Cost-conscious environmentalists might need to think twice before buying a popular hybrid Toyota Prius.
Tax credits are no longer available for the Prius and maintenance costs for the hybrid may be higher than for gasoline-powered vehicles. Beyond that, the mining and fuel required for the transportation and production of the batteries may not actually reduce your carbon footprint as much as you’d expect. Plus, you can actually get gas mileage that’s just about as high with a small gasoline-powered car.
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“Especially in today’s market, where car buyers are more price-conscious than ever, consumers are looking for the strongest values out there. Because of their price premium, [hybrids] do not offer the strongest value proposition,” says Joseph Barker, auto analyst at research firm CSM Worldwide, a market research firm for the auto industry. “There are plenty of small car alternatives that provide 20, 30 even 40 miles per gallon,” Barker notes. The fuel economy rating for the 2009 Prius is 45 to 48 miles per gallon.
No More Tax Credit
Tax credits are no longer available to Prius buyers (Stock Quote: TM), meaning you’ll end up paying thousands of dollars more today than even a year ago, making it harder to justify the price tag.
Federal tax credits for hybrid cars are phased out after 60,000 of the eligible vehicles are sold. Introduced in 2000, the Toyota Prius hit its 60,000 mark halfway through 2006, and as of the 2009 model year, tax credits are no longer available. For the 2008 model year, the federal tax credit awarded to Prius buyers was $3,150, according to the IRS.
Even the tax credit on the Honda Civic Hybrid (Stock Quote: HMC) has been phased out. The last tax credit for the Civic Hybrid CVT was available through the end of December.
In addition, since gas prices are currently at about $2.05, according to the U.S. Energy Information Administration, compared with more than $4 last summer, it takes even longer now to benefit, let alone break even.
“Without question a hybrid takes a lot longer to break even than a diesel engine or a gasoline engine,” Barker says.
