Ford Fusion Hybrid Earns Cost Back Fastest

Fusionhybrid
With only 5.6 years to earn back the premium a driver pays for its hybrid drivetrain, the Ford Fusion Hybrid is the hybrid vehicle that pays off the quickest, according to the San Francisco Chronicle.

The price discrepancy between the hybrid and non-hybrid models is a relatively slim $3,200, so at current gas prices, drivers are likely to break even in just under six years.

The Chronicle looked at several hybrids and found it will take awhile to earn your money back compared with non-hybrid versions. The Mercury Milan Hybrid takes 13 years to break even, the Toyota Camry Hybrid will take 15 years, and the Honda Civic Hybrid 17 years.

We have a minor dispute with the break-even numbers for the Honda Insight and Toyota Prius, which the Chronicle put at 16.5 years and 20 years, respectively. Because they were matched against non-hybrid models — in this case, the Honda Fit and Toyota Yaris — the numbers look much worse because those are entry-level cars. Anyone who’s been inside both a Prius and a Yaris knows the cost difference reflects far more than just the hybrid engine.

Of course, all these numbers get tossed out the window with any fluctuations in gas prices. As someone who’s been covering gas prices for the past three years can attest “at current prices” is a phrase that is nearly meaningless.

7 Hybrid Cars: Will They Save You Money on Gas? (San Francisco Chronicle)

Comments 

JTH

The cost back issue is not the most important issue for me or for many hybrid buyers like me. It's worth spending the extra money to know that the emissions output from my automobile is greatly reduced. That is a much higher priority for me than bottom line money savings. I would like to see that issue noted in articles such as this.

Doug G

Would you be better off getting a Yaris and spending the extra money on Carbon Credits?

Bob

As best as I can tell, the article doesn't factor in the opportunity cost of paying more up front for a hybrid.

http://en.wikipedia.org/wiki/Opportunity_cost

Bob,
that's exactly what the article is about. It will take 5.6 years to make up the opportunity cost on the Fusion. The additional cost on top of a similarly equipped non-hybrid model.

segfaul

Isn't the Fit supposed to drive far better than the Insight?

Todd

The article is flawed as it does not take into account the amount the dealer adds on top of the difference. That's what I believe Bob is referring to when he notes 'opportunity cost'. Figure in at least another 2k for the right to buy a Fusion hybrid and it puts the payback out at least 6-7 years.

Kan

Do they count the time stopping/filling gas at gas station? At a BP station near my house, the flow of gas is very slow, it takes forever to fill a full tank.

Zack

The San Francisco Chronicle is not qualified to do this type of study. The proof is suggesting that the mid-size Prius is the same car as a Yaris, except for the hybrid powertrain. The Chronicle should leave automotive matters to professionals like Stephen Markely.

Dan

5.6 year payback means that your saving probably 12-15% of your additional investment every year (don't have a calculator convenient). If you're borrowing, the cost of that extra money is probably 6-8% (the interest on the loan), so there is no reason from a purchasing price angle to not to buy the hybrid model. You're throwing away money by not doing so. If you're paying cash, it depends on what return you're getting on your investments, but it won't be that high if it is as likely as you are to use gas. That means that either way, you're just wasting money not buying the hybrid model.

Ofcourse, this all assumes you receive equal satisfaction and equal maintanence costs, etc.

Bob

@David Thomas:
Unless I'm misreading the article, it simply takes the price premium for the hybrid and divides it by the estimated annual gas savings. What if you bought the gas-only car, took the money you needed to pay the hybrid price premium premium and (to use a simple example) put it in the bank instead of buying the hybrid? The interest you earn would further stretch out the payback timeframe. (Not by much at current interest rates, but this is just one example).

Kyle

Dan you'll never be confused with Warren Buffett. If you take the $3-4k you'd save by buying a gasoline powered car vs a hybrid and invest it upon ownership you come out ahead. Hybrids are bad purchases from a financial point of view especially when gas is under $5 a gallon.
One is only wasting money if they buy a hybrid - not the other way around.

Paul

They didnt factor in all the time wasted at a Toyota dealer getting all the recalls done either.

yes anyone who’s been inside both a Prius and a Yaris knows the cost difference reflects.
http://www.encoreconsulting.net/

JR

For the Ford Fusion, were you comparing the hybrid model to the Fusion Sport, their most expensive Fusion model? Or did you average out the price across the non-hybrid models? Looking at the price of the "cheapest" Fusion and the hybrid, the difference is a staggering $9000. Doing a simple math, when the most expensive Fusion is used, the time to recoup the cost difference is a mere 4.5 years. However, if the cheapest model is used the time increases to 16 years. Come on Cars.com, you can come up with a better insight into things like this. Crunch the numbers yourselves and see if the article you cited is giving you a fair and unbiased opinion. If it is then do your writeup, otherwise please do not post it here.

Tony

Guys,
The calc is simple.
Take 150K miles
Take a car, which makes 30MPG, like Corolla.
Take Prius.
Calc that if gas was $3 per gallon, it will cost $15,000 for Corolla and it will be $10,000 for Prius. So you can imagine that with gas going up, the Prius will be even better. But even then, the initial cost of the Corolla is $8-10G less.
Of course, we also need to look into reality. With hybrids all around, soon the government will add pay per mile tax. And in case, if the gas tax will be removed, the non-hybrid will gain on the cost of gas.

And then, there are people who scream about emissions. Let me tell you. While making a hybrid manufacturers pollute much more then on regular car. Also, they use a lot of rare earths and in the end, the total pollution from the hybrid is not much less then from regular car. Remember that new cars don't pollute. They produce CO2, but no emissions.

According to real world sales data, real world fuel economy, real world amenities, etc., according to Consumer Reports and many others, the San Francisco Chronicle has no idea what it's writing about.

So, are the reporters at the Chronicle simply incompetent, or does the Chronicle simply have some axe to grind?

I'm not sure, but with such shoddy reporting I'm not surprised that circulation at such newspapers continues to wither away.

Bruce from DC

Unlike the rest of the hybrids, the Prius and the Insight do not exist in non-hybrid version. So a direct comparison to a non-hybrid car is not possible. The article acknowledges the limitation. However, it doesn't count the opportunity cost of the additional money required to buy the hybrid, over the comparable conventional car. An easy way to do this would be to imagine that the buyer is financing that additional cost at prevailing new car loan rates. Calculate the additional interest paid, and that's the opportunity cost. However, a better way to think of the economics of buying hybrid vs. non-hybrid is to consider a hybrid as a hedge against future gas price increases. If fuel prices go up during the life of the car, the hybrid becomes increasingly valuable.

Belly

I would think the opportunity cost would also include the money that could have been from investing the difference in cost. So it would be (interest from the loan) + (investment made on the difference in cost) = opportunity cost.

Tony, where you get the idea that an economic analysis like is so simple is beyond me and a lot of others here. And new cars don't pollute? Eh? CO2 is actually a pollutant for legal purposes - the EPA has said so.

This is not a simple calculation. Otherwise there would not be article upon article written about it.

Belly

That said, I don't think the article is really a scam or anything. The factors for opportunity costs would be equivalent for each vehicle.

DodgeFan

The good news is that people keep cars along time so 5.6 is now nothing in life of a car.

Dan

Kyle-
My rebuttal to your idiotic statement is my first post. If you were literate, you'd see that it already explains why you are exactly wrong.

AlEx

@JTH

Unfortunately, the majority of people don't think the way you do. The majority of the public needs to see competitive options at the time of purchase and not on the return on investment which might take years. If you can get the hybrid cars to cost the same as the gas ones, you wouldn't be able to keep up with demand.

2012 model of fusion is made in mexico and has a 3 liter DOHC engine

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