The rising cost of gasoline at the pumps has caused many people to rethink their spending habits and forced them to consider alternative ways of saving their money. The most practical means of reducing the price you are paying at the pump is to buy a fuel efficient vehicle. People are getting greener and buying hybrid vehicles to increase their average miles per gallon (MPG) and thus pay less for gasoline. However, after researching and analyzing data for forty-two vehicles, the best bang for your buck out there is without a doubt a sub-compact car. While the hybrid vehicles are more fuel efficient, they unfortunately are way too expensive and don’t yield a greater return on the investment compared to what you would save in trips to the gas station. Let me explain.
Collecting and Organizing the Data
I assembled a list of forty-two vehicles, including hybrids, sub-compacts, small cars, mid-size cars, luxury cars, and SUVs. My goal was to find out which is the best vehicle for fuel economy. Upon going to the manufacturers’ websites, I calculated the average of city/highway MPG. With the help of fellow Babeler Jason Morgan (aka. Babeled’s very own bean counter), I entered my data into an Excel worksheet, where I calculated Cost per Mile (CPM) for every vehicle in the data set. The average CPM represents how much gas money you are spending on each mile that is driven at the average MPG. Cost per Mile is a significant indicator of your vehicle’s fuel efficiency because it takes into consideration how much money you are spending on average each mile you drive.
Which Car is Better in Terms of Fuel Economy?
Most Fuel Efficient Vehicle In its Class
Hybrid Cars
- Toyota Prius: $.09 CPM
- Honda Civic Hybrid: $.09 CPM
Sub-Compact Cars
- Smart ForTwo: $.11CPM
- Toyota Yaris: $.12 CPM
Small Cars
- Toyota Corolla: $.13 CPM
- Honda Fit: $.13 CPM
Mid-size Cars
- Nissan Altima: $.14 CPM
- Hyundai Sonata: $.15 CPM
Luxury Cars
- BMW 328i Sedan: $.17 CPM
- Lexus ES: $.17 CPM
SUVs
- Ford Escape: $.16 CPM
- Hyundai Santa Fe: $.19 CPM
Hybrid SUVs
- Ford Escape: $.13 CPM
- Saturn VUE: $.14 CPM
Is it Worth it to Buy a Hybrid Car?
With the growing concern over increasing gas prices, many car manufacturers are advertising that the hybrid cars are the best vehicle to buy in our present economy due to their higher MPG. Well I am here to tell you, the consumer, don’t be fooled. If you want to buy a hybrid car because you are proactive about our environment and want to be “greener”, then that is the only reason you should buy a hybrid car. Purchasing a hybrid car is more like a personal statement over the growing concerns regarding global warming. However, if you are looking for a vehicle with good fuel economy that is the best bang for your buck, a hybrid car is not economical by any stretch of the imagination.
Along with calculating the CPM for each vehicle and the class of each vehicle, I also input the suggested starting price for each vehicle (MSRP). Keeping in mind that my data is completely based off of averages, Jason Morgan developed a formula to show how many miles you would have to drive a hybrid car or hybrid SUV to make up the difference in MSRP in terms of how much money you would be saving on gas. The formula, lets call if the Breakeven Formula, is a great indicator of showing you whether or not you are really saving money buying a hybrid vehicle.
Breakeven Formula
Breakeven Miles = Average Difference in MSRP ÷ −(Average Difference in CPM)
Note: Although this equation is relatively simple, it is imperative that you divide MSRP by the negative of average CPM, so that you see how many miles you would have to drive in order to breakeven. If you did not put the negative symbol in front on the average CPM, the breakeven miles would actually be negative and therefore the data would be insignificant.
- According to my data, the hybrid car is $.01 cheaper per mile to drive than the subcompact car, however due to the high MSRP of hybrid cars, you would have to drive a hybrid car nearly 900,000 miles to make up the starting price difference in gas savings.
- Based on CPM, a hybrid car is $.03 cheaper to operate than a small car. Due to the high prices of hybrid cars, you would have to drive about 368,000 miles to make up the starting price difference in gas savings.
- A hybrid car is $.04 cheaper to operate than a mid-size car, however due to the price of hybrids, you would have to drive at least 42,000 miles to make up the starting price difference in gas savings.
- A hybrid SUV is $.05 cheaper to operate than a regular SUV, however you would have to drive the hybrid SUV over 183,000 miles to make up the starting price difference in gas savings.
The hybrid class of vehicle is so overpriced for its fuel economy that if saving money on gas is what you are interested in, your best bet is to buy a sub-compact car. Even a small car is more economical than a hybrid, as driving 183,000 miles in any car, is pretty much driving it into the ground. Buying a hybrid car over a mid-size car might be a little more practical, however you still would not see the difference you are saving in gas until you reach 42,000 miles.
Conclusion: Don’t Buy a Hybrid to Save Money
When I first decided to research and write this piece, my intention was to show how much better the hybrid was on fuel economy. However, after analyzing the data, I would be doing an injustice to you if I told you to buy a hybrid car in order to save money. While hybrid vehicles are the most fuel efficient, they are expensive. Whereas the sub-compact and small cars are very similar in terms of fuel economy and much more affordable. It’s interesting to note that that the Chevrolet Tahoe, which was given the title “Green Car of the Year” in 2008, only gets on average 21 MPG and $.19 CPM. By the way, the Tahoe Hybrid’s MSRP is $50,000. Eventhough there are many other vehicles, hybrid and not, that are more fuel efficient than the Tahoe Hybrid, this behemoth somehow won this auspicious title. Overall, it is safe to say that if you are looking to save money on gas and in general given our present economy, then buy a sub-compact car or a small car. If you are pro-active about our environment and aren’t as concerned about money as the average consumer, then buy a hybrid.
26 Comments
Thanks for taking the time to go through and put together those numbers. This must have taken a long time to put together! I’m not going to buy another car for a few years now, but this’ll be a good starting point for my cost analysis.
Very good article and most informative for a new car buyer looking to make their dollar last longer in these economically trying times. I know this will help many people. I, like everyone else paying WAY TOO MUCH in gas, have to really plan out how I’m going to pay for gas. About 30% of my income goes towards getting from A to B and something must be done. It is putting such a strain on the economy as the oil companies bleed us dry. But until that point when we find another way, the best thing to do is to take your advise and be efficient with our energy and fuel purchases. Again very good article.
Great article Greg. It must have taken you forever. It’s nice to see that my car (Toyota Corolla) is so awesome. I’ve always known but now it’s official.
I’ve got a Corolla too and it most certainly rocks and has great fuel efficiency.
I always contemplated getting a Hybrid because of the $2000 government refund, and the reduced gas costs, but it’s obviously not the best choice out there.
Now the question is, can I put down my pride enough to drive a Smart Car. Everyone I’ve ever seen driving one looks completely ridiculous.
There is a government refund for driving a hybrid?
Yes there are government incentives and a hybrid will hold its value much better than a sub-compact car over 3 years due to the lack of wear and tear on the gas portion of the engine.
Used hybrids are getting top dollar for trade-ins right now due to the waiting list demand. I know because I have been trying to get my hands on a prius. People with 3 year old hybrids that have over 60,000 miles are naming their price to sell or trade-in.
You should factor the government incentives in as well as depreciation.
The incentives are for environmental emission reasons, def. not for fuel economy.
P.S. the new hybrids (2009-2010) can go up to 60 Mph for a distance of 30 miles without using their gas portion of the engine.
The new Prius features solar panels built into the roof…I can’t wait till I get one!
Jon, solar panels on a car sound pretty damn cool. But you know you’d really be the s#it if you drove around town with a wind turbine attached to the roof of your car.
I always wondered if you could put wind turbines in tunnels that ran from your head-lights to your tail-lights. That way, at 60Mph-plus, you could really spin the crap out of an impeller.
Solar panels on the roof – wish I had patented that when I thought of it…this is why I am, and will always remain, poor.
Jon – the wind turbine sounds like an excellent complement to the current Hybrids. Since they are typically most inefficient at high speeds, this augmentation probably provides an opportunity to complete the fuel efficiency package.
Jayson,
So far Toyota says that the solar panels on the roof of the 2009 Prius only power the air conditioning, but its still pretty cool. There are rumors that it might help charge the Lithium Ion battery which can also be charged by plugging it into your home and also by the friction created from the breaking system.
Now, I know that plugging your car into your home outlet doesnt solve global energy problems (as most electricity is from burning coal and oil)…unless of course your house has solar panels..lol
VW just came out with a reverse hybrid. Instead of the electric motor doing the initial acceleration and the gas motor doing highway driving, it is the complete opposite. The result is 60-100 mpg.
Anyone notice that gas was in the 3.70s today?
Sorry, I meant Jason
That reverse hybrid VW sounds interesting. Here’s a link on it.
According to this article, the tax credits you would get for buying a hybrid are being phased out. According the Energy Policy Bill signed in 2006, the tax credits either stop by 2010 or until the manufacturer sells 60,000 models. Once it reaches its cap, a one year phase out of the tax credit incentives decrease by 50% and then by 25%. Both Toyota and Honda have already reached their 60,000 cap. Toyota has already stopped their tax credits and Honda’s will end in December 2008.
From what I gather, the $2000 you would receive as incentive expired in 2004 and was replaced by the Energy Bill in 2006.
Here is a cool article about the 2009 solar-powered Toyota Prius. Its like EPCOT on wheels. Is a Prius more expensive than a sub-compact car? Of course! After 6 years and 150,000 miles, with fuel economy considerred, a sub-compact will end up costing less.
Let’s not be penny-wise and dollar-foolish though. What is it worth to drive pure innovation on wheels? What is it worth to have a really impressive car that features HID lighting, a DVD navigation system, 9 speakers, solar panels, and auto-parking? What is it worth to have both a practical car for work and a car that still dazzles and impresses in the valet line? What is it worth to be able to fit 4 people in the car (my size) with room to spare? I could go on…but lastly..what is it worth to be traveling up to 60 Mph and only hearing the soft wind flow over your aerodynamically designed car with no engine noise; knowing with confidence that your air conditioning is not straining your engine or battery one bit?
Now before you get the wrong impression, I am a moderate conservative who has left a carbon footprint that could probably be seen from outer-space. I have littered in land, sea, and air, materials that will never break down. Just the smoke I have exhaled in my lifetime could be responsible for part of the hole in the ozone layer. I am not an environmentalist who is preaching “Hybrids are the answer to stopping global warming…yeah!”…umm no thats not me. However, I think the technology is cool as heck, I think spending $200 a month is gas instead of $1000 is great, and I just flat-out have fallen in love with the body design of the Toyota Prius.
Sometimes we make financial decisions we regret in hindsight. We realize that we could have afforded a little more than what we chose. Just a few dollars more per month could mean a better quality of life…and that my friends is priceless!
There is no question that the Prius takes a stylish, roomy, and high-tech approach to an eco-friendly existence on the roads. While not the cheapest alternative you still get a lot of car for what you pay for.
“It’s almost worth putting my pants on for.”
I can’t believe that dissertation just came from the guy who wrote a blog called “My SUV gets 16 mpg” and was proud of it.
First of all, the post was called “My SUV gets 14.5 mpg” not 16 and second, you must have missed the part where I said:
I am proud of my SUV and I will miss it when I step into a Prius. Heck, that SUV accounted for some great times with over half the authors of this blog site.
There is no hypocrisy in my so-called “dissertation” (not sure what doctorate-review standards you are familiar with). Maybe if I preached the environmental benefits of a hybrid, then yes, I would be a hypocrite after driving a Dodge Durango and a Ford Expedition. No, see I love the idea of the Prius because its easy on the wallet and it has awesome innovative technology. Capiche?
Not my fault you can’t appreciate irony.
I love irony. Going from an SUV that gets 14.5 mpg to a hybrid that gets 51 mpg is something I’ll never hear the end of. Believe me, I am already getting it and I haven’t even bought it yet. I thought you were hinting at environmental hypocrism, my bad.
What it comes down to is money and fuel economy as this post suggests…
My SUV’s monthly payment + insurance + gas + natural wear and tear = $1,600 per month. The Prius will be $600 per month for the same. An extra grand per month will be nice.
Ditching the gas guzzler is smart for a lot of reasons.
Absolutely – I didn’t realize the true savings until I got rid of mine. Jon, you are quite correct in the ancillary cost reduction realized by trading in an SUV is quite huge for a good number of reasons. Stuff like state registration, while varying from state to state, is usually almost twice as much for an SUV or truck than for a car.
Getting back to the main point of this article, I could opt for a sub-compact instead of the hybrid which would mean $300 a month intead of $600, however, I would be really unhappy and cramped. I have sat in a Yaris and I have sat in Prius (world of difference for me with leg room).
Sub-compact: $12,000 – 36 Mpg
Prius: $22,000 – 51 Mpg
By the time you break even on that $10,000 difference with the fuel savings, it will be well after the life of either car.
Exactly. It’s nothing against hybrids – they were a noble attempt and a great stepping stone. Hybrids just don’t have a straight out cost/benefit analysis that returns a positive result. They are still sweet and good for someone who simply wants to be environmentally conscious or an early adopter of the new technology.
It’s never felt so good to be short (5′7″).
very helpful tips..
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