The Car and Truck Fleet and Leasing Management Magazine Study: Some Hybrid Vehicles Make Financial Sense

August 25, 2006

SANTA MONICA, Calif. —’s latest hybrid study shows that despite higher sales prices, purchasing some — though not all -— of today's hybrids can make good financial sense. For the latest installment of its Fuel Economy Guide, compared the sales prices and annual gas expenses of hybrid vehicles and their non-hybrid counterparts. "Our study revealed that high gas prices and generous tax credits now offset the high sales prices of some hybrids, assuming owners keep their hybrids for a few years," said Alex Rosten, manager of pricing and market analysis for's study indicates that the higher purchase price is completely recovered for the Ford Escape Hybrid and Toyota Prius within three years of ownership, while buyers of the Honda Civic Hybrid, Saturn VUE Green Line and Toyota Camry Hybrid reach break-even within six years of ownership, in each case assuming the vehicle is driven 15,000 miles per year. Full tax credits are only provided to consumers until shortly after each manufacturer has sold 60,000 hybrids. After that threshold is reached, the tax credit gets cut in half. For Toyota and Lexus buyers, that threshold has been reached -— so anyone who buys a Toyota or Lexus hybrid after September 30, 2006 will only qualify for half the tax credit. The credit for these models will drop to 25% in April 2007 and then to zero in October 2007. "If you're in the market for a hybrid, right now is the best time to buy," said Joanne Helperin, senior editor of's Fuel Economy Guide. "It will take buyers much longer to break-even if their tax credit is halved." This hybrid study assumed the vehicles were sold at the True Market Value price and achieved the Environmental Protection Agency's recorded mileage for combined city and highway driving. The 2006 federal tax credit was applied when appropriate. Figures were calculated based on the assumption that one gallon of gasoline costs $3.00 (which was the nation's average price for regular unleaded fuel on Aug. 14, 2006). For more information about this study, visit
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