Are Hybrids a Financially Prudent Buy? Here's What You Need to Know
In the first half of 2021, The Washington Post reported that "hybrid sales grew 142 percent," while overall car sales grew 29 percent. In a recent Tiktok, I offered the Prius C as an alternative to the popular large SUVs and pickups. Available only on the used car market since being discontinued in 2019, it costs less and is smaller than the traditional Prius, making it perfect for budget-conscious consumers in cities with limited parking.
The comments inevitably brought up concerns about the "cost of replacing the hybrid battery." It's a concern that many car owners have about switching to a hybrid vehicle, despite their growing popularity.
While electric cars are the big thing in the headlines these days, many Americans lack the resources or infrastructure to purchase them, and they aren't readily available in many markets. However, mass-produced hybrid vehicles in the United States have been around for over two decades. The launch of the Toyota Prius started an avalanche of sorts. It was quickly followed by the Honda Insight, the Honda Civic Hybrid, and the Ford Escape Hybrid, and others.
Today, according to Edmunds, there are ninety 2021 hybrid models available for sale in the US. And they are in high demand despite many consumers' concerns due to common misconceptions, myths, and just general knowledge gaps about the financial implications of what they perceive as relatively new technology.
By the way, hybrids and plug-in hybrids are just different enough that this article focuses on non-plug-in hybrid technology.
Courtesy of Ford
Cost of Battery Replacement
Hybrid batteries can be pricey to replace, but they don't cost nearly as much as many consumers assume. Most car manufacturers guarantee the hybrid battery for at least eight years or 80,000 miles, with Toyota, Hyundai, Chrysler, and others offering coverage for at least 10 years or 100,000 miles—some longer.
But besides the coverage, these batteries don't go bad anywhere near as often as popular opinion dictates. Experts say that most batteries never have to be replaced, but when they do, it's rare and only after 12 to 15 years.
While there are some hybrid batteries that are pricey, particularly those for Ford hybrid models, most hybrid batteries run significantly less. For example, the popular Toyota Prius Battery can usually be replaced for around $3,000. And while that might still seem like a lot, hybrids are known to require fewer repairs than traditional cars. In fact, most hybrids cost less to own over the course of the life of the car than a traditional vehicle.
Let's put the cost of the battery into perspective. The cost to replace an engine runs around $4000 to $8000, depending on the vehicle. Transmission replacement averages $2,600. A catalytic converter can cost a car owner between $1,695 and $1,733. These are all parts that can, but don't always, fail after 12 to 15 years. Of course, that doesn't stop folks from buying cars, because all cars fail at some point.
Higher Vehicle Price
Hybrid vehicles cost more than their non-hybrid counterparts, but cost less to maintain and to fuel up. Let's start with fuel costs. A 2021 Toyota Camry Hybrid LE, for example, has an MSRP of $27,270, while the non-hybrid 2021 Toyota Camry LE starts at $25,045 for a difference of $2225. The Hybrid version will cost you $950 a year at the pump, while the non-hybrid Camry costs a whopping $1550. That's a difference of $6000, a savings of far more than the difference.
Due to regenerative braking technology and less wear, hybrid vehicles often cost less to maintain. RepairPal's vehicle reliability data from 2019 finds that cars, on average, cost $652 a year to repair and maintain. That Prius C mentioned earlier has an annual average repair and maintenance cost of only $383. The full-size Prius averages $408, while the Honda Insight averages just $392. These annual repair averages include any possible risk of battery replacement.
New Technology Failures
Hybrid vehicles are not new by any stretch—and have over two decades of innovation driving the technology. The technologies also tend to come with hefty warranties, far exceeding the traditional three-year or 36,000-mile warranty that most consumers expect, and going even further than traditional drivetrain warranties of five years or 60,000 miles. In addition to being backed by warranty, hybrid technology has proven reliable, and as mentioned earlier, maintenance and repair costs tend to be less for hybrids than their ICE (internal combustion engine) counterparts.
Final Thoughts
Hybrid cars do cost more, and their batteries are fairly expensive. However, when you look at the whole picture, you'll find that in most cases of longer-term hybrid ownership, the financial benefits far outweigh the initial upfront cost and the risk of possible battery failure.
