Just before I went away, I posted a blog entry about my latest long-term Honda Insight update, and reader Brian posted a comment about cost comparisons between the Insight and non-hybrid cars, something I wanted to talk more about. Here's what Brian said:
Since you mention about how much you saved in gas, at the end of the test what I would like to see is this: A comparison against a non-hybrid model. Harder obviously since this is a hybrid-only model. However I'm sure a comparison to a civic would be fair. Including purchase price and depreciation for a comparable-equipped model. This would be much more fair than comparing against your old accord wagon.
This piqued my interest because I actually struggled a bit with this issue when I was writing the update. I had the same thought as Brian about comparing to our Honda Accord, and I began writing a cost comparison against the Honda Fit, which is similar in size to the Insight. But then I wondered: Was that a fair comparison? As I looked at more cars and crunched more numbers, I realized that I was going to wind up with an unbearably long article, so I decided to save the cost comparison for another day... and today is as good a day as any.
As I said, I started out with the Honda Fit, which is comparable in size to the Insight, very fuel efficient, and quite a bit more inexpensive. Even with the Insight's better fuel economy, the numbers clearly came down on the side of the Fit. With gas at $3/gallon, you'd have to drive about 173,000 miles to make up the cost difference between a Fit and a base-model Insight.
<p>But then I wondered: Would anyone cross-shop the Insight and the Fit? The Fit is a great car, but I'm sure most people buy it because it's the least-expensive Honda. If you're in the market for a $16,000 car, how likely is it that you would consider a $20,000+ hybrid, especially when there is little difference in space or amenities?
So what would an Insight buyer be cross-shopping against? (Besides the obvious answer, which is a Toyota Prius.) I agree with Brian -- though it's a little bigger, the Civic is a good starting point for a comparison.
A top-of-the-line Insight like ours -- an EX with navigation -- costs $23,850. But that's not the model I'd recommend buying; I would pass on the navigation/Bluetooth bundle, which would bring the price down by $1,800.
A Honda Civic LX with an automatic transmission costs $19,155 and offers same equipment as a Honda Insight EX without nav ($22,050), although the Civic lacks electronic stability control. (Honda only offers ESC on top-of-the-line Civics. Shame on you, Honda.) So the price difference is $2,895. If we go by the EPA combined fuel economy estimates -- 29 MPG for the Civic, 41 MPG for the Insight -- and base our calculations on $3/gallon, we get a fuel cost of 10.34 cents per mile for the Civic and 7.31 cents per mile for the Insight, so the Insight is roughly 3 cents per mile cheaper. You'd have to drive 96,500 miles to save money. If you trade in every 3 years, there's no benefit, but if you keep your car for 150,000 miles -- a very reasonable proposition in a Honda -- you'd end up $1,620 ahead. With gas at $4/gallon, the break-even point drops to 72,375 miles, and the 150,000 mile savings are $3,105. So yes, the potential savings are there.
But is the Civic the best comparison? Let's not forget that the Civic is also available as a hybrid; it's more expensive than the Insight ($24,550 without navigation) but it's bigger and, according to the EPA, gets slightly better fuel economy (42 MPG). Regardless, it seems logical that Civic buyers wanting a Hybrid might well look at the Civic Hybrid.
The Insight EX is roughly equivalent in cost an equipment to a Honda Accord LX, rated at 25 MPG. Buying an Insight would save you money as soon as you drove off the lot. But how many mid-size buyers would consider a subcompact Insight? That's not a rhetorical question, by the way -- that's exactly what we did, and we rarely miss the extra space. (That's why I feel justified in comparing the cost savings to our old Accord wagon, which is comparable in fuel economy to a modern-day Accord.)
Of course, there are more costs to consider than purchase price and fuel economy. Brian mentioned depreciation, but that's a difficult figure to factor in; just because a book or a web site says your car is worth $X after three years, doesn't mean you'll actually get that amount for it. And then there are maintenance costs. An oil change for the Insight costs $20 more than an oil change for a Civic, and even with the 10,000+ mile service intervals we've experienced, that adds up to $300 over 150,000 miles. What about finance charges? A higher interest rate increases the effective price difference between the Insight and the Civic... as do your negotiating skills. And then there's the fact that we have no idea what will happen to gas prices.
The bottom line is that it's difficult to put your finger on an exact number and say "This is how much money a hybrid will save." There are just too many variables. The one clear financial advantage is that, by shifting the cost savings to fuel, a hybrid eases the sting of sudden spikes in fuel costs.
But there are other advantages to having a hybrid. Gasoline is a non-renewable resource, and I enjoy the fact that we're using less. My wife and I put a lot of miles on a lot of cars; one can argue that it's for the greater good, but the Insight helps lessen our environmental impact. By year's end, we will have driven twice as many miles as the average American, but we will have consumed less fuel. Call me a tree-hugger if you want, but that makes me feel good.
Anyway, those are my thoughts on the subject. What are yours? Click the "comments" link and chime in. -- Aaron Gold
Photo © Basem Wasef
Aaron, I agree with you that the savings calculation isn’t always about the numbers themselves. There is value in less consumption of fuel beyond the dollars and cents. There are those who are willing to pay the extra money up front for the new technology and the promise of improved technology down the road. If no one bought the uber expensive HD TVs when they first came out the market would have died and the manufacturers would have pulled the plug. But people slapped down thousands knowing full well that in a year or two the price would be significantly lower. And thus today we can get full 1080P big screen TVs today for under a grand. Those that are willing to pay extra up front to consume less over the lifetime of the car will drive the market toward cheaper hybrid tech and eventually bring about a cheaper hybrid for the bargain shoppers down the road.
The one thing I think we can agree upon with gas prices is we are extremely unlikely to see prices return anywhere near what they were 11 years ago. Gas seems to hover around 2.50 to 3 dollars a gallon these days in my area (Milwaukee). I can only assume a hybrid is going to help people save money since gas is going to invariably go up. Its not a renewable resource and we’re literally tapping into areas where oil is hard to obtain (BP). We’re bound to have a shortage since experts are predicting we have a global demand that far exceeds any supply the nations of the world can produce.
Uh, I went to the Honda dealer to by an Insight EX and drove off in a Fit Sport. It’s quite obvious that the Insight is based off the Fit and anyone familiar with the use of a pocket calculator can see that the Fit is a big winner from a money-saving perspective. As I was shopping for a new car and wanted to save gas, it was no contest. There’s nothing beyond hybrid prestige and bluetooth that the Fit lacks vs. the Insight.
Now, over the last year, my local dealer has apparently realized that many customers are coming to the same conclusion. The same EX’s that I couldn’t get into for under $23k can now be found for $19-20k depending on the sale. If they’d carried that price a year ago, I’d have been all over them. But for $23k, it just didn’t make sense. I’d rather swallow my pride and save money… Heck, 3/4 the people I meet ask me if the Fit is a hybrid, anyway!
Excellent article. I am interested though about the batteries for the hybrids or full electrics. what about disposing of them? Shouldn’t that be included in the cost? Its a footprint issue on the planet…and i am not sure where i stand yet on it- as i don’t have solid facts. That would make for an interesting article…if you ever needed a topic.
thanks- good reading. Bill
The numbers we crunched actually made the hybrid worth it. In my case, I was driving an old 98 Dodge Ram 2500 diesel 4×4 pickup for my company (unlike what some say, not all CEO’s live high on the hog). When we did the spread sheet for the company fuel costs we were getting killed. It was costing just shy of $400 a month just for fuel for my truck. Something had to give. Even though the pickup WAS a diesel and thus got better mileage versus a gas pickup, the fact was that a hard analysis showed that only 10% of the time, we were actually *using* the hauling utility of that truck for the company. Much as I loved my truck, it had to go. So, screaming, kicking and grumbling, cars were compared, numbers were crunched over and over again. When it was all said and done, assuming over that period of time gas was going to $4 a gallon, which was the thinking on projected oil prices at the time, we ended up with a Prius III. The amount of fuel savings cost added up to about $6000 over a Fit over 200,000 miles. It made it worth it for our situation and the savings over the Ram for the 90% of the daily between job-site driving is truly staggering, about $41,000 over an 200,000 miles, which would have been easy to squeeze out of that 98 diesel. In went the Prius, out went the Pickup…for more than we paid for it (gotta love diesels for that!). When the time for hauling something big for the company *actually* came up, Craigslist was scoured for nearly 2 months and Grandpa’s 1976 Ford 4×4 was obtained in truly stunning condition for a meager $1000. In our case, the hybrid really did make sense for the amount of time we plan to keep the vehicle and the mileage we drive. It won’t necessarily make sense for everybody but for a lot of companies like mine, it does.
Let’t see how the gutless Insight Hybrid compares to a comparably priced, much quicker and far more agile Golf TDI? Now that’s gonna be a REAL comparison!
As a couple in out late 60’s neither of us work we just enjoy our lives and wait for the pension and SS checks to be deposited
So iT honestly DOES NOT take a lot of brains to skip buying a Hy bird and save the money up front … or better yet buy a used car. and save even more money…
The only reason to go with a Hybird would be to save the planet ….BUT heck I’m not a tree hugger …and we both desire a car that we can actually be physically comfortable in between rest stops when we travel…
Bob G
OK, Aaron. I’ll take the bait….TREE HUGGER!
Thanks for the mention. Good analysis.
Having said that, I don’t think someone who would be interested in an Accorded would consider a fit. Unless they were looking at the wrong kind of car to begin with.
As for the warm fuzzy about saving gas… Nobody really has any numbers yet on the environmental impact of those hybrid batteries. I also have not been able to find any data on how long the batteries are lasting and how much they cost to replace.
Brian, here’s some data to chew on w.r.t. those batteries. They’re made with heavy metals. Therefore, they’ll be around forever. Some reclyling is possible…but then what?
I think I’m gonna be sick.
Do all of you tree huggers use the same tampons?
C
No, Chuck, with all the money we save on fuel, we can afford to each buy our own.
Aaron
Chuck…Having been involved with the Chernobyl Nuclear Power Plant disaster clean-up, I feel I may have earned a right to make such comments, considering I took my share of radiation at that site from another contaminating heavy metal (radioactive isotope to be exact), Cesium 137. Puerile comments like yours only exhibit the primitive thinking that have given us the Pacific Gyre, the demise of the Amazon rain forests, extinction of countless species, horrific pollution in cities like Bejing (remember the Olympics?) and countless other global disasters. I probably won’t live long enough at 57 to watch you eat your words, but I’m hoping you will.
“I took my share of radiation at that site”
Explains a lot! Radiation and kool-aid are a bad mix Don.
Dr Chuck prescribes a heavy dose of reality. jmo
C
Some people simply don’t believe in what they can’t see, Don. You’ll never convince them. But you know that.
Aaron
BTW, there seem to be two of us Brians posting on here! I made the first comment but not the original comment that spurred the blog entry. I’m also the one that commented on the Jetta, lol.
Responding to other Brian, I was also interested in the Accord though not the Civic…for some reason. However, having driven all of them now, I’d say I enjoy the Civic most (and wish I’d realized that back when I made my purchase).
As for the snide eco-comment…I’m decently green but not really. There are some of us with LONG commutes out there. Saving gas anywhere you can just makes sense.
Funny you should bring up Kool-aid, Chuck. It seems you’ve been indulging copiously in the Kool-aid prepared by the “intelligensia” at Fox. Like them you resort to jingoistic phases and dark sarcasm to support your mertiless opinions. Unfortunately, nothing you said changed the REALITY of contaminated dying children, deformed future generations and untold illness and suffering.
That my friend is reality!
Dont worry Chuck. I thought it was funny.
Why play around with batteries with unguessable futures and probable related environmental impact.
I have been getting (40 imp) 34? US mpg from my 03 4 cyl honda accord for years and now 32? (38 IMP) on my 08 lexus 280hp ES350 (during a recent 3500 mile trip).
‘Seems to me one needs to consider, first, whether one needs all those trucks and suv’s I see on the roads driven by apparent white collars. I rent a vehicle to tow my boat twice a year to lake and back..cost $200. – or I could operate an F150 year round…..no, surely. Yes I know the F150 and Silverado are great to drive!
Diesel and further incremental refinement of normal gas engines (1mpg per year) until some technology really breaks out, surely is the path for the sensible.
Dave,
Sorry buddy but that just makes way too much sense. Could never work. It’s more important to waste billions and maybe trillions of dollars on unnecessary expensive technology to counter an evil that just doesn’t exist.
If you listen to Aaron and Don, the world will turn into Mad Max land or “A Boy and His Dog” wasteland if we have to wait for cars powered by sagebrush(inexhaustible and renewable supply in Wyoming).
I have no problem with folks saving money by buying vehicles that will transport them around more effectively, but I just don’t get this feeling of euphoria(superiority?) one gets by owning an expensive car that “leaves a smaller carbon footprint” but costs thousands more than the same car without the hybrid battery?
Now, driving around in a Turbo Porsche Carrera can make me feel real good and definitely superior. And if I grow a vagina, maybe they’ll make a hybrid version?
C
I was listening to NPR the other day (here come the “tree hugger” attacks!) and they had a big discussion about hybrids and the batteries inside them. (IIRC there was someone from GM talking about the Volt and someone from Nissan talking about the Leaf.) I think that the manufacturers were claiming that the batteries would have 80% left after 5 years. If you’ve got, say, a 200-mile range at new, that means you’re down to 160 miles by the time you pay it off, which certainly won’t help the resale value! As many of us have found, real-world battery life doesn’t always work out the same as the claims – I’ve had laptop batteries become useless after only a couple years sometimes.
So, ultimately, the value question has a lot to do with how long the batteries last, how much new ones cost, and how much the labor is to install replacement batteries. The ecological has to do with the recyclability of the used batteries. If you throw plug-in electric cars into the mix, then your electric bill has to feature it, too – and unfortunately, most of that is still made with old fashioned coal.
J Kyle you make excellent points. I’m not sold at all by the hybrid crowd, regardless of reclyclability. On their own mertits I concur with you that they decline in performance with age, just like any battery. Then consider that the cost of replacement is so prohibitive that you’re correct in expecting horrific resale values. I view these hybrids are an interim “feel good” (yes, I’m agreeing with Chuck) measure until revolutionary technologies like Hydrogen come to the forefront.
A word of advice…with Chuck Manson roving thru these pages, you may not want to admit to listening to NPR. Watch out for the mud slinging!!!
As always when it comes to hybrids, if you’re buying it to save money, you better be driving an awful lot of miles.
But I don’t think that’s why the majority of people who end up purchasing a hybrid do so. I drive over 30,000 miles every year. Knowing that I’m consuming less of a finite resource to travel those miles is worth paying a premium for me.
Hello my friend, I though chevrolet better than this car but this car is too pretty but Chevrolet is the best car in the world, let’s see the price, How much does it costs.. The price for that car has saying all.
I live in Israel and if I winning the lottery game i can take car without money, it’s a gift from the company, to tell you the truth? I prefer motorcycle but motorcycle is a dangerous vehicle so I guess that car is more protecting. good luck for bying this car.
this car looks like great believe me.