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Are Hybrid Cars More Expensive to Own?

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Hybrid cars aim to provide the best of both worlds by combining one or more electric motors with gasoline engines. Hybrids are designed to be much more fuel-efficient, both to help conserve natural resources and to help car owners save on fuel costs.

While many people opt for hybrids to do their part for the planet, others are motivated primarily by the desire not to spend so much at the pump. But, if you’re hoping for a vehicle that has low operating costs, you need to look at the big picture beyond just the price of gasoline. You’ll want to consider hybrid car repair costs and other ownership expenses to see which vehicle provides the most bang for your buck.

Car ownership costs: All vehicles vs. hybrid cars

Car ownership costs go far beyond gas and also include the costs of insurance, maintenance, and repairs. Here’s how some of those costs compare on a hybrid car versus average costs for all vehicles.

All vehicles Hybrid
Insurance (per year) $1,189 $1,200
Maintenance, repairs and tires (assuming 10,000 miles driven annually) $821 $749
Fuel (assuming 10,000 miles driven annually) $1,105 $570
Source: AAA’s 2018 Your Driving Costs: How Much Are You Really Paying to Drive?

Vincentric also compared specific hybrid vehicle models with their comparable counterparts in all-gas vehicles and found that when taking into account initial price, fuel savings, and maintenance costs, the average hybrid costs around $319 more than a gas-powered vehicle over a five-year ownership period.

Insurance: Hybrid vehicles tend to cost more to insure for four primary reasons, according to Esurance. Hybrid vehicles tend to be more expensive, raising the potential costs of replacement if the car is totaled or stolen. The parts on hybrids are more costly, raising the cost of repairs.

Specialty mechanics are usually needed to work on hybrids, which also raises repair costs. And, many drivers of hybrid vehicles are attracted to the car’s fuel efficiency because they tend to spend a lot of time driving — which increases the likelihood of accidents happening.

Maintenance and repairs: Maintenance is a bright spot on the hybrid versus gas-only vehicle comparison; maintenance on most hybrids doesn’t cost any more than maintaining a gas-only car does.

And Edmunds indicates that hybrid vehicles may need to have their brake pads replaced less often than traditional gas-powered cars because hybrids have special braking systems that reduce wear-and-tear. This can provide a little bit of savings.

When it comes to repairs, hybrids do have more expensive parts that can break than gas-only cars, namely because these vehicles have batteries that may need to be replaced. Because of this, repair costs can be higher. However, many hybrid vehicles have high reliability ratings so repairs aren’t needed often — and the price of batteries has come down in recent years, helping to reduce the cost disparity between hybrid and traditional vehicles.

Fuel: Hybrids shine when it comes to fuel costs, as the major selling feature of these vehicles is that they’re designed to be more fuel-efficient.

Paying for car costs

No matter what kind of vehicle you own, it’s important you are prepared to cover costs associated with the car. This includes not just routine maintenance and gas costs, but also high repair expenditures as well.

Car owners have a number of different payment options, and this chart shows the pros and cons of some of these different methods of financing your vehicle expenses.

Payment option Pros Cons
Cash No interest charges and no qualifying requirements Saving up cash is hard and you could use funds needed for other things. Dealers may also be unwilling to accept cash for security purposes as there’s no transaction history to prove payments.
Personal loan The interest rate is usually below the standard credit card APR and you have a fixed repayment timeline so there’s a definite payoff date You have to qualify with a lender, most loans have a multi-year repayment period so you pay interest for several years, and it can take time to get your funds
0% interest credit card You won’t pay interest on the borrowed funds if you pay the balance before the 0% rate expires but you could hurt your credit score if you max out a credit card If you don’t pay off the balance before the 0% rate expires, the interest charges could be very high
Payday alternative loans You can get fast access to a loan with a short repayment timeline and capped fees You have to be a credit union member and you’re limited to borrowing a small sum of money

Cash: If you can cover the costs of your vehicle with cash, you’re in the best position. You won’t have to worry about applying for a loan, waiting for approval or holding off on repairs or maintenance until the funding comes through. You also won’t incur interest charges.

Unfortunately, many people don’t have the cash they require. In fact, AAA found around one in three U.S. drivers cannot afford to cover unexpected car repairs. To ensure you have cash when and if you need it to cover maintenance or repairs, it is a good idea to budget some money each month for car costs. Transfer this money into a special savings account you don’t touch until you incur an expense with your vehicle.

Personal loan: You can get a personal loan from a credit union, bank or online lender. Personal loans could be fixed or variable rate loans, but they all have a set repayment schedule so there’s a definite date you’ll become debt-free. The interest rate is usually below the standard APR on most credit cards, which can make this method of borrowing more affordable. But, you will need to have good enough credit to qualify to obtain a loan, and may have to wait a week or more before you receive the loan funds from the time you apply.

0% interest credit card: Many credit cards offer 0% interest promotions where you’re charged no interest for a period of time after opening the account. If you can apply, and get approved for, a 0% interest card, this could be a good way to cover car costs because interest charges won’t raise the price you pay for your vehicle expenses.

Unfortunately, it can take time to apply for and receive a 0% interest card, and not everyone will be approved for one. And, if you don’t repay the full borrowed amount before the promotional rate ends, you will likely have to pay very high interest costs on the remaining balance.

Since credit cards require only minimum monthly payments, it’s important you figure out how much must be paid each month to pay the loan off before the promotional rate ends. Make sure this is affordable and that you’re responsible enough to make these big payments each month.

Payday alternative loans: Credit unions offer payday alternative loans to help people who need quick access to cash but who don’t want to go to a high-interest payday lender.

If you’ve been a credit union member for at least a month, you may be able to borrow between $200 and $1,000 for between one and six months. Fees are capped at $20 and you’re limited in how many of these loans you can take out.

Payday alternative loans can be a good choice if you don’t need a huge loan because you have more minor repairs, and if you want to make sure your loan is paid back quickly.

Consider your costs before deciding on a car

Hybrids can definitely be a good option for drivers looking to limit their consumption of resources and do something good for the planet. Just don’t assume that the fuels savings hybrid cars promise will mean your car ownership costs are much lower. Look at the full picture when assessing the total expenses your vehicle will force you to incur so you can make an informed choice about which automobile is right for you.


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