The price for a barrel of oil is now north of $105 a barrel, which will inevitably mean higher prices at the pump. To help alleviate the burden of $4.00 per gallon gas, automobiles with higher fuel millage are definitely more attractive. Automakers are understanding the trend, and are producing an ever-expanding array of so-called “green” cars. But to increase your gas sipping ability using the power of the electron, you’re going to have to pay more up-front…
How much more? Let’s make some simple assumptions. First, let’s assume you’ll be driving 15,000 miles a year. Next, let’s assume that the EPA new mileage are correct (big assumption here, but they’re getting better). Finally, let’s assume that the price per gallon of gas would increase 10% every year. That’s a pretty conservative assumption, considering the proce of gas can fluctuate as much as 15% a day!!!
One final assumption – that you own your car the minute you drive it off the lot – in other words, no interest on any car loans…
So if you crunch the numbers, what do you get? If you compare a base Honda Civic with it’s hybrid sister, the sweet spot is about $4.50 a gallon in todays world. Compare the Civic with it’s Toyota cousin, the darling of the media, Prius, and the sweet spot is actually $3.50 a gallon (or about what gas is currently!).
So looking strictly at the numbers, it takes about 5 to 6 years to recoupe the investment of going green. Not bad. This also doesn’t factor in any tax rebates your state or the Feds may give you (that’s a post all in itself), so your mileage may vary.
