People are very sensitive to paying at the pump, or in any individual transaction. They are less sensitive to financing a large expenditure over many years, which is a serious problem. This is a great discussion, because it shows the irrational decisions we can make if we do not use a budget to our advantage. In the context of buying a new car, a mild hybrid could be an excellent choice.
 
Ditching a reliable used car for a hybrid? That's an emotional decision that may cost a lot more, in the end. No different than the guy who bought the Pontiac Firebird to be seen with on Friday nights at the burger joint . Just a different circle to impress and share values with.

It is important to also consider the rapidly increasing gas price levels, which could accelerate the payback period. Definitely an interesting topic!

I had thought that gas prices would have tilted things more in favor of the hybrids. But it shows that gas savings are a smaller factor than initial purchase price.
 
Jederino: Good point about the need for a budget. Most people just don't do the math. If that did, the decisions would be easier.

3.9 years of break-even period between a Prius and a Camry is far shorter than expected! Assuming the hybrid can last 10 years (should last longer) and the owner changes cars every 10 years (which I would guess is typical for all but upper middle-class and up), it represents good savings.
 
For people who have recently bought (non-hybrid) cars, or for those who like to change cars every few years, it doesn't make sense to replace the car with a hybrid. But it may make sense for most people.
 
If I were interested in a hybrid, I'd wait for another one to 3 years. The Volt, and even the next-gen Prius, promise far better fuel-economy than the current Prius. For those who don't like Prius styling (myself included), it appears GM will soon have many mid-sized hybrids onthe market.
 
But like one guy and I said on the Volvo-Tahoe Hybrid blog entry, hybrids might make the most sense for commercial vehicles that operate in stop-go city traffic.

"Even driving 15,000 miles, and paying $3.61 a gallon for gas, a typical car will consume about $2,000 of gas a year. Over the same distance a typical hybrid will consume $1,500 of gas for a $500 savings. "
 
If I did my math right, that equals 27 mpg. Not a 'typical car' in my book! Of course the payout is long with this kind of comparison.

With gas prices now though, the break even point is moving into a 3 year period. I say anytime its with 5 years, it starts making sense, if you hold on to cars for a while.
 
I think my car ownership limit is being reached at 8 years. maybe 9.
 
I just wish the altima was offered in my area.

Unless you're trading in a pretty new car, some of the money that goes into buying a new hybrid should be thought of simply as money that went towards getting a new car... people buy new cars all the time, so it's not quite fair that only hybrids are thought of as "not worth it".

It would be interesting to include the total cost of ownership of the vehicle rather than just fuel economy. I was reading a recent long term report on the Lexus hybrid in a publication and the maintenance costs alone on it were in the neighborhood of $3000 in less than 35000 miles. 3k still buys alot of gas if the difference in mileage for a similar car is only a few mpg...I was also under the impression that some of the hybrids take special low rolling resistance tires which are more expensive. With the cost of gasoline, it would be great to have a car like this, but all of the expenses involved would be nice to know. Also, after the life of the battery are these cars going to be throw away? What are the repair expenses after warranty?...and the insurance?

In January, I bought a 2008 Prius for $22,171 (Before taxes - See my post on this at http://priuschat.com/forums/dealers-pricing/41575-brand-new-2008-base-prius-package-2-fe-cf-hg-hz-silver-22-171-t-l-doc-fee-toyota-lake-city-wa.html")
  
So I may be biased, but when I read "When the Prius was compared to a similarly equipped Camry it cost $3,489 more." I went "Really?" and just had to check to be sure...
  
Just a simple check at the Toyota website (www.toyota.com) shows "Camry starting at $18,720" and "Prius starting at $21,100" so I thought "Hm... There may be something to this."
  
So I clicked on the Camry to "build my own." Well, I never learned to drive manual so first thing I did was select "5-speed automatic." This required me to select the Camry LE option and immediately, the cost jumps up to $21,885. This is for basic options. Feel free to verify yourself.
  
At this point, I remembered why I thought the Prius was cheaper than the Camry when I was car shopping earlier this year.
  
Addressing "total cost of ownership" question:
  
1. Special low resistance tires. Huh? I can't speak for other Hybrids, but it seems to me that most Prius owners in the Priuschat.com forums buys regular tires (or sports tires if they feel it improves performance).
  
2. Insurance. I ended up paying about $100 more per year with my Prius than with my old 1992 Ford T aurus. The increase in premium is mainly because it's a brand new car. If it matters, I always insure only one car, and my insurance carrier was Liberty Mutual. Seriously, though, if you have concerns about this, you can always call your own insurance carrier and ask them to give you an estimate.
  
3. Maintenance, Battery, and Warranty. it's often quoted that a lot of shops are surprised at how *VERY* low maintenance the Prius is. Some thinks this may be due to less internal moving parts. Of course quotes and opinions don't do justice when compared to real hard facts and figures, so feel free to browse through actual data collected by a Canadian cab company on their 2001 and 2004 Prius - see http://www.hybridexperience.ca/Toyota_Prius.htm#hybridtaxi
  
Oh, and about the Lexus hybrid and how "the maintenance costs alone on it were in the neighborhood of $3000 in less than 35,000 miles" - Well, it's a LEXUS - what do you expect? I used to own a Lexus ES250 and if my maintenance costs were $3,000 for 35,000 miles, I'd be jumping for joy.

Good article. I think that the TCO calculations are a bit more complex than this, though.
 
Hybrids like the Prius tend to be very reliable and, in fact, Consumer Reports named the Prius the most reliable car on the road last year. That saves money in repair costs.
 
Also, the Prius has historically had a very high resale value, so you end up not losing as much to depreciation. That's also a money saver in the long run.
 
That said, an ROI on hybrid technology after 3.5-4 years on gas alone is nothing to shake a stick at (I never ran the numbers, but I assumed it would take longer)! With rising gas prices, I'm sure that timeframe will only shrink further.
 
I have no regrets about purchasing a Prius last year, though. I think it's the best-engineered car on the road in ways that go far beyond just the hybrid technology.

I didn't mean to put hybrid owners on the defensive with my comments, but I would just be interested in an independent and unbiased long-term report on the total costs involved with hybrids. I have just seen too many examples from people that I know-including close relatives- who try to justify purchases of certain cars when they fill out the consumer reports questionaire by minimizing the problems they have had with the vehicles. One of the aforementioned vehicles was a complete lemon and it was made out as the most reliable car this person--my former sister-in-law--ever owned. As far as "less moving parts" on a hybrid? How can that be since they have a conventional drive system AND the electric? No offense to anyone, just independent verification of total costs.

Good comments I think all important points are made. I think in the next couple of years fuel prices are going to continue to go up, and hybrids and diesels are going to continue to continue to increase gas milage to the 60 to 70 mpg range with performance to boot. With that happening I think the all gas engine is on its way out

To sdnative -
  
I apologize if I sound like I'm being defensive. I really didn't mean to ^^;
  
If you check out the link(s) I mentioned (In particular see http://www.hybridexperience.ca/Toyota_Prius.htm#hybridtaxi), you'd see the "independent and unbiased long-term report on the total costs involved with" the Prius that you're asking for (note: not all Hybrids are created equal).
  
The "less moving parts" question - I'm not a car mechanic so my information is "second hand" so if I'm mistaken, I apologize beforehand. However, from my understanding, the Prius is "drive-by-wire" - that is, for example, "the steering column, intermediate shafts, pumps, ... are eliminated from the vehicle" (Wikipedia, 2008 - See http://en.wikipedia.org/wiki/Drive_by_wire).
  
Granted, some of my auto enthusiast friends are squeaked by the idea there isn't a physical connection between the steering wheel and the actual wheels, so this is a negative for some people.
  
Oh, and for the record, I am not at all affiliated with Toyota. In fact, the Prius is the first Toyota vehicle I've ever owned (unless if you count the Lexus). My previous cars were Ford Taurus, Lexus ES 250, and Mazda MPV (all second hand and problematic so I know firsthand the costs of maintenance for those).

hanselong & sdnative,
 
The Prius is not completely "drive-by-wire". It has a hydraulic brake system and a rack-and-pinion steering system.
 
It is, however, "accelerate-by-wire". The throttle is controlled entirely by the Electronic Control Unit (ECU), and the accellerator pedal provides information to the ECU as to what the driver wants.
 
The power steering in the Prius is electric assist instead of the typical hyrdaulic assist in many other vehicles.
 
The hydraulic brake system is electrically held disconnected from the brake pedal with solenoid valves during typical operation. However, in case of failure, the solenoids open and direct hydraulic control of the brake pads from the brake pedal is possible.
 
As for the "less moving parts", I'm not sure if that is true or not. Keep in mind that while the electric drive system adds an electric motor and generator. . . .
 
There is no alternator. The A/C is electric which reduces it's moving parts. The automatic transmission is a single planetary gear set with no clutches (like a differential). The power steering is electric instead of hydraulic, and the hydraulic brake pump is electric. Therefore the only device connected to the gasoline engine by a belt is the water pump. The generator is also the starter motor, which is powerful enough to get the gasoline engine up to idle speeds before adding fuel and spark. This eliminates the stresses of starting the engine.
 
In addition, the moving parts that exist are used less frequently than in other vehicles. When the car is stopped as well as when coasting or under light loads at slow speeds, the gasoline engine is frequently not running. Most braking is done by the generator, so the brake pads and hydraulic brake system are typically only used at speeds below 8 mph.

^ I would say that the prius probably, in its current form has as man moving parts as a regular car, any savings are canceled out by the hybrid system.
 
I hypothesis that since the prius is still a halo car, its a bit better put togther, even for a yota.

I am not a tree huger I got my Prius because of my Dad. I got all the bells on it and took delivery in Jan1 2006 and paid $30,500. It replaced my SS impala after I moved to Houston and was filling up the SS twice a week 2 x 17 gal and at less than $2 a gal I needed to make a change. The SS was also over 30k and I was not asked when it would pay me back the diff of a base impala. After the first week I knew I had made the right move. Lets look at my numbers. 75,000 miles yes I am over that now but lets work from a sold number.
 
Impala 75000/22mpg=3409gal/2yr=1704.5gal per yr
Prius 75000/45mpg=1667gal/2yr=833.5 gal per yr (My av mpg is 49.3) so I am giving a little.
 
                     2006 2007
Impala 1704.5 x $2.50 = $4261.25 1704.5 x $3.50 = $5965.75
Prius 833.5 x $2.50 = $2083.75 833.5 x $3.50 = $2917.25
                                         --------------- ---------------
Savings in gas = $2177.50 Savings in gas= $3048.50
Tax credit 06 = $3150.00
Tax deductable milage= $3910.00 Tax deductable= $4290.00
                                            -------------- -------------
Savings total 06 = $9237.50 Savings total 07=$7338.50
 
Total of $16,576.00 I gess it take more than 2 yrs to get your money back. Thats a crock in 2 yrs I have recovered half of what I paid. Last week drove from Allen Tx back toHouston at 65 with one stop and got 55.8mpg if i would have driven 70 would have been in the 48-49.3 mpg. I only used 4.55gals of gas to go 254miles. I filled up for a cost of $32.22 (9galx$3.58). For all you out there keep on telling the sheep that the pay back time is to great that your better off buying a normal car. I am here to yell up yours my Dad was right.

Breaking down the calculation of $1,500 for the "average hybrid," means 36.1 MPG. Average hybrid mileage maybe, but doubtfully Prius mileage unless there is something seriously wrong with the car or the driver.
  
Using the figure cited for Prius MPG - 46, gives 15,000 / 46 = 326.08 gallons of gas. Times $3.61~= $1,177 - better than the calculation indicates.
  
The point is, TCO depends on the hybrid.
  
BTW - My worst gas mileage in my 2006 Prius is better than 36.1 MPG. It was 37 MPG when running the heater in the winter. In the summer, though, I get in the mid to high 50's. My average gas mileage is likely close to that 46 figure meaning I would be saving more than the calculations indicate for the hypothetical case.
 
Also, in almost 21,000 miles so far, I have had no serious mechanical problems that were a result of manufacturing defects. The car is, IMHO, a superb car that is extremely quiet (meaning less stress while driving) and travels extremely well and, the electric motor's torque gives more than adequate acceleration when needed.
  
Personally, I find it unfortunate that the view presented seems rather narrow. Now you might say that the difference between $1,500 and $1,177 is small, look at it another way: at $3.61 / gal for gas the savings is enough to buy another 89 gallons of gas and, again using the figure cited for Prius mileage, that much gas is enough to go approximately 4,100 miles further in the Prius.
  
As to the steering and the lack of mechanical linkage, I find it comparable to the 94 Acura Integra I had before I got the Prius. I find that the Prius handles quite well if I keep both hands on the wheel. However, most of the conditions under which I drive do not require such attention to the wheel.
  
As I see it, the days of gas guzzling muscle cars that have far more available horsepower than anyone would ever need in the course of normal driving are coming to an end. Even the skeptics will become believers. ;)

It’s a good article. There are so many things that I have learned in hybrid world.

From my reading, it seems that the Prius and other hybrids are in their real element in urban driving when the "electrics" are mainly used. The savings is less on highway because the gas engine is primary power. For me, I would love a car like this as an "in-town" car, but on the highway, I need something bigger as I travel for my work and our family needs a larger vehicle when we travel. Since we, like most familys, are multi-car, having one of each might make sense. As far as an end to muscle cars, I think there will always be that performance demand, but as primary transportation, that is likely correct. It is interesting to note that some of the big horsepower engines are getting pretty decent fuel mileage-especially on the highway. I will probably always want a "toy" like that, but at $3.50 to $4.00 per gallon of fuel, a hybrid, diesel, or ultra-stingy gasser will likely find a place in my garage.