Why I Might Not Buy a Hybrid Car
Posted in Environment, Money by George
I might not buy a hybrid car. I am going to begin searching for a new car in the next year or two, and I’ve definitely been fascinated by hybrids. However, is a hybrid really the best choice for our environment? Taking this idea a step further, are hybrid tax breaks really going to the right places?
I just finished listening to an interview with Jamie Lincoln Kitman, who recently wrote an op-ed piece in the New York Times, entitled “Life in the Green Lane.” In this interview, Kitman discusses the hype that hybrids are receiving purely for the sake of their status as a gasoline-electric car, rather than the amount of gasoline they might save. Kitman points out (and callers to the show reinforce) that many people see the word hybrid and assume the car is efficient. This is not always the case.
Kitman’s main point in his article and interview is this: just because it’s a hybrid doesn’t mean it is environmentally friendly. Following from this: just because it’s a hybrid doesn’t mean it should get tax incentives.
His article makes perfect sense. Someone buying a gigantic SUV that also happens to be a hybrid is still not going to get much more than 20 miles per gallon. Thus, why should someone who buys a gigantic hybrid SUV get a tax break over someone who makes the sacrifice to buy a smaller, less luxurious car that gets twice the fuel economy that isn’t necessarily a hybrid?
I will take his argument a step further and say that tax breaks should be based on a car’s miles per gallon. If your car has an estimated miles per gallon over a certain number, then you receive tax benefits based on how many MPG it is over that threshold [yes, there is a major flaw in the way that MPG is calculated by the EPA, however, all cars are tested the same way, so this point is not void].
Another interesting point in Kitman’s article is the problem with hybrid battery packs. These battery packs are both too expensive and dangerous to the environment if disposed of improperly. Many hybrids come with warranties on the batteries so they can be replaced for free for a certain length of time. However, if this warranty is expired and the battery pack runs out, someone could end up paying up to $6,000 for a new one. Furthermore, these battery packs are gigantic and heavy (100+ lbs.) and if owners do not dispose of them properly, they can cause some serious environmental damage.
Clearly, this information is not something that hybrid automakers are willing to put in the limelight. Although a Prius gets supurb gas mileage, and still might save you money in the long run, if by chance you need to replace that battery without warranty, you are pretty much screwed. Furthermore, you are not going to come out ahead buying any hybrid SUV currently on the market no matter what.
Thus, tax incentives should be for those who drive cars that do not use a lot of gasoline. They should not be for cars that are labeled as “hybrid” simply for that sake, because then we allow people to make off with the same almost-as-gas-guzzling SUVs as before at low prices!
Car Comparisons (Auto Transmissions, Basic Models, Base Prices)
Using kbb.comToyota Prius
$22,305
City: 60
Highway: 51Honda Civic Hybrid
$22,700
City: 49
Highway: 51Versus:
Toyota Corolla
$16,530
City: 30
Highway: 38Honda Civic
$16,110
City: 30
Highway: 40And just for fun:
Chevrolet Silverado Hybrid
$32,700
City: 15
Highway: 19
To me it doesn’t look like it’s worth it yet. Maybe once mileage increases get a little higher… but right now, I think I’m just going to buy a Civic, or a Corolla.
Note: Thanks a lot to Lance for sending me a link with access to the audio interview. The Audio interview was from Moneytalk with Bob Brinker.
May 11th, 2006 at 9:31 pm
hey… I am in the market for a car…
Moving up to Boston, want something with 4wd/awd, needs to be as cheap as possible, can’t be looking at anything that much about 20k…don’t want to break the bank.
Possibilities:
bottom level subaru: do they make these? Forrester, impreza can be expensive depending on the model
Toyota: Matrix, Rav4, but matrix is a much nicer price
Honda: CRV, but expensive
Saturn: VUE, cheaper than toyota/ford
Ford: Escape, know somebody with an employee discount
I am definitely not thinking hybrid b/c an escape is 26k or something. Its just out of the initial price range… corolla would be my kind of car, but it is not 4wd/awd
2nd point…Bob Brinker is pretty cool. One of the local radio groups has his show on sundays…
May 12th, 2006 at 12:18 am
- Definitely don’t get a Saturn VUE. Very sketchy safety record with the back tires… I don’t have a link, does anyone else?
If I had to pick one of those I would say get a Matrix. Why?
a) Made by Toyota, so most likely pretty darned reliable.
b) Best gas mileage out of those choices.
c) Some people say it looks dumb… I think it looks pretty sweet. Especially in black.
May 12th, 2006 at 5:08 am
Your plan is certainly laudable but ultimately misguided. People buy SUVs because they feel they need one (whether they do or not is besides the point). If they can guy one with better gas mileage because its a hybrid (even if only marginally) then good on them.
Other cars that are non-hybrids don’t really need the tax breaks for several reasons. 1) they are already priced at the market level whereas hyrbrids are more expensive than the market price. 2) Considering the Civic has consistently been one of the top selling cars it doesn’t really need any more incentives.
The end result of your plan would be people purchasing SUVs rather than hybrid SUVs.
I also find it amusing that on another article jon and I pointed out some of the cost issues you bring up here but you argued with us about them.
One more thing to consider when buying your car is where you are going to work/live. If you work in DC then owning a hybrid is great because of it allowing HOV. Don’t underestimate the value of that.
If you commute to DC from NOVA then you pay roughly $2.5 roundtrip on the toll road. Say you do this for 40 of your working weeks (fairly arbitrary number), thats 500$ a year.
Even if it doesn’t force you onto the toll road, HOV is faster and saves in headache. My commute is 20min faster when my dad and I HOV vs. non HOV.
My Uncle has a suburu outback and lives in NYC and loves it. He uses it because he needs something he can fit his hang-glider in. Works well in bad weather too.
May 12th, 2006 at 9:33 am
Save a few miles per gallon for a $3000-$6000 premium? I don’t think it’s really worth it.
The tax breaks should not be there for the heck of it. Tax breaks should be for cars that save gasoline. The tas breaks are given because if you buy a car that doesn’t use much gas, you are helping out everyone else in the country by reducing your personal demand, and thus Uncle Sam is patting you on the shoulder. There should definitely be tax breaks for hybrids that are getting solid gas mileage, but a hybrid that gets under 30 mpg doesn’t really seem to cut it. The same should go for the HOV lane. Why should someone getting 20mpg that drives a hybrid be able to drive in the HOV if someone getting 40mpg in a Civic has to drive with everyone else?
May 12th, 2006 at 11:25 am
I don’t know what your first comment is referring to. Perhaps its referring my HOV lane comment. I am not arguing with you on that I was just trying to be helpfull. Cost effectiveness of Hybrids is an issue that does not get enough attention.
The question of tax cuts for fuel efficiency is an interesting from a public econ perspective. If the goal of government policy is to reduce gasoline consumption would it be an effective policy. I think giving tax breaks to hybrids is probably more effective for reasons outlined above. People buy SUVs because they feel that they need the space.
Placing a tax cut on Honda civics is not likely to change that considering those cars are already cheaper. Cars like the Civic already provide a cost basis for consumers to purchase them.
May 12th, 2006 at 11:38 am
But like you said above, People buy SUVs because they feel they need one (whether they do or not is besides the point).
Perhaps if the gap between a fuel-efficient small car (which might be a little more inconvenient than an SUV) versus a large car were bigger, more people would purchase smaller vehicles. Thus, gasoline consumption would drop and that would be a good thing.
Just making hybrids or SUVs cost effective because people want them to be doesn’t help our nation reach any sort of goal except perhaps subsidizing American auto manufacturers.
Although there are a lot of honda civics on the road right now, there are still plenty of big cars being driven by people cause they got them cheap at GM’s unloading of inventory sale last summer. The more smaller cars on the road, the better for our economy.
May 12th, 2006 at 11:52 am
The idea of subsidizing American automanufactures is laughable. Because only GM and Ford make SUVs? Come on.
You seem to think I support the idea of people driving SUVs. I do not.
That said I don’t think making civics cheaper (based on tax incentives) will help eliminate SUVs. It just doesn’t make logical sense. If the two cars were priced the same then it would but they are not. SUVs are already more expensive.
So rather than imposing a policy that actually encourages more SUV purchases (because there is no tax break for hybrid SUVs), I would suggest continuing to give a tax break so that we can at least replace SUVs with hybrid SUVs.
May 12th, 2006 at 12:13 pm
They make the majority of SUVs on the road these days, that’s why I say it’s subsidizing American auto manufacturers.
I think the more you open the gap between small cars and SUVs, the more people will buy small cars. It’s simple cost benefit analysis, and currently the benefits of an SUV over a small car outweigh the costs for some people. If we can open up the gap even more, it will not do any harm. However, if we do start subsidizing SUV hybrids that get 20 miles per gallon, we’re going to be doing more harm than good by encouraging purchases of cars that get 20 miles per gallon.
And yes, I’m pretty sure there is a tax break for hybrid SUVs (that’s what the article and interview I responded to were about).
I think what we disagree on is whether or not people will substitute away from SUV purchases due to changes in prices. I think what you’re saying is that a ton of people people will never substitute away from SUVs because they feel they need it, where I believe that there are a sizeable portion of people who drive SUVs and don’t really need to, and would substitute away with a larger price differential.
May 12th, 2006 at 12:44 pm
The purpose of the tax incentive on hybrid SUVs is to have people drive more hybrid SUVs and less regular SUVs. Non-American owned SUVs are everywhere and their sales are increasing every year.
I know there is a tax break for SUVs, what I said was:
“So rather than imposing a policy that actually encourages more SUV purchases (because there is no tax break for hybrid SUVs), I would suggest continuing to give a tax break so that we can at least replace SUVs with hybrid SUVs.”
Initially I am referring to yoru plan of eliminating the tax incentive. Then I state how we shold continue it as is the current system.
You are right in that we disagree on the substitution issue. I would point to several things. I think the price of gas is already an added cost to SUVs that most people realize and take into account when buying. This means that the real cost of SUVs is arleady higher than the nominal, so to speak.
Likewise if people were basing it solely on rational cost based analysis then they would buy vans. Vans are cheaper and offer the same room. However they don’t. So if they won’t buy a van which offers the space and size they like for less, why would they buy a smaller car just because it is also cheaper.
I just don’t feel distorting the market is necessary. Governmetn intervention cannot solve everyting.
May 12th, 2006 at 1:19 pm
I suppose I disagree slightly here too. I feel that the government shelling out thousands of dollars per SUV for a few miles per gallon increase isn’t worth it in the short or long run.
But it all boils down to the fact that we both disagree that people will substitute away from SUV purchases. I think that if the cost differential is great enough (and I guess we’ll see whether this is true to some extent over this summer when peak driving season hits), people will substitute away from SUVs in relatively large numbers.
I say let’s agree to disagree, and see what happens this summer. If you’re right, I’ll buy you a coke.
May 12th, 2006 at 2:02 pm
Agree to Disagree. Just a few clarification points.
I agree that people will move away from SUVs as the cost grows. I am not suggesting otherwise.
However, I don’t think they move to driving small efficient cars from huge SUVs because of a 1000$ tax break which is what you proposed. Sure they will move away from SUV to something else but to the cars you are suggesting, I don’t think so.
Also judging by the success of the prius and those like it. I am not sure the market needs anymore intereference. Since those cars already have wait lists.
My point is that if people are going to buy SUVs , lets have them buy Hybrids rather than regular. The tax break merely brings the hybrid to the cost of the regular.
May 12th, 2006 at 7:01 pm
Don’t listen to my brother, George when he spouts off of Toyota matrix being awesome. If you’re going to get a small sport utility crossover, I would get the Pontiac Vibe. It is identical to the Toyota Matrix as both were part of a joint project between GM and Toyota. It has a higher MSRP but a slightly used one depreciates faster therefore it costs less. It is also available in AWD.
For the sake of SUV’s, you want to get one more or less from a domestic producer as they have had a better history with them. Personally, I would recommend the Chevy Equinox or the Pontiac torrent both available with AWD. They get 18/23 with V6 AWD which would be the smart engine choice when you are dealing with AWD and a sub-midsize SUV.
You must also factor in the massive incentives that the domesic American producers are giving on their SUV’s. These typically put up to $12,000 off on a vehicle depending on the model and price.
Also, foreign autos are often at near full price with features “bundled” on models on the lot making the price much higher than if they were selected individually. Ex-you request the power driver seat…but it is bundled with the upgraded radio, DVD based navigation, and leather package. It ends up costing you around $4500 as compared to the little $200 upgrade for the power seat itself.
In addition, the engines that are in foreign cars, especially Hondas and Nissans, are much more electronic and more costly to repair than those in a GM, Ford, or Daimler-Chrysler vehicle. Many of these cars produced by domestics can be serviced or replacement parts purchased near anywhere due to the length of their existence in America not requiring you to go to the dealer who used has a 4 to 7 times of the services or products cost than if you could buy it at an independent chain or producer.
Anyways, happy car buying!
Have some addresses:
http://www.pontiac.com/vibe/index.jsp
http://www.chevrolet.com/equinox/
http://www.pontiac.com/torrent/index.jsp
Don’t listen to George when he said that the Saturn VUE’s wheel broke off in testing during the 2002 model year! It did, but this new Hybrid version which is fully redesigned mechanically and structurally and is farrrrrrr less complicated than its foreign rivals costs under 23K with 27/32 mpg. And it is going into production, not just a concept. Your wheel won’t break off.
http://www.saturn.com/saturn/vehicles/futurevehicl...
May 13th, 2006 at 5:03 am
I remeber reading somewhere(last week) that a certain Japanese Car Company (I don’t remember which) builds the car in America and uses more American parts than GM (or Ford, one of the two).
Justs goes to show how silly the domestic vs. import debate is becoming in this globalized world.
May 13th, 2006 at 9:15 am
Exactly! I don’t understand why people think you’re helping America by buying a GM car. The only thing you’re doing is helping out a company owned by an American guy.
May 14th, 2006 at 12:03 am
Actually, the “America” you’re helping is overseas on a little island called Japan. The profits go to them, not to American business. Sure, business is not based on sympathy, it is based on competition. But, if American car companies who created this car culture and obsession with it, not only would the largest auto company in the world be gone (GM) but hundreds of thousands of more jobs will be lost. Despite financial gains as well as popularity, Toyota in particular cannot hold as many jobs nearly of what all of the domestic producers sustain and hold currently.
Also, GM uses only American parts for their cars (with the exception of the Chevy Aveo which is produced along with Daewoo in Korea). The sole parts producer is the Delphi brand created in 1999 by GM for all American parts. Delphi makes essentially everything for GM and does give Toyota some minor interior parts.
But now because of fierce competition, Delphi has or will close 21 out of its 29 plants in the US soon. 50,000 Delphi employees are in the US who produce GM parts.
It’s ironic how GM does incresingly poorly in the US while it does superbly in China gaining #1 status as the top producer there, wheras Toyota does poorly in its homeland of Japan and they do very well in the US.
However, when you look at a car you have to look at much more than reliability and genaralized quality. You yourself have to get in the car aro truck or whatever and see how you “connect” with it. By connecting I mean that you should feel comfortable in driving this everywhere you go for the next 5-6 or however many years of ownership, how you like its performance, does it handle well, are all the functions clean and easy to do, and most importantly, do you feel like a million bucks in it, not taking it just as a status symbol but also as a statement about yourself and who you are. ALWAYS LOOK AT THE SAFETY FEATURES AND RATINGS AS WELL. I went a little over the top there, but you get the picture.
Don’t make the assumption that just because it has a GM, Ford, or Chrysler marque on it that it is a bad car.
And also, don’t take my brothers advice about technical data of a brand or car. He doesnt know much in terms of that in cars but he does know TONS about the net gain and other economic details about them.
May 14th, 2006 at 2:50 pm
thanks ben, the stuff about depreciation with the US cars was eye opening.
I’ll have to do a fair amount of test driving now…
My main focus is buying a new car under 20k, or a used one with 25k or less miles under 17.5k. I’ll have to figure out the rebates and those possibilities.
As for the net gain, most likely I will not be getting another car for the next 10 years, so as long as it lasts that long without major issues and can drive in snow I’ll be happy.
May 14th, 2006 at 3:25 pm
Benny, you are absolutely wrong.
International trade is such an important part of our economy. Furthermore, most of the jobs are held in America so a lot of the stuff doesn’t even involve trade, the profits just go to a company that originated in Japan. So what? Furthermore, the “profits” go to not only some Japanese guy who owns Toyota or Honda, but all of the workers who work for these companies. MANY of them are American.
I agree. That’s why I’m not going to buy an American car until I see a reliable, efficient one on the road. So far “Reliable Efficient American Car” is an oxymoron.
GM as of two or three years ago was pretty much the most bloated, inefficient company on the books. Why? Excessive numbers of workers, outdated business plan, and an inferior product. They’re desperately trying to correct this, and they’ve done so to some extent by getting rid of excess workers and cutting pension plans and selling off assets.
The best we can hope for is strong companies to take General Motors’ place so workers won’t have to worry about their corporation go out of business. Regardless of whether Asian automakers take over the market within the next few years, there will be fewer people working in the auto sector, because American automakers have some serious cuts to make.
I don’t understand why people think that just because a corporation was made by an American means that buying from it is “good for America.” That’s false. If the product is made in America, workers work in America, it contributes to US GDP, and it’s a superior product, then there is no reason why nationalist concerns should keep you from buying it.
May 15th, 2006 at 7:39 am
What the neighbors are buying.
http://www.msnbc.msn.com/id/12777854/site/newsweek...
May 22, 2006 issue - With all the histrionics about rising gas prices coming out of Washington these days, SUVs must be an endangered species in our nation’s capital, right? Well, not exactly. At Capitol Cadillac, just inside the Beltway, SUVs are flying off the lot. Last week, former White House chief of staff Andy Card dropped by to pick up a new SRX, Caddy’s midsize SUV, says dealer Daniel Jobe. But Jobe’s hottest seller, by far, is the newly redesigned chrome-encrusted Cadillac Escalade, an incredible hulk that gets 13mpg in the city. “My biggest problem is not gas prices,” says Jobe, “it’s getting enough of these trucks.”
May 16th, 2006 at 11:02 pm
Money Talk, the show Bob Brinker puts on, is best when Bob interviews people. And he gets top top people in the investment world to come on his show.
I cannot stand the show when some old lady calls in and says she has $500,000 from an inheritance and she doesn’t know what to do with it. He always has a lot of patience and gives the caller some advice and the caller then caller sounds like she is listening then says something near the end of the call that makes it clear that the caller did not listen or didn’t understand a word he said.
Anyhow, Bob knows a lot about a lot of things and I learn a lot from listening to his show. However, Jon has to be the first person I have ever call him cool.
From this interview, I had to agree with a lot of what Jamie Lincoln Kitman said.
This week Brinker interviewed Daniel Pink, author of “A Whole New Mind.” Mr. Pink discusses the different skills employees need to learn in order to be successful for the future. He stresses that employees need to be more creative and not rely on more mechanical right brain structured type of things because China and computers will be able to do those quicker and cheaper than Americans.
If anyone wants to hear the interview or his show without commericals on demand, let me know and I’ll give you instructions.
May 16th, 2006 at 11:35 pm
I’m definitely a big fan of Moneytalk from what Lance has sent me. I definitely recommend checking it out.
March 5th, 2008 at 1:39 pm
I really think getting the corrola or civic is a good idea. First off, i dont know where people get “60 mpg city” for the pruis, i used to work at a gas station over the summer and I asked nearly everyone who pulled up with a pruis “what kind of gas mileage does this get” and I got a consistant responce of 40 mpg. Yeah, thats still great, but a far cry from the proclaimed 60 mpg. Maybe the hybrid gets 60 if you go to work down hill and manage to get back home without hardly using the gas engine. But honestly, how many people have that kind of commute? And if so, i doubt you would use your car ONLY for work so therefor the mpg would drop to the 40 you see in real life. As for the corrola i drive now, it gets at the lowest 25 and the best 28, but i constant have my foot down on it and dont exactly drive with fuel efficency in mind. Also we live in an area where there are many hills…theres also a problem with the o2 sensor since theres an exhuast leak before that sensor making the engine run a little rich. So id say 28 mpg is very decent considering the conditions…if i drove like a grandma and got that problem fixed im sure i could get 32-34 city easy. I also payed only 200 for the car, and i isnt to pretty, but with only 139,000 on it i can get way more then my moneys worth out of it. Its obvious that a traditional gasoline car gets the claimed mpg more acurately then a hybrid.