We’ve come a long way since hybrid cars were a punchline on South Park. What began as a niche way of lessening a car’s impact on the environment has become increasingly common. In fact, we are getting closer to a world that primarily uses electric cars. Hybrids are no longer an idea that only excites climate activists.
However, that does not mean everyone is on board. While most of us care for the environment, we’re not necessarily ready to sacrifice our finances for it. The impression is still that hybrids are more expensive to drive and insure than traditional cars even with the savings on gas.
The good news is that this is no longer entirely true. In fact, hybrid cars can now be better for your bottom line than traditional cars. Here’s why.
Lower price differential
It is first important to mention that, while hybrids cost far more than traditional cars in the past, this is no longer the case. Hybrids are still around $4,000 more expensive than their traditional counterparts. But that is only if you are comparing the same model. If you specifically want a hybrid and do not mind shopping around, hybrids are far more affordable than they once were.
Even if you take the $4,000 extra as a rule of thumb, this does not add all that much to your monthly payments if you are buying through a loan. Still, this does not make a good case for hybrids being cheaper! Rather, that comes from just about everything else hybrid-related.
Gas
It is in terms of gas that the regular savings become most clear. Hybrids use significantly less fuel than a traditional car, and if you go by the average mileage incurred by drivers, you will spend over $500 less in fuel with a hybrid. Whether these savings are significant to your balance sheet depends on you. However, since you can save money while benefiting the environment, this already begins to show the value of a hybrid.
But what about other expenses? Let’s take a look at insurance.
Hybrid insurance
Insurance on a hybrid car is necessarily more expensive, as they are more expensive to replace than their traditional counterparts. However, this does not mean you will be paying that much more for hybrid car insurance. Why? Well, insurance companies are providing incentives for hybrid drivers.
For example, you may get big discounts simply for driving a hybrid. If you keep your mileage low, these discounts become more significant. Insurance is also now more calibrated towards the needs of hybrid drivers, covering things like charging stations, portable chargers, and even roadside assistance in towing your car to the nearest charging station in case of a breakdown.
You won’t pay less for hybrid insurance than traditional insurance, but the differential won’t hit your pocket particularly hard and definitely will not offset the savings on gas.
Tax incentives
Another reason buying a hybrid can be good for your bottom line is that you receive tax incentives. When you purchase a hybrid, you receive a tax credit, with incentives worth between $2,500 and $7,500. This offsets part of the extra expense on the purchase price of the hybrid.
Maintenance
Maintenance is generally seen by hybrid skeptics as the biggest financial concern. Because hybrids are more expensive, it is thought that maintaining, repairing, and replacing parts will be more expensive. However, this is not the case at all.
Since hybrids have fewer moving parts than traditional cars, some studies report that hybrid drivers spend half as much on maintenance than drivers of traditional cars. Furthermore, hybrid batteries are becoming cheaper and longer lasting. Most hybrid batteries today come with a warranty for the first hundred miles, as hybrid batteries are expected to last beyond that point. Since most people trade their cars in before they reach one hundred miles, you probably won’t ever replace your battery. Driving a hybrid is no longer only good for the environment. It is good for your bottom line too. While the purchase price is necessarily higher, and insurance will cost a little more, there are many incentives that offset any extra costs.