Penske Automotive Group has several ‘green’ vehicle options on our lots throughout the country. It has been a trend that hasn’t and we don’t predict will go out of fashion. Our sales teams have seen hybrid and electric cars sales jumped nearly 40 percent in the first quarter of the year. This can be contributed to soaring gas prices throughout the U.S. Our customer surveys have indicated that about one-third of buyers take fuel economy into account when analyzing a future car purchase. Pump prices have a lot to do with making green cars a good value. In 2009 when gas prices were hovering close to $2 a gallon, hybrids and diesels sales were in decline. But with gas prices now closer to $4, going green is looking like a better option.
Setting aside their environmental cred, are hybrids, diesels and electric vehicles actually wallet-friendly? Consumers looking at green vehicles will find that on average hybrids run about $3,300 higher on average than stickers on their gas-engine competitors. The diesel difference is about $2,800 more. The Chevrolet Volt and Nissan Leaf (new EVs to the market) are each more than $18,000 pricier than their closest gas-engine match. But consumers need to view buying green products as an investment. In the long-term ownership costs are the real measure of whether buying green is worth it.
We did the math and buyers will save green by buying green. We reviewed a 2011 hybrid versus diesel versus, electric vehicle and gas counter parts over a five year period. We assumed that average driver would drive 15,000 miles a year and that gasoline would cost remain around 2011 summer average of $3.84 a gallon, with a 3.5 percent annual increase for each fuel. Depreciation, maintenance and repairs were also taken into account. We also factored finance costs for a five-year loan after a 15 percent down payment because that seems to be a common theme among our buyers. Next we factored in insurance and taxes (products like the Volt and Leaf are both eligible for the $7,500 tax credit for electric vehicles.)
Perhaps the biggest surprise in this exercise is that although the Volt and Leaf have sticker prices that nearly double those of the gas-engine competitors, in the five year comparison they have the lowest ownership fees.
Diesels are likely to recoup their extra cost and save owners money over the long haul. Of the 12 diesel models available this year, nine have long-term costs below those of their gas-engine competitors. But note that these models tend to be the pricier luxury vehicles.
Hybrids are hard to assess, with some models producing big savings and others so highly priced that they don’t make sense. The Mercedes S400 hybrid saves you $7,000 over five years, while its sibling ML450H saves you $2,900. Other models out there like the Lincoln MKZ hybrid will save you $4,600 over five years while the Honda Insight will be $3,000 and the Lexus CT 200h will be $5,500.
Which green cars don’t come out ahead? It is hard to assess but clearly green vehicles will be in driveways, roads and towns throughout the country for years to come.