How Much Would You Pay For Better Fuel Efficiency?
A new survey shows $1,000 is the magic number for some drivers -- far less than the price differential for most hybrids.
By Claire_Martin Sep 14, 2012 3:12PM
Drivers are so motivated to save money on fuel these days they're using gas-saving tactics like driving slower, drafting behind larger vehicles and coasting to stops. But according to a new survey commissioned by Ford, there's a limit to how much they'd spend on a car that gets better fuel efficiency.While nearly all of those surveyed acknowledged the importance of fuel-efficient autos and 23 percent said they had already purchased cars with improved fuel economy, $1,000 was the price limit for the 25 percent who said they would pay extra for a hybrid vehicle.
The fact that most hybrids cost $2,000 to $5,000 more than their gas-guzzling counterparts doesn't bode well for the auto industry's alternative-energy sector. Hybrid car sales have spiked this year as fuel prices soared, but if and when they decrease, buyers might be even less motivated to open their wallets up front for fuel savings down the line. As we wrote about last week, drivers are more concerned with their initial financial outlay than future savings when making a car purchase.
And what about the new 2025 fuel-efficiency standards the Obama administration announced in late August? Vehicles will need to be twice as efficient as they currently are -- the required adjustments for which will add an extra $3,000 to a vehicle's price tag. Fuel savings, Obama officials reportedly claim, will come in at $8,000 over the lifespan of the 2025-era cars.
The new vehicles could be a tough sell, especially considering some will be similar to current models, but with smaller engines and lighter bodies -- rather than brimming with sophisticated new technology under the hood. But the United Auto Workers, for one, believe increased fuel efficiency will produce savings in the long run. "These new standards will help propel the auto industry forward by giving American families long-term relief from volatile fuel prices," UAW president Bob King told The Detroit News. "Lowering the total cost of driving will make automobiles more affordable and expand the market for new vehicles."
16Comments
Sep 16, 2012 3:18PM
"You plug the Volt in each night and drive to and from work without using gas."
This depends greatly on where you live and if you have a long commute. I'm still not on board with electric since a lot of power plants are still fueled by coal. So how is that really saving you money or the environment in the long run?
Sep 15, 2012 7:51AM
It does not make sense to trade or sell your current vehicle, if it's still in good condition, and then pay much more for a vehicle that gets better MPG. The payback takes way too long. However, if you are already in the market for a new vehicle, so are planning to spend anyway, it makes all of the sense in the world to purchase a higher MPG vehicle.
You can't simply look at the extra cost of the Hybrid vs. the high MPG non Hybrid. You also have to take into account the cost of ownership for each of them. Is it going to hold it's value much better if you get the Hybrid? What is the cost for insurance for each? How are they rated for reliability?
If you can find a Hybrid that makes up that initial cost difference at purchase through the above, then it's worth it. You cannot simply say that buying a Focus, for example, is a better deal for you than a Prius because it costs less, you actually have to do some homework or you may save up front but lose big on the tail end.
A recent article here proved that for instance, buying an Explorer because it cost less than a 4Runner was not actually saving you money because the 4Runner had a much lower cost of ownership.
You can't simply look at the extra cost of the Hybrid vs. the high MPG non Hybrid. You also have to take into account the cost of ownership for each of them. Is it going to hold it's value much better if you get the Hybrid? What is the cost for insurance for each? How are they rated for reliability?
If you can find a Hybrid that makes up that initial cost difference at purchase through the above, then it's worth it. You cannot simply say that buying a Focus, for example, is a better deal for you than a Prius because it costs less, you actually have to do some homework or you may save up front but lose big on the tail end.
A recent article here proved that for instance, buying an Explorer because it cost less than a 4Runner was not actually saving you money because the 4Runner had a much lower cost of ownership.
Sep 16, 2012 6:42PM
Sep 16, 2012 4:23AM
Wow 2 thumbs down comments using math to show how dumb people are and that when considering the price of a car you should add all expenses up to find out which is a better value and the cost of the Volt is actually the same in the end as a Civic or Corolla but gets better gas mileage if you need to use the gas engine, looks way better, and is a lot more high tech with features you wont get on the Corolla or Civic.
Sep 17, 2012 4:15AM
"I would much rather spend $550 to $600 a month that costs $45,000 than spend $550 a month for a Civic or Corolla that has a max retail price of $26,000 wouldnt you?"
Forget it. I would never drive a gasoline electric anything; if it is not clean diesel, I do not want it. Besides, the Volt (actually it is the Opel Ampera) is an automatic-only vehicle. I would rather walk or bike than drive an automatic ever again. Finally, the Volt is a sedan instead of a station wagon: impractical. Ditch.
Forget it. I would never drive a gasoline electric anything; if it is not clean diesel, I do not want it. Besides, the Volt (actually it is the Opel Ampera) is an automatic-only vehicle. I would rather walk or bike than drive an automatic ever again. Finally, the Volt is a sedan instead of a station wagon: impractical. Ditch.
Sep 15, 2012 2:43PM
Take a fully loaded Honda Civic or Toyota Corolla and then add your interest rate. Then add the gas you spend each month in one and you will find its about the same cost as a Volt. Only with the Volt you dont have to waste time at the gas station or watching the prices go up and down. You plug the Volt in each night and drive to and from work without using gas. Not bad. I would much rather spend $550 to $600 a month that costs $45,000 than spend $550 a month for a Civic or Corolla that has a max retail price of $26,000 wouldnt you?
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