Hybrid Car Calculator

# Hybrid Car Calculator

Last updated 29th Nov 2022
Disclosure

This calculator allows you to compare the cost of buying a hybrid vehicle to that of a car with a standard combustion engine. The calculation considers the initial purchase price of each car, government incentives, financing terms, the miles per gallon (MPG) for each vehicle, the number of miles driven each year, as well as the cost of gasoline. Using this information, along with the anticipated depreciated value of each vehicle, the calculator computes the differential cost of buying a hybrid.

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### Result

Excess Cost of Hybrid Vehicle \$3,710 \$2,798 \$2,384 \$414 \$1,473 \$1,954 \$481 \$4,811 \$5,900 \$4,703 \$1,197 -\$1,883 \$2.43

## Calculator Definitions

The variables used in our online calculator are defined in detail below, including how to interpret the results.

### Cost of Hybrid Engine Car (\$)

This value is the purchase price of the hybrid car you're thinking about buying. This figure should not include any government rebates or incentives offered.

### Cost of Standard Engine Car (\$)

This is the purchase price of a car with a standard gasoline engine. To make a more accurate comparison, this should be the same make and model as the hybrid you're thinking about buying.

### Government Incentives (\$)

The U.S. government offers incentives to owners of hybrid vehicles to help offset the higher purchase price of these automobiles. These incentives, or rebates, are phased-out over a 15-month period after 60,000 vehicles are sold.

### Down Payment (\$)

If you are going to finance the vehicle, and are going to lower the amount borrowed by providing a cash down payment, enter that amount here.

### Annual Interest Rate (%)

This is the annual interest rate as stated on the car loan. This is not the APR, which takes into account other costs associated with the loan.

### Loan Term (Months)

The term of the loan is the number of months over which the loan will be repaid. The most common car loan terms are 36, 48, and 60 months. If you are not going to finance the car, enter zero in this cell.

### Planned Ownership (Years)

This is the total number of years that you intend to own the hybrid vehicle. (Later on, we'll describe how to use this input to determine an ownership breakeven point.)

### EPA Mileage, Hybrid Engine (MPG)

In this section of the calculator, you want to enter the EPA's published value for the expected miles per gallon (MPG) for the hybrid vehicle you're considering buying.

### EPA Mileage, Standard Engine (MPG)

This is the EPA value for the expected miles per gallon (MPG) for the same vehicle powered by a standard gasoline engine.

### Miles Driven Per Year (Miles)

This number is the total annual miles you intend to drive each year.

### Price of Fuel (\$ / Gallon)

This is the current or anticipated future price of fuel stated in dollars per gallon.

### Excess Cost of Hybrid Vehicle (\$)

The excess cost of a hybrid vehicle is the difference between the purchase prices of each type of car. This calculator was originally populated with the MSRP for a 2012 Ford Escape Limited with a 3.0L engine and a 2012 Ford Escape hybrid of the same trim line.

### Finance Charges Hybrid and Standard Engine (\$)

If the car is being financed, the difference in finance charges is calculated by subtracting the financing costs for the hybrid and standard engine vehicles. These are the interest charges over the life of the loan.

### Fuel Cost Hybrid and Standard Engine (\$ / Year)

This value is found by taking the miles driven each year and dividing that number by the MPG for each engine type to determine the gallons of fuel consumed each year. This value is then multiplied by the price of fuel to figure out the cost of fuel per year.

### Annual Fuel Savings (\$ / Year)

The annual fuel savings is the amount of money saved each year when using a car with a hybrid engine. The value is found by taking the difference in fuel costs found in the previous step.

### Fuel Cost Saved with Hybrid (\$)

The total fuel costs saved by buying a hybrid car is found by taking the annual fuel savings value and multiplying it by the number of years the car is owned.

### Final Car Value - Hybrid and Standard Engines (\$)

This calculator takes into consideration the fact a car purchased for more money may be worth more when sold. For illustrative purposes, we used the MSRP for a Ford Escape (not the purchase price) and used an average depreciation schedule for that vehicle. What this calculation demonstrates is that a hybrid vehicle may be worth more than a standard engine vehicle when it's sold.

### Difference in Car Value (\$)

This is the potential difference in selling price, which is calculated by comparing the two final car values just discussed.

### Differential Cost of Hybrid Engine (\$)

This is the difference in cost between owning a hybrid car and a car with a standard combustion engine. Unlike other calculators, which only account for the difference in MPG achieved by each vehicle, this tool also accounts for the selling price of each car. While the exact depreciation schedule may vary from the information calculated by this tool, there is no doubt that if given a choice between two virtually identical vehicles, the one that costs less to operate will sell for more money. A negative value indicates that a hybrid vehicle is less expensive to own, while a positive value in this cell indicates the premium paid to own a hybrid car. Changing the Planned Ownership value allows you to figure out how long you need to keep the hybrid to reach the breakeven point. For example, if you find the Differential Cost of Hybrid Engine value is positive (more expensive to own), you can increase the Planned Ownership value until this cost differential is less than zero (negative).

### Breakeven Price of Fuel (\$ / Gallon)

This calculator also provides the breakeven point for the price of fuel. That is to say, if the price of fuel goes below this value, then it is less expensive to own a standard engine vehicle. If the price of fuel is above this value, then it is less expensive to own a hybrid vehicle.

Disclaimer: These online calculators are made available and meant to be used as a screening tool for the investor. The accuracy of these calculations is not guaranteed nor is its applicability to your individual circumstances. You should always obtain personal advice from qualified professionals.