Hybrid cars are more expensive than conventional cars, sometimes by $5,000 or more. The obvious question is whether it’s worth it? Do you recoup that additional vehicle cost from direct gas mileage savings at the pump? The answer is: probably, but there are many other ways that buying a hybrid can save you money, some you may not know about.
First, let’s quickly review the inherent gas mileage savings one can enjoy with a hybrid car. With a hybrid like the Ford C-Max Hybrid, an efficient battery pack provides an electric assist to the gas-powered engine and this allows the vehicle to achieve 20–35 percent better gas mileage than a conventional car. The Toyota Prius, for example, gets an average of 44 mpg in real-world driving. This alone can result in a savings depending on what you are considering for an alternative car. There are others ways to save also.
Federal tax credits: Owning a hybrid may entitle you to federal tax credits. How much a given hybrid owner can expect to get from a federal hybrid tax credit depends on many factors. To see how much of a tax credit you might be able to claim, consult the IRS website as these credits change frequently.
Local tax credits and perks: Some states and cities offer incentives for hybrid drivers, including tax credits, and the convenience of being able to drive solo in “HOV” (high-occupancy vehicle) highway lanes. Many cities also offer privileges to hybrid owners, including free or discounted parking. Find out what your state offers at the Union of Concerned Scientists website. You can also contact your city clerk’s office to find out if a new hybrid would entitle you to parking perks.
Workplace incentives: Some employers are encouraging their workers to commute in hybrid vehicles. At some forward-thinking companies, including My Organic Market, Patagonia, and Clif Bar, and others, employees receive up to $5,000 for purchasing or leasing a hybrid, essentially eliminating the price premium.
Loan Discounts: Financing a hybrid purchase can be cheaper than financing a conventional car. Many banks, especially credit unions, offer preferential loan rates for hybrid cars.
Insurance Discounts: A number of car insurance providers, including Farmers Insurance Group, Geico, and Travelers, offer discounted insurance rates to hybrid drivers in some states.
Resale Value: When it comes time to resell a car, hybrid owners have been delighted to discover that their cars have held their value better than non-hybrid versions of the same car. For a quick estimate of the average resale value for a car of the type you’re considering, consult the Kelley Blue Book to look up models of the car you’re considering
So, as you can see, the value of a hybrid purchase can be far more than just the savings in gas mileage would suggest. If you are considering a hybrid, calculate the total savings over the time you anticipate owning the vehicle. Chances are that you will be pleasantly surprised with the actual savings that you could achieve.
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