January 8, 2007

THE WINDOW BREAKER REALLY DOES SAVE YOU MONEY:

Hybrid autos save money in long run, study finds (John O'Dell, January 8, 2007, LA Times)

Hybrid vehicles are proof of the old saw that you've got to spend money to save it, a new study shows.

In recent years, studies by Consumer Reports and others have shown that most hybrids won't save owners enough money on fuel alone to make up for their higher initial prices.

But a new study by Los Angeles-based Intellichoice.com, which specializes in automotive cost-of-ownership data, says that hybrid buyers are still the winners when you factor in costs of financing, fuel, insurance, state taxes and license fees, repairs, maintenance and depreciation.

"Across the board, we found that all 22 hybrid vehicles have a better total cost of ownership over five years or 70,000 miles than the vehicles they directly compete against," said James Bell, Intellichoice.com's publisher.

"Hybrids are proving themselves to be an excellent alternative for car buyers," Bell said. "Even when factoring in the additional upfront costs for their purchase, the long-term savings hybrids generate makes them a sensible and attractive purchase."


Apply those savings across the entire economy and you can see why using global warming hysteria to force a transition away from current energy sources is such good policy.

Posted by Orrin Judd at January 8, 2007 1:23 PM
Comments

Intellichoice is a publisher and the head of the company owns a hybrid. So I'm not surprised that the results don't match Consumer Reports or "any others".

Posted by: andy at January 8, 2007 2:27 PM

Buying a new car is among the worst possible things you can do with your money, regardless of whether you're buying a hybrid or not.

Posted by: b at January 8, 2007 2:34 PM

b:
No kidding! I bought a new car last year and it was easily the dumbest move I've ever made - and that's saying something. Once I get that stupid thing paid off I'm sticking with used cars for the rest of my life.

Posted by: Bryan at January 8, 2007 2:53 PM

"...when you factor in costs of financing, fuel, insurance, state taxes and license fees, repairs, maintenance and depreciation."

Let's see: higher initial cost means higher financing cost, higher taxes and license fees, and higher depreciation. I don't think these cars will be any cheaper to repair, in fact, repairs will probably be more expensive, and therefore insurance rates would also be higher. I don't understand any of the purported savings except fuel.

Posted by: jd watson at January 8, 2007 3:25 PM

Perhaps they detailed all those bits to show they are considering all factors, not that hybrids saves money on each of those factors? If so, poorly worded.

It's possible that hybrids depreciate slower (the time horizon here is only 5 years) and that with electric power the parts move less, saving on wear and therefore maintenance.

Anecdotal evidence from friends talking about people they know (in IL, WA, AZ, TX, and FL) indicates demand for hybrids is still high and spreading. The market should continue to grow, and economies of scale will make hybrids more attractive financially.

Posted by: Chris Durnell at January 8, 2007 4:21 PM
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