As gas prices rise higher and higher, car dealers are anxiously awaiting: Will hybrid car sales also increase? While everyone applauds the Arab awakening, ongoing unrest in the vast oil-producing region has sent gasoline prices soaring. In the US, most consumers now pay more than $3 per gallon, while Californians, with their high standards of fuel efficiency, pay more than $4 per gallon.
At the moment, buyers are flocking to small, fuel-efficient vehicles, including hybrid cars. Will the trend last? If consumers are simply reacting to the headlines of the moment, then maybe not. However, most consumers look at a complex web of factors when buying a car or truck. In addition to the short-term outlook for oil production and therefore gas prices, consumers are also quite aware of the long-term outlook. Peak oil is most likely upon us. Car buyers factor that into their calculations, and often end up with hybrid cars and hybrid trucks for that very reason.
Another major issue for car buyers is cost. Today’s cars are extremely expensive with the lowest cost vehicles going for around $13,000. The average cost of the car is somewhat higher. In fact, according to the National Automobile Dealers Association, the average new car sold in the US costs $28,400. Median income is $46,326, so buying a new car is obviously an extremely important financial decision, second only to buying a home.
As a result, because buyers certainly expect their vehicles to not only last an average of 10 years, but also to be as fuel efficient as possible. The SUV craze of a few years ago has definitely cooled, at least in part, due to average gas mileage: 17.4 miles per gallon. a typical car averages 24.8 miles per gallon. Older SUV owners have long calculated that they could keep the cars until they wear out because $28,400 will buy a lot of gas.
Even regular gas car owners are feeling the pain these days, as the typical car averages 24.8 miles per gallon. So for those contemplating a new car purchase, the pendulum clearly swings toward smaller, more fuel-efficient models, and especially hybrid cars and hybrid trucks.
In addition to saving money on fuel and, by the way, also saving the environment, the cost of hybrid cars has fallen in recent years as the technology matures. Today, the average hybrid car costs between $19,000 and $25,000, about the same as gas-powered cars, and can be expected to save money in the long run.
Many hybrid vehicles now cost the same or slightly more than their gas-only counterparts. The Toyota Camry hybrid, for example, costs just $500 more than the gas-powered Camry. With the hybrid’s 33 mpg, payback should happen in about a year. For the pricier Prius, of course, which gets 51 mpg city and 48 mpg highway, the Camry’s gas payback is over 2 years. Of course, car owners these days keep their cars longer, so most new hybrid car owners will still have the car and their gas savings long after the payback period is over.
Most Americans are excited about events in the Middle East despite the consequent rise in gasoline prices. We can just be thankful that we have comparable priced hybrid cars and hybrid trucks to buy. It looks like consumers will buy those hybrid vehicles.
