Hybrid Cars: A Foolish Attempt to Save Money

priusPlease enjoy this post from staff writer, Mitchell Pauly.  Mitchell blogs over at SnarkFinance.com

Toyota Prius’ are cars for people who grew up with diets similar to that of a hamster.  They are the same people who believe their children should receive participation trophies and are all destined to be “special” in their own unique way.  Toyota has spent untold millions creating this image in ads featuring the Prius driving through cartoon country sides while a child’s voice coos on about how it’s the “planets favorite hybrid”[1].  Well, let me let you in on something: If the Prius is Earth’s favorite hybrid than Dennis Rader is America’s favorite husband[2].

Hybrid Cars: Charlatans

You may not know what makes a hybrid car different from a regular car as a matter of technical fact, so let me explain.  A hybrid car utilizes a nickel metal hydride battery to give itself an “electric” component.  For a Toyota Prius (and many other car manufacturers) the nickel itself is mined and smelted in or near Sudbury, Ontario placing the local environment at risk and possibly displacing the local Native American population.  After refinement, it is sent to China (where most mining is still done) to be turned into nickel foam, after which it is sent to Japan to finally be made into a battery.  Sounds green, right?

All this movement to create a hybrid battery pollutes the environment.  CNW Marketing rates cars “to plan, build, sell, drive and dispose of a vehicle from initial concept to scrappage.” According to CNW Marketing, an H3 Hummer costs $2.07 per “lifetime” mile, while a Prius costs $2.87, largely due to the fact it costs more to create, not drive.  The validity of CNW’s research is as suspect as Lindsey Graham’s sexuality, but the larger picture is valid: A car has an impact on the environment before and after people are done driving it.  Next time you move to purchase a car—assuming you care—look at the lifecycle environmental impact of the car.

Hybrid Cars: They Don’t Save You Much Money

Hybrid cars save you money at the pump, but run you the “hybrid premium” at the dealer.  A hybrid currently costs more than equivalent non-hybrid in-class options, with the only advantage being the rapidly-eroding fuel economy gap.  Part of this is to recoup the uniquely hybrid specific costs, part being a premium charge or what I like to call a “douchbag tax”.  Looking at the full cost of ownership, this premium places hybrid-owners immediately in the hole vs. their non-hybrid driving neighbors.  The gap is bridged via fuel savings—with the length of time required to bridge the gap being extended by gas prices going down.  Another factor is the efficiency of the battery, which like all batteries diminishes over time (meaning the MPG the car can reach will diminish).

I am not going to try to place any hard numbers here: I can’t forecast fuel prices and the prices of cars and interest rates are variable.  Still, I’m sure you get the idea.  Hybrid cars aren’t quite as green as people would have you believe, and they don’t actually save you much money compared to equivalent non-hybrid options.  You are better off getting a used Honda Civic or similar. Trust me: They will cart you and your family to all the events you can schedule between trips to Whole Foods just as well as any hybrid.  And if you can’t afford your dream car, give yourself some options with a car loan that can be paid off relatively fast.


[1] So pretentious is this ad that it adds a letter to “favorite”.

[2] He is the famous BTK killer, BTK standing for “blind, torture, kill”.  So that’s fun.

Editor’s Note: I have a Toyota Prius and love it.  We bought it used for around $16,000, which was only slightly more than the used Hondas we looked at.  It is a great car!

Would you ever buy a hybrid?  Why or why not?  If you have one, do you like it?

 
About Holly

Holly Johnson is a wife, mother of two, and frugal lifestyle enthusiast. She is the co-founder of Club Thrifty and a staff writer at Get Rich Slowly, Frugal Travel Guy, and U.S. News and World Report's "My Money Blog." Holly has been featured in the Wall Street Journal, Kiplinger Personal Finance, Fox Business, and Daily Finance.

Comments

  1. Yes but the ability to judge others wasteful lifestyle is priceless. You can’t do that driving a regular Toyota.

  2. I don’t have any desire to by a hybrid car. None. One of the problems they have with any kind of hybrid car is that they LOOK like a hybrid car. I’ve been in a Prius, and other hybrids. They feel like I’m sitting in the Fisher Price version of a vehicle. When I can buy a hybrid or electric car at the same price as a “regular car,” and it drives, feels, is as comfortable and has all the same options as a “regular car” and the only difference is that it costs less for ME to fuel and maintain the car – then I’ll seriously look at one.

  3. LOVE this, Mitchell. It’s as if my husband wrote it himself. :-)

  4. Haha this reminds me of a social media campaign I did with Lincoln. They are targeting young adults nowadays and one thing they kept talking about was how their hybrid was the same price as the regular car. That would all be fine and dandy if they weren’t priced at $35k+!

  5. I feel like I am reading “EXPOSED!” and car manufacturers are ducking from cameras right now. I totally have a new opinion on hybrid. Who knew? Wow…

  6. Wow, I have never given much thought to these cars until today. I know some people who love their Prius because of the gas mileage, but that of course does not take into account the entire environmental impact, as you’ve pointed out. I hope these cars will be able to be manufactured in a more green manner in the future- but who knows if this is a priority for Toyota or not.

  7. We own a Toyota Camry Hybrid and just leased another one for less than the actual Camry (when you have good negotiating skills you don’t pay more) AND we have driven it over 100 miles and the gas tank is still on full. We love our hybrids and they have definitely saved us money over the years.

  8. I love love love this article. As the greenies keep pushing their agenda, I – who once was at least a semi-environmentalist – am beginning to push back against all the things they advocate. They claim the studies “all agree” about climate change but this couldn’t be further from the truth. There are an equal number of studies that show the earth is not warming. And when the supposed resolution has equally serious consequences, then what? Their sanctimonious attitude is turning people away from their cause. But I’m sure it helps them feel better about themselves. Maybe they should receive a participation trophy! Great article.

  9. Bravo on an excellent article!!! Talk to anyone who has had to replace a battery in one of those clown cars and see if they still think it is a money saver.

    • I’ve heard they are expensive, although we’ve never had to buy one yet!!!

      • my first battery pack replacement (03 civic) was comped by Honda, and I had to pay labor only: $1300 (in the DC area). The non-comped price quoted to me was ~$4k – we seriously considered trading it in when we heard that price. A friend has replaced his in his Prius, and did the work himself with a scavenged battery: $300.

  10. Finally, someone actually said it. I have been talking about this ever since those cars come out. It is more destructive to the environment to create those batteries and then also dispose of them when they go bad. This is perfect marketing to its core. Create perceived value.

  11. I’ve been thinking about getting a Prius for my next car. I think the pay back might be slightly quicker since I do have a long commute. And an added bonus is that I will be able to take the HOV lane saving time probably..

  12. I actually had no idea they were that destructive the the environment. There always seems to be something hidden in everything we buy right? Food, cell phones, you name it! I think it’s funny though when I was in the market for a new car recently and my Prius owning friends (and there are a ton here in LA) kept telling me I should get one because I’ll save money on gas. “Uh, but I can’t afford a Prius,” I’d say…and they just kept seeming to ignore that fact and get angry with me as anyone in a cult would. :) I did not end up with a super gas efficient car (VW Rabbit), but the price of the actual car versus mileage was outstanding. At least I can feel a tiny less bit guilty since I work from home and don’t have a commute?

  13. Since we live in a rural area without stop and go traffic, the gas mileage vs increased cost has never made sense. If they ever make a Tesla that doesn’t cost $100k, I’d consider that. I just saw one in California and it looks like a Corvette!

  14. Everyone time I see a Prius all I can think about is the South Park episode and the cloud of Smug from all the drivers and I giggle on the inside.

  15. I know quite a bit about the car industry. When the sales numbers come out at the end of April it will likely show that DIESEL cars will have out sold hybrid cars (it was very close last month). Why is this, you may ask? Diesel is gaining in popularity, especially for those who drive mostly highways. Also, diesel provides a lot of torque which makes for a better driving experience. The driving feel behind the wheel of a hybrid is very numb, and you are disengaged from any real road feel.

    Electric cars also have high torque feel due to the inherent characteristics of the electric motor. My future choices for high efficient personal transportation? Car; Gen II Chevy Volt with improved range, or Truck; Chevy Colorado with 2.8L diesel engine for towing.

  16. Hybrids save on gas usage only when accelerating. Once up to speed the engine switches over to use the gas.

    Anyone who does primarily highway driving is paying a premium for something that is rarely used. People who are primarily stop and go drivers benefit the most. Many New York City cabs are now hybrids, which makes total sense to me.

  17. This is awesome! This is marketing spin at it’s best. My in-laws were seriously considering buying a hybrid a year or so ago and after doing the math it just didn’t make sense for them – especially when you take the replacing of the battery into consideration. I don’t know that we’d ever buy one, but it certainly isn’t going to be anytime soon.

  18. That is crazy that they are destructive to the environment! That is nuts and so counterproductive! Also, I agree with you 100%…just not worth the money!

  19. I had one of the first hybrid cars (2003 Honda Civic variety), and I really enjoyed it – I was also downsizing from a 9mpg pick up truck and commuting 80 miles per day – so the savings in gas money vs a “regular” purchase price evened out pretty quick (I’ve run the numbers – based on gas prices alone, I “beat” the regular civic at 3 years). My state offered no sales tax on hybrids at the time – saved me 5k right there, then I got the Federal credit.

    The part I didn’t like was the maintenance and the cost of maintenance. For anything having to do with the IMA (electric power systems) or emissions system – I *had* to go to the Honda dealer. For the first few years, a “regular” mechanic wouldn’t even touch the car, and I had to go to the Honda dealer. I think that particular issue has been addressed for the most part – my regular mechanic took care of it from 2008 on – with the exception of when the battery pack needed replacing. I donated it after 180k miles because I wasn’t willing to spend the money on the repair it needed (A/C compressor) *and* it was very close to when I’d have to replace the battery pack again (at an estimated 4k).

    Would I buy one again? Certainly not a “first year model” – but that ironclad rule is now in force for *all* cars, not just hybrids. We’re considering a camry hybrid for my husband’s next vehicle. I didn’t get a hybrid because the vehicle I wanted wasn’t available in a hybrid, but I would have considered it.

  20. Not all Prius cars are the same! I bought a Prius C and it was a lot less than the full size Prius. I get 53 mpg and it is works well for my driving which is mostly on highway.

  21. As a long-time Honda Civic owner/driver, I couldn’t agree more! We live in LA – as Tonya said – the Prius capital of the world (oh wait, is that Berkeley!?!?) LoL.
    Thanks for this info! While I planned on driving my Civic to the ground, I was thinking about replacing it with a Prius. I guess I bought into the marketing – good for the environment, good for the pockets! Now I will make sure to stick with the Civic – good mileage, budget-friendly, and cheap maintenance :-) Can’t beat that with a bat!

  22. I recently did some research on whether or not a Prius saves you money and the answer is it depends on your driving habits. There is no easy answer without doing the full calculation. I have a Prius and it saves me a ton of money because I drive a lot of miles every year.

    I like to say that driving my Prius is like eating a salad. There is no joy in it, but it is good for me. Here is the calculations I did http://artofbeingcheap.com/prius/

  23. When you want a car of your own, whether hybrid or not, you need to take time to choose and pick one that is suitable to your lifestyle and budget.

  24. Well said Madame. For me this is a million dollar blog because i got a new way how to see things. My take away is when you said “look at the lifecycle environmental impact of the car”. Now i can look at the lifecycle environmental impact of the products that i use or buy. To do background checks on “green”, “environmental friendly” products or goods.

  25. I’m afraid you’ve swallowed some rather toxic misinformation. The CNW Marketing report was debunked seven years ago, for making biased assumptions that explicitly penalized the Prius (assuming Hummers last 35 years and 300,000 miles to the Prius’ 12 years and 109,000 miles), as well as contradicting a large body of automotive research on the allocation of lifecycle energy costs (assuming operations only accounts for 2-10% of lifecycle costs, contradicted by half a dozen lifecycle analyses in the source below). You can read about the flaws with the analysis here:

    http://www.pacinst.org/wp-content/uploads/sites/21/2013/02/hummer_vs_prius3.pdf

    As for the nickel mining in Sudbury story, that was posted by the Daily Mail, which has since been retracted because the environmental damage attributed to the Prius both happened, and was cleaned up, decades before the Prius ever existed, meaning that hybrid cars were never responsible for any of the attributed environmental impacts to begin with. You can find their retraction here:

    http://www.mailonsunday.co.uk/news/article-417227/Toyota-factory.html

    Also, your remark about ‘displacing the local native American population’ has no basis in fact, and is nothing more than a fallacious appeal to emotion on your part. Sudbury is an established city in Canada with a population of 150,000, and not some backwater wilderness town characterized by First Nations reserves. Furthermore, the nickel mining industry has been established for more than a hundred years – blaming hybrid cars alone for the environmental impact is disingenuous at best, when the nickel produced there has gone into more consumer products than you can imagine.

    It may shock you, but hybrid cars actually are characterized by a reduced environmental impact, and the facts bear that out. The idea that it doesn’t contradicts lifecycle analyses by the Argonne National Laboratory, the UCLA, and Toyota themselves (links available below). If you’re willing to throw out your preconceived notions of hybrid cars and their owners, and take a cold objective readings of the facts, you’ll find that the stereotypes surrounding them are grossly inaccurate, and that hybrid cars really do live up to their claims of reduced environmental impact.

    Argonne National Laboratory liefcycle analysis:
    http://www.transportation.anl.gov/pdfs/TA/378.PDF

    UCLA lifecycle analysis:
    http://www.environment.ucla.edu/media_IOE/files/BatteryElectricVehicleLCA2012-rh-ptd.pdf

    Toyota lifecycle analysis:
    http://s3-eu-west-1.amazonaws.com/cdnlive.toyotaretail.co.uk/Environment-PDF/priusEnvironment.pdf

  26. Addendum to my prior comment: The remark concerning the attribution of environmental damage to hybrid cars alone wasn’t directed at anyone in particular. It was meant to point out that nickel mining is a common factor to many consumer goods, which includes all cars in the form of nickel alloys and stainless steel components. As a common factor, it cannot be isolated as proof that hybrids incur a greater environmental impact in manufacturing than normal cars.

  27. Wow, what oil company paid you to write this? You should really cite your sources when you’re going tear something down. A hybrid is next on my list of cars to buy. They don’t cost $35k, and the used ones definitely do not cost $35k.

  28. Don’t even get me started! I admit it…. I use to drink the “Hybrid Koolaid” until the battery went up and I had to replace it… $4000 was the ticket price. Seriously!?!?! Never ever again will I purchase a Hybrid vehicle.

  29. I hadn’t been thinking about buying a hybrid because personally I like to stick with what I know works and I don’t know a ton about hybrid cars but it’s sounding like they are lying to me and I don’t like being lied to so I’m going to stick with my non hybrid car for now.

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