Spirit of Money: Hybrids vs. Conventional Cars

Q. My car is on its last gasp, and I would love to buy a new one that's more environmentally friendly. How do the costs of hybrids compare with those of conventional cars?
--Gina G., Newark, New Jersey

A. With gas prices fluctuating, more people are looking to hybrid cars for relief. But with hybrids averaging nearly $3,000 more than their gas-powered counterparts, it's natural to wonder whether the higher price makes sense.

In terms of environmental cost, a hybrid car easily trumps a conventional gasoline-powered one. If we want to leave behind a beautiful, healthy planet for our children and grandchildren, it is vital that we address one of the most pressing environmental concerns today -- global warming. Numerous scientists, including those at the nonprofit Union of Concerned Scientists and Princeton University's Carbon Mitigation Initiative (CMI), agree that we must cut global emissions to half of today's levels over the next 50 years if we want to avoid the worst effects of climate change. As we're already seeing, these effects range from increasingly severe weather patterns to the endangerment of entire ecosystems.

In terms of your pocketbook, Edmunds.com found that of the hybrid models on the market in August 2006, the Toyota Prius and the Ford Escape Hybrid, recouped their additional costs within three years. They accomplished this thanks to fuel savings and tax credits offered by the IRS and some state governments, which range from $250 to $2,600, depending on the hybrid.

The tax incentive is only temporary, though, which is why the Union of Concerned Scientists (ucsusa.org) encourages people to write to their local members of Congress to eliminate the "manufacturer cap." This stipulation phases out the federal credit for vehicles made by any company that has sold more than 60,000 hybrids. (Toyota and Lexus, for example, met the cap last fall, so buyers currently qualify for only half of the tax credit.) Of course, no amount of incentives can compete with the best option for the environment: getting out of the car and walking, biking, or taking public transportation instead.

Text by Tracy Fernadez Rysavy

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