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Can gas savings make up for a hybrid's higher sticker price?

When deciding between a hybrid such as the Toyota Prius and a gas-only vehicle, how much city driving you do and how long you plan to keep the vehicle are just two of the factors to consider.

June 10, 2012|By Jerry Hirsch, Los Angeles Times
(Dave Wheeler Studio, For…)

Once a rarity in the showroom, fuel-sipping hybrids are becoming an increasingly common option at dealerships.

Need a big luxury sedan with all the bells and whistles that still gets 29 miles to the gallon in everyday driving? Check out the Buick LaCrosse with the eAssist mileage boosting system.

How about a station wagon you can pack with children and groceries and still get 42 mpg? The Prius v fits the bill. Looking for something with high style? Wait for the upcoming edition of the Ford Fusion hybrid that's expected to hit 47 mpg.

All these new hybrids are a welcome option for consumers who face high gas prices.

But are they worth the premium you might have to pay? It depends. If you decide to keep a hybrid for more than five years, the answer may be yes. But if you're one of those who like new cars every three years, it may not make financial sense.

Here's what you need to consider when deciding to go hybrid or not.

Where do you drive?

Hybrids are great for people who drive "mostly in the city and urban places," said David Champion, who directs the automotive test program at Consumer Reports.

It's all in the way a hybrid works.

A hybrid routes energy — much of it generated when the vehicle brakes — into a battery. It then uses that electricity to power an electric motor to get the car moving from a stop and to assist in accelerating, passing or hill climbing, all areas in which cars burn up the most gas.

Hybrid systems shine in stop-and-go and slow-speed traffic, said Raj Nair, the global product development chief for Ford Motor Co.

Although adequate, hybrids generally don't make great highway cars, Champion said. They're typically slower on the highways and have less cargo space than the gas-only vehicles of similar size.

Here's an example of just how your particular drive affects the economics of a hybrid vehicle.

Let's say 75% of your driving is on the highway. At $4 a gallon, it'll cost the Camry hybrid driver $2.50 to go 25 miles, while the regular Camry driver will pay $3.12, according to the Environmental Protection Agency.

But if you spend most of your time in city traffic over that same distance, the savings are much greater — $2.38 compared with $3.70 for the gas-only car.

The savings could be big enough for you to put up with some driving quality and cargo carrying compromises.

Is there a price premium?

You need to figure out how much money saved at the pump will add up to the cost difference between a hybrid and the same or similar model in a gas-only vehicle.

Let's go back to our Camry example. On average, the hybrid version sells for $25,850, about $3,300 more than the regular model, according to car price information company TrueCar.com. Factor in the tax and licensing fees on both versions and the difference climbs to close to $3,600, depending on where you live.

Using $4 a gallon, 13,500 miles of annual driving and a ratio of 55% city driving, the hybrid saves about $650 a year. That means it takes about five years to save enough in gas to recoup the extra expense at today's prices.

Our analysis of hybrid and regular Ford Fusions and Hyundai Sonatas also came up with paybacks in about the same range.

Those who drive 75% or more of their miles at highway speeds aren't likely to make the difference back during the life of the car. The payback comes at about the 10-year mark.

However, for some cars — mostly the more expensive brands that don't charge a premium for the hybrid models — the savings are immediate and significant.

Buick sells hybrid and gas-only versions of the LaCrosse with the same sticker price of $31,115 for similar trim and features, according to the EPA. When you plug in our fuel cost and mileage numbers, the hybrid version saves $725 a year on fuel when driven 55% of the time in city traffic.

The hybrid and gas-only version of the Lincoln MKZ also have the same sticker price — $35,630 — but the hybrid model saves the driver almost $1,200 a year based on our analysis.

You can compare vehicles and your own calculations based on your driving patterns at this handy EPA website: FuelEconomy.gov.

Should I worry about the new technology?

Consider this: 95% of all the Toyota Prius hybrids sold since 2000 are still on the road today. That's a lot of years of fuel savings for their owners.

What about driving?

There's a consensus among car critics and test drivers that hybrids generally are not as much fun to drive as similar cars with conventional powertrains.

Champion of Consumer Reports compared the Toyota Prius — the bestselling hybrid ever and one of the top-selling passenger cars this year — to the regular Camry. Both are considered "family sedans" in the EPA ratings.

The Prius is considerably slower than the gas-only Camry — by more than two seconds on a zero to 60 mph test. It takes longer to stop, and it has less interior space.

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