Newsday Hybrid Payback Calculations

They compare Camry to Prius and HCH to Normal Civic

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Hybrid a change for the better?

The high cost of gas is driving people to buy these cars, but the savings may not be as much as they think

BY TOM INCANTALUPO
STAFF WRITER

June 9, 2004

Linda Zimmerman had had just about enough, she said, of trying to keep her SUV filled with $2 plus-a-gallon gasoline. Last month she bought a Honda Civic Hybrid, a relatively new type of gas-thrifty car that has become chic in some circles and is looking better and better to some consumers as fuel prices rise.

"It was costing me so much money," said Zimmerman, 44, a home-care nurse from Glendale. "I was going to the gas station two or three times a week."

Few would dispute the contributions of hybrid cars to cleaner air and reducing oil consumption. But the savings in cold cash on a hybrid might not be as great or as quick as some consumers think. Bottom line: It could take tens of thousands or even hundreds of thousands of miles before the hybrid owner begins saving money.

It might seem a simple calculation: Using fuel economy estimates from the U.S. Environmental Protection Agency, you could figure a fuel cost per mile for a hybrid car and a conventional car based on current gasoline prices. The difference between the two costs - the savings per mile - could then be divided into how much extra you paid for the hybrid. The result would be how many miles it would take to break even and start saving money on the hybrid.

But there are complications. Few if any cars, including hybrids, achieve the EPA fuel economy estimates in real-world driving. And actual mileage depends upon driving style.

Consumer Reports said the Civic Hybrid it tested attained 36 miles per gallon overall in its tests, compared with the car's EPA rating of 48 in combined city and highway driving. The magazine said it got 29 mpg with a conventional Civic, compared with the EPA's 34 mpg.

Consumer Reports testers got 44 mpg in a Prius, which is EPA rated at a combined city/highway of 55. The combined EPA figure for the Toyota Camry, a sedan comparable in interior room to the Prius, is 26 mpg but Consumer Reports says it averaged 24.

Next comes the price. Dealers say nearly everyone is paying sticker price for hybrids because the cars are in high demand. "The hybrids are on fire right now," said general manager Brian Benstock at Paragon Honda in Woodside, where Zimmerman bought her car.

Sticker price for the Prius is $20,810 with freight, with a $400 discount available only for recent college graduates. What's more, dealers say virtually every Prius is arriving with at least one of three options packages, raising the price to at least $22,000.

Then there are taxes. Hybrid buyers do get a one-time $1,500 federal tax deduction, but accountant Peter Ciccone of Melville says the savings would amount to between just $150 and $579, depending upon the buyer's tax bracket. The higher price of the hybrid means higher sales tax, too, paid in full by purchasers, though only in part by consumers who lease.

The Camry sedan comparably equipped to the Prius, a four-cylinder LE, can be had for about $19,000 after rebates and discounts, plus sales tax, local dealers say, for a total of $20,663

Even if one could find a Prius with no options for $20,810, then, it would cost $1,810 more than a comparable Camry, plus another $158 in sales tax for consumers who buy, less the $579 maximum federal tax benefit, or $22,052 - a final extra cost of $1,389.

The greater the cost differential between the two cars, the longer it will take the hybrid to pay for itself. A drop in the price of gasoline would push the breakeven point further off.

Still, using Consumer Reports' fuel economy results and assuming a purchase rather than lease and the maximum federal benefit, it would take only 34,725 miles for the Prius to pay for itself - less than three years of driving at 15,000 miles a year. Thereafter, the fuel savings would total $600 a year on 15,000 miles at current gas prices.

A comparison of hybrid and conventional Civics yields less encouraging results. The hybrid lists for $21,140 with freight and automatic transmission, and $1,850 in taxes. The comparable conventional Civic model, an EX sedan with automatic transmission and side airbags, can be had for about $17,000 after discounts plus sales tax for a total of $18,488. Account for the $579 federal tax benefit, and the hybrid would cost about $3,923 extra, plus another $350 in sales tax.

Do the math, and it would take 230,765 miles of driving for a Civic hybrid owner to break even. Thereafter - assuming the car lasted that long - fuel savings would be $255 a year at current prices.

But Zimmerman, whose previously carless husband now has the Toyota 4Runner SUV, says she feels good in doing more than just complaining about gasoline prices. "I can't stand to see it and I feel this is something I can do about it," she said.

Donna Kramer, 42, a clinical social worker, says her sensitivity to the environment, which grew when she relocated from Port Jefferson to Orient, was a prime motivator for her to trade her 10-year old Mercedes-Benz E320 for a Prius. "I've changed over 10 years," she said, "and the Prius more closely resembles my lifestyle and the things I value today."

Honda spokesman Chris Naughton in New York said, "Over 90 percent of Civic Hybrid owners are happy with the car and their fuel economy."Toyota spokesman Wade Hoyt says it provides fuel savings tips in a booklet given to Prius purchasers but that it has to publish the EPA mileage estimates on its window stickers by law.

Dan Becker, who heads the Sierra Club's global warming project and says he averages about 44 mpg on his own, earlier generation Prius, predicts that the cost premiums for hybrids will come down as greater volumes are produced. "We're at the beginning of the hybrid age," said Becker, "and we encourage people who care about the planet they will leave their children and about cutting our dependence on oil to look at a hybrid."

Do green cars save you green?

Hybrid cars, which conserve fuel with their gas/electric engines, may be better for the environment, but they're also more expensive. If you hope to recoup the money by saving on gas, you'll have to drive one for a while to break even. Chart below assumes an average price of $ 2.239 a gallon of regular unleaded.

Conventional VS. Hybrid

Toyota Camry Toyota Prius

Milieage 24 mpg Mileage 44 mpg

Price $20,663 Price $22,052 ($1,389 more than Camry)

How far you'd have to drive the Prius to recoup the added cost : 34,725 miles

Honda Civic EX Honda Civic Hybrid

Mileage 29 mpg Mileage 36 mpg

Price $18,488 Price $22,411 ($3,923 more than a conventional Civic)

How far you'd have to drive the Civic Hybrid to recoup the added cost: 230,765 miles.

NOTE: Mileage figures based on Consumer Reports results. Price estimates include sales taxes, discounts and rebates for conventional cars, and federal tax benefits for Hybrids.

COMPILED BY TOM INCANTALUPO