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PHOTO CAPTION: Camry Hybrid costs $889 more than non-hybrid model.

How Long Before Your Hybrid Pays Off?

Michael Sanibel from Investopedia provides analysis based on Toyota Camry showing 1.7 year pay back.

Published: 21-Feb-2011

There are many things to consider when buying a hybrid car. One is the payback period, or how long it will take to recoup the higher purchase price by saving on fuel. There are other more intangible considerations,such as how hybrids help the environment and the benefits you may receive for driving a hybrid. For example, in California you can use the carpool lane even if you are driving alone. In congested areas, this provides significant savings since a hybrid burns no energy when "idling." Other benefits may include special parking spaces at work and some cities are beginning to offer preferred parking for hybrids. (Find out whether you should buy new, buy used or just make your machine a bit more green. See Reduce Your Carbon Tire Print.)

Since the intangible benefits of buying a hybrid are difficult to quantify, calculating the payback usually focuses on the specific hybrid you buy, sales price differential to a standard car, projected gas costs, maintenance costs and tax rebates. Because these data vary depending on where you live and when the analysis is done, there is no single answer for how long it will take for your hybrid to pay off. Since conventional hybrids are not plugged in to recharge the batteries, the most important assumptions are gas mileage and the cost of gasoline, which has been subject to wide fluctuations over the past several years.

Toyota Camry
Edmunds.com performed an analysis for USA Today that evaluated the payback for the Camry. It was based on a price differential of $889 between the gasoline version and the hybrid version. For combined city/highway driving, government statistics rate the gasoline Camry at 25 MPG and the hybrid Camry at 34 MPG.

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