explains, "Let's say you bought a stripped-down Toyota Prius for $22,000, received a $4,000 trade-in allowance and put $2,000 down. You also paid about $1,300 in sales tax. You then finance the balance, $17,300, at 6 percent annual interest for five years, resulting in a payment of $334 a month. You will eventually pay about $2,800 in interest on the loan. If you save $1,000 a year in gasoline costs, it will take you almost three years to recoup your investment." In addition, "you may succumb to the buffet effect -- and drive more -- thus negating some of your savings and extending your payback period." You might save more if you bought a Toyota Yaris or Honda Fit, which "retail between $12,000 and $14,000 for the basic models," and still manage mpg numbers in the low 30's.
Autoblog Green notes, "The Yaris is a lot cheaper but gets lower mileage. A driver who doesn't accumulate many miles may end up spending less in total payments and fuel costs and would have an incentive to drive less
In a separate post, Autoblog Green calculated how many miles you would have to drive a hybrid before it paid off. Comparing hybrids to their non-hybrid counterparts, (the Honda Civic vs. the Honda Civic Hybrid, for instance,) they found that in every case, it would take more than 35,000 miles of city driving or 97,000 miles of highway driving to offset the cost of the hybrid upgrade.
This test has been done before, ad nearly every time the result is similar. We would caution, however, that no one ever seems to include resale value in these calculations -- and last we checked, a Prius was still earning back more of its purchase price on resale than nearly anything else.
Still, maybe you would be better off in a Yaris. You could always use the money you save to insulate your home and cut your carbon footprint there.
Compare hybrids to small cars yourself with U.S. News' car rankings and reviews.
