High Gasoline Price Makes Hybrids A Better Value

Buyers will need to keep the car more than three years to see payback on the higher initial purchase price.

Published: 15-Jun-2008

The Toyota Prius, the country's top-selling hybrid car, sells for an average $22,939, compared with $19,231 for its gas-powered cousin, the Camry. But the Prius also drinks less gasoline - which now tops the $4-a-gallon mark.
So, which is the better deal: The more expensive car that is cheaper to operate, or the less-expensive car that drinks more gasoline?

It's the Toyota Prius - but only if the buyer keeps the car for longer than three years, according to Edmunds.com, a Web site with resources for car buyers. In the Prius vs. Camry example, it takes three years for the hybrid's fuel savings to pay back the premium paid to buy the Prius instead of a comparable gas-powered car.

The Prius example comes from the latest study released by Edmunds that determines the length of time it takes to recoup the premium paid on costlier hybrids. The findings: The rising price of gas is making hybrids more financially attractive by reducing the amount of time required for fuel savings to pay back the so-called hybrid premium on many models.

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