Green Car Advisor

By John O'Dell, Senior Editor

The idea of spending less on gas seems to be driving far more people into the green car ranks than the idea that you are doing something good for the planet and those who occupy it.

We can see this pretty clearly in the astonishing growth of small car sales in the U.S. – hardly anyone was buying them a few years ago and last month they accounted for a record 22.6 percent of the new car market, according to Edmunds.com's market analysts.

Meantime, large trucks' market share plunged to just 11 percent, down from a high three years ago of 19 percent.

Small used to mean cheap. Now it means fuel efficient (although not all small cars are particularly miserly with gas). And as compacts and subcompacts continue to capture market share, look for automakers to start piling high-margin luxury goodies into their small cars as they seek ways to replace the profits they used to book from truck sales.

Hybrids Rising Too

We can also see concern about fuel prices in the steady rise of hybrid sales – they accounted for a record 3.2 percent of the market in April, with Toyota's Prius the month's 10th best-selling model of any type.

That hybrids are increasing their market penetration even though they cost more than comparably equipped conventional versions of the same models (except the Toyota Prius, which has no conventional counterpart) is testimony to people's desire to pare their fuel bills.

Just a year or so ago, the Prius was the only hybrid with a reasonable chance of providing sufficient fuel savings to pay back the so-called hybrid premium – the price a hybrid purchaser pays to get a car or SUV with two powertrains and enough complex electronics to make a NASA engineer jealous.

But rising gas prices and some economies of scale as hybrid volume grows is leveling the field.

Payback Period Shrinks

A new study by Edmunds.com shows that there are several hybrids in the market now that can pay back the premium in the 3-5 years that most people hang onto a car.

"Environmentally conscious consumers have been drawn to hybrid vehicles since day one, and were willing to pay a premium for them," said Jesse Toprak, Edmunds.com's top industry analyst.

"But now, as a result of lower price premiums, higher gas prices and, in some cases, tax credits, it's won't take long for consumers to offset the price premium and actually save money by buying a hybrid – depending on which one they choose."

Edmunds' analysis, which takes into account major ownership costs and benefits including purchase prices, tax credits and fuel costs, looked at 13 hybrid models on sale and found that, using a national average gas cost of $3.61 per gallon and figuring 15,000 miles a year of travel, two models would payback the premium in under three years and two more would hit pay-back during the fourth year of ownership.

All of the cars are 2008 models with four-cylinder engines and automatic transmissions, unless otherwise noted.

The Good

The leader of the payback pack is the Toyota Camry Hybrid, which costs $889 more than the comparably equipped Camry XLE four-door and averages 34 mpg versus the gas model's 25 miles per gallon, would pay back that premium in 1.6 years.

Chevrolet's Malibu Hybrid, which averages only 2 miles per gallon better fuel economy than the Malibu LT (27 versus 25) but has a premium of only $438, would take 2.7 years to achieve payback.

Nissan's 34 mph Altima Hybrid costs $1,561 more than the comparable Altima 2.5 S. which averages 26 mpg, and hits payback in 3.2 years.
In fourth place is the 46 mpg Prius, when compared to the 25 mpg Camry LE. It has a hefty $3,489 premium, but pays it back in 3.5 years of operation.

The Bad

At the far end of the chart is a hybrid that will almost assuredly never pay back its owner(s) the actual cash difference, although we presume the psychic payback is something else – the Lexus LS 600h.

Thanks to loads of extra features, this V8-powered, uber-luxurious hybrid costs $18,630 more than the closest conventional competitor in the Lexus lineup, the  LS460L.

The 600h's combined city-highway fuel economy rating of  21 mpg is just a tad better than the 460L's 19 mpg, and our number crunchers figure it would take about one million miles of driving, or 68.6 years, for the hybrid to earn its keep.

Others in the "don't hold your breath" category are the Saturn Aura Greenline hybrid – 16.2 years to pay back the $2,602 premium over the Aura XA --- and Toyota's V-6 Highlander Hybrid SUV – 12 years to repay the $7,495 premium over the V-6 equipped Highlander Ltd. Model.

The Rest

In the middle of the pack:

    
• Honda Civic Hybrid, 4.8 years, $2,803 premium over Civic LX;

    
• Mercury Mariner Hybrid, 6.4 years, $4,904 premium over standard Mariner;

    
• Lexus' V-6 powered RX 400h hybrid SUV, 6.4 years, $4,407 premium over conventional V-6 powered RX350;

    
• Saturn Vue Greenline, 7.1 years, $4,770 over Vue XE;

    
• Ford Escape Hybrid, 7.3 years, $4,161 over Escape XLT;

    
• V-6 Lexus GS450h, 7.7 years, $2,722 over V-8 powered GS460.

Hybrids, it's easy to see, aren't the cheapest way to cut fuel costs and while most have pretty clean emissions, they aren't a lot cleaner – except in reduced CO₂ output – than their non-hybrid counterparts.

But many buyers justify the purchase as a socially responsible move – using less gas, even if it costs more to do so, helps reduce the nation's dependence on imported oil, much of it coming from countries that don't particularly care for the U.S.

And that's not a bad reason to consider fuel economy the next time you go car shopping.

To help do the math if you are shopping– which vehicles cost the least to own and operate – check out Edmunds.com's True Cost to Own calculator. And use Edmunds' True Market Value feature to see what others in your area are paying for the same types of vehicles.