Most Hybrid Owners Don't Buy Another Hybrid, Polk Study Says
By Jesse Snyder, Automotive News
Almost two-thirds of U.S. hybrid buyers returning to the market in 2011 chose something besides another hybrid.
Excluding owners of the best-selling Toyota Prius, the repurchase rate among other hybrid buyers dropped to 22 percent, according to a Polk study released today.
According to the study, the loyalty rate for hybrids since the beginning of 2008 has ranged between 26.4 percent in the second quarter of 2010 and 41.8 percent in the second quarter of 2009. The rate for the fourth quarter of 2011 was 40.1 percent while the total for 2011 was 35.0 percent
But there is some good news for manufacturers who have invested heavily into developing hybrid technology, said Brad Smith, director of Polk's loyalty management practice.
Conquest tool
Hybrids seem to attract new buyers to brands, and they may also help brands retain customers, he said.
"It's a great conquesting tool for brands," Smith said in a phone interview, calling hybrid technology "a competitive edge when it comes to attracting new customers."
That is especially true for Toyota, a hybrid pioneer that has expanded its Prius hybrid line to three body styles and just added a plug-in version.
Polk said in 2011, 60 percent of Prius owners back in the market bought a Toyota brand vehicle. The study also found that 41 percent of the Prius owners back in the market either bought another Prius or a hybrid from another automaker.
For Honda hybrid owners, 52 percent stayed with the Honda brand, but less than one in five bought another hybrid from any brand.
Competition with conventionals
Smith said the biggest challenge for hybrid makers is that less expensive conventional fuel-efficiency technologies are also advancing rapidly, reducing the fuel-efficiency advantage of more expensive hybrids.
That may be why hybrids accounted for just 2.4 percent of total U.S. auto sales last year, down from 2.9 percent in a peak of 2.9 percent in 2008.
"The premium price points for hybrids are just too high when so many conventional small and mid-size cars have improved fuel economy," Smith said.
This was the first time Polk has conducted a study of hybrid buyers returning to the market.
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The other mistake you made is that the gas version has an EPA combined rating of 28 MPG, not 25.
Using your current fuel costs, here is what the numbers work out to be:
15000 miles per year at 28 mpg (combined gasoline) at $4.30/gal = $2,300 annually
15000 miles per year at 34 mpg (combined diesel) at $4.40/gal = $1,940 annually
Annual fuel savings with diesel: $360
Additional upfront cost of the diesel is $6,130. It depreciates faster than the gas model adding another $1,761 to the cost of ownership over 6 years, bringing the total additional cost to $7,891. Divide that by the $360 fuel savings a year and it will take 22+ years and/or 330,000+ miles just to breakeven using your fuel cost numbers with only a 10 cent per gallon delta between a gallon of gas and diesel. And that assumes the depreciation of the diesel will level out and decline at the same pace as the gas version after 6 years. If it continues to depreciate more in terms of real dollars as shown in the first 6 years, then the breakeven point moves even further out in time/mileage.
@VerumEternus et al:
The data you listed has proven my point. They show that the diesel has cost the purchaser:
$6000 (new) - $4369 (used) = $1631 diesel depreciation.
Then using current Jetta EPA estimates and fuel prices in my area:
90000 miles at 34 mpg (combined diesel) at $4.40/gal = $11647
90000 miles at 25 mpg (combined gasoline) at $4.30/gal = $15480
Equals $3833 savings in fuel minus $1631 in depreciation= $2202 savings or 14.2%
The diesel actually pays for itself in less than 40,000 miles!
You guys keep driving your gas powered cars. I'll stick with diesel.
First of all, read my name again. 2 Gs, 1 O. Goggle, not Google
Sorry about spelling your name wrong. I'm not sure why you are taking it so personal, but it wasn't meant to be.
Okay, now prove it with numbers
I already did. Feel free to check my history. I'm not going to repeat the numbers for a small group of people who have already made their decisions based off biased opinions. It's a waste of time. I'm not making an attempt to sway anyone one way or the other. I'm just correcting misinformation (and unfortunately I've had to do it several times).
However, I warn you that when I provided the numbers earlier, the cost of diesel was a lot more expensive then it is now. If we used today's numbers (zero price difference between gasoline and diesel) my argument is only stronger.
I'll also point out that I am the only person using real life numbers as several other commenter's such as Beltway have admitted that they have NOT driven the vehicles we are discussing. I am fortunate enough to have driven thousands of miles on both variants and personally recorded the real world mileage. I suggest you try it.
You can adjust the numbers to fit your opinions all you want, but it doesn't change what happens in real life.
I'm not sure why you pu****o hard. I have never tried to convince you to buy diesel. If you want to pay more to drive a gasoline powered car, buy all means do it. Just don't distort the facts to make yourself feel better. Do you feel ashamed? You shouldn't. I don't care if you pay more. Why are you worried about what I think?
The only goal I have is to help inform people who have little to zero knowledge about diesels or automobiles in general (see TheNonGoogleGuy below).There are a lot of misconceptions about diesels out there and I am just trying to help those people out.
By the way, with today's diesel prices, the payoff period is actually under 100k miles. Nice.
IRN:
First of all, read my name again. 2 Gs, 1 O. Goggle, not Google. Can anyone even read anymore or do they need an "App" to read for them?
I'm not sure where you get your information from, or where you learned math, but please, by all means, give us a real-life example of how diesels save money before the car or truck itself starts falling apart and costing more money than it's worth to maintain. You seem to be the only one arguing for diesels here. All you keep saying is "diesels make their money back before the 100K-mile mark." Okay, now prove it with numbers. Go ahead. Show us. Because every time I do the math, I get different numbers than you; and I'm pretty sure my calculator is working right.
And apparently, I have little-to-no knowledge about cars... laughable. I bet you've never even changed your headlight fluid yourself...
Have any of you taken the time to price used diesel powered vehicles? Trust me, they will ALWAYS be worth MORE than their gas powered brothers. In fact I believe that they actually depreciate at a lower rate so you would probably make money on them.
Unfortunately Had it in CA, the Kelley Blue Book numbers don't support your argument. I priced out a 2006 Jetta with 90,000 miles (6 years@15K per year) and the used price for the gasoline version is $9,809 and the diesel version is worth $14,178. That would imply the the diesel actually lost some of its original $6,000 additional value that you'd pay for when new. It actually depreciated $2,000 faster. Just sayin'.Why is it that EVERYONE seems to believe that the price premium one has to pay for a diesel powered vehicle over its gas powered brother is immediately lost the moment you drive the car off the lot?
Here's something for you to ponder. Diesels are worth more used because they cost more new. Not only are diesels more expensive at the new car MSRP-level, that gap widens when you compare actual purchase prices. Why? Because dealers will discount the plentiful gas models far more than the rare diesel models they have in stock, if they're willing to discount them at all.The Jetta example below? The actual purchase price premium for the diesel version is over $8,000, not the $6,000 MSRP difference. Factor that in and the payback gets drawn out even further. That only exacerbates the payback problem for diesels. I didn't see anywhere in the discussion below anyone implying that price premium disappeared upon driving the car off the lot or equalized the retained value of each of them. It doesn't change the payback time anyway. Diesel, like hybrids, are financial losers today. Maybe that will change, maybe it won't.
Personally, I have no preference one way or the other when it comes to gas versus diesel. My only goal is to point out the significant financial drawbacks to buying a diesel at today's premiums. If the prices of diesel vehicles come down, then the gap starts to close and they might make sense. Until then, the VW Jetta diesel has to be driven 525,000 miles to breakeven with its gasoline counterpart based on the 40 cent price delta of fuel that still exists here today. Plain and simple. The math doesn't lie. Do you? The facts are, that even with gas and diesel both costing the same $4/gal., it will still take over 16 years and over 240,000 miles for the Jetta diesel to breakeven with its gasoline version. Hardly an acceptable payback.
You can adjust the numbers to fit your opinions all you want, but it doesn't change what happens in real life.
I'm not sure why you pu****o hard. I have never tried to convince you to buy diesel. If you want to pay more to drive a gasoline powered car, buy all means do it. Just don't distort the facts to make yourself feel better. Do you feel ashamed? You shouldn't. I don't care if you pay more. Why are you worried about what I think?
The only goal I have is to help inform people who have little to zero knowledge about diesels or automobiles in general (see TheNonGoogleGuy below).There are a lot of misconceptions about diesels out there and I am just trying to help those people out.
By the way, with today's diesel prices, the payoff period is actually under 100k miles. Nice.
Using the VW Jetta as an example, at an average 15,000 miles a year, with a 40 cent delta between a gallon of unleaded regular and diesel, the Jetta TDI only saves you $173.00 a year in fuel over its gas counterpart. The price delta between the two models is $6,130.00. Divide $173.00 into that and the breakeven point is over 35 years out in the future, or when the odometer hits 525,000+ miles. How many people do you know that keep their cars that long? I can't think of one.
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