Do Hybrid Vehicles Really Cost Less in the Long Run?

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Many people like hybrid vehicles, because they are more environmentally friendly. However, others are attracted to the potential savings at the pump. Because hybrid cars cost more to purchase and may cost more to maintain, it can be difficult to determine whether they provide an overall cost savings.

Costs to own a car

There are several different costs that must be considered when determining overall spending on a car. The major ones are:

  • Purchase price
  • Maintenance costs
  • Fuel costs
  • Tax costs/incentives
  • Insurance costs

Hybrids are more expensive to purchase than comparable conventional vehicles in almost all cases. Depending on the vehicle, its maintenance, taxes and insurance costs may or may not be higher with a hybrid than a conventional car. Fuel costs and tax rebates are where hybrids really clean up.

Toyota Prius c One versus Toyota Yaris

The Prius is a well-known hybrid and can now be purchased in several different models. The smaller Prius c One trim is comparable to the non-hybrid Yaris in many ways. A simple comparison done by the Department of Energy’s Savings Tool shows that based only on the differences in MSRPs and gas mileage, it would take the owner of a Prius 4.3 years to recover the additional cost. Since most people drive their vehicles for more than 4.3 years, this could be a good deal.

Information that was assumed by the calculator when the comparison was made includes:

  1. Prius MSRP of $19,745
  2. Yaris MSRP of $17,224
  3. Prius combined gas mileage of 49.5 mpg
  4. Yaris combined gas mileage of 31.9
  5. 15,000 annual miles driven
  6. 55 percent city, 45 percent highway miles
  7. Regular fuel price of $3.30 per gallon

Changing any of this information will also change the final outcome. For example, when a single change is made such as increasing the price of regular fuel to $4.50 per gallon, the value of the Prius goes up. In this case, it makes up the cost difference in only 3.4 years.

The more miles per year a person drives, the faster the Prius fuel savings make up for the increased initial cost. A person driving 20,000 miles per year recoups the additional cost of the Prius in 3.2 years, whereas a person driving 10,000 miles per year would have to wait 6.5 years to reach that point. Similarly, an increase in time to recoup the higher initial cost of the Prius is seen when more highway miles are driven. When the percentage of city miles in a total of 15,000 driven is lowered to 25 percent, it takes 5.5 years for the Prius to pay for itself.

Other vehicles

Using the DoE’s tool, many different pairs of hybrids and non-hybrid vehicles can be compared. Only the MSRP and gas mileage of the various cars change; all of the other default conditions remain the same as for the Prius. Most of the hybrid vehicles take 4 to 6 years to recoup the cost difference in fuel costs versus MSRP. There are some outliers, however, such as more expensive vehicles where the difference in price tends not to be as pronounced, and a few vehicles where the hybrid sells for the same price as the non-hybrid option.

Complicating factors

Adding in additional factors complicates the situation somewhat. Buyers who take out a car loan will incur more interest when they borrow larger sums of money. Adding in additional interest at a standard rate of 4.24 percent increases the total time that the Prius takes to pay for itself to 4.8 years.

Other complicating factors include insurance and maintenance costs. “Edmund’s True Cost to Own” calculator includes MSRP and fuel costs but also adds in maintenance costs, vehicle depreciation and more. Using this calculator, the five-year cost to own of a 2012 Prius c One is $36,267. The five-year cost to own of a 2012 Yaris is $32,915.

Besides the higher purchase price of the Prius, some additional differences between it and the Yaris include:

  • Higher average maintenance costs

  • Higher cost of insurance

  • Higher taxes and licensing fees

    Insurance costs make up the bulk of the approximately $3,500 difference in 5-year ownership cost. Using the same average driver, the calculator came up with an increase of nearly $4,000 in insurance costs over the given time period. The lower average fuel costs of the Prius partially offset the higher insurance rate, as well as the additional maintenance, taxes and licensing fees.


    Hybrid vehicles may be an economical choice for people who plan to drive them for a long period of time. A simple calculation using only fuel costs and purchase price gives an unrealistic estimate of how long it typically takes for the fuel cost savings of a hybrid vehicle to equal its greater purchase price, however. Individual driver characteristics such as miles driven per year, percentage of freeways miles and the local price of gasoline can also have an impact on the value of choosing a hybrid for that person.

    Marc Grant is Social Media Coordinator with, a website that enables people to sell new or used oil rig and water well equipment, as well as a number of oilfield fishing tools.

  • Michael Bowen


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