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About three years ago, as the price of gasoline began creeping up, hybrid cars started becoming more and more popular. While this makes perfect sense, I always kind of felt that people were buying these hybrids – in particular, the Toyota Prius – in an attempt to own the “in” car.

My theory shifted dramatically when things really hit the fan earlier this year, and many of us were paying in excess of $4 per gallon to fill up our cars. At that point, owning a hybrid went from simply being the cool thing to do to the financially and environmentally smart way to get around town. After all, reducing your gasoline consumption can save both money and the environment.

So, owning a hybrid should be a win/win situation, right? Not necessarily.

While there’s no doubt that hybrid cars get great gas mileage, it’s not as if this increase fuel efficiency comes for free; you’re going to pay a premium to own that hybrid.

To illustrate what I’m talking about, let’s look at two cars that get great fuel economy: the Toyota Prius – a hybrid – and the Toyota Yaris – a non-hybrid. (I suppose you could choose any fuel efficient non-hybrid and swap it out for the Yaris, but for the sake of trying to keep everything relatively comparable, I stuck with another Toyota.)

Anyway, let’s check out the specs for these two cars:

TOYOTA PRIUS:

PASSENGER ROOM: 96.2 cubic feet

HORSE POWER: 76 HP @ 5000 RPM

FUNCTIONAL AVERAGE FUEL ECONOMY*: 46.7 MPG

COST: $21,500

TOYOTA YARIS:

PASSENGER ROOM: 86.3 cubic feet

HORSE POWER: 106 HP @ 6000 RPM

FUNCTIONAL AVERAGE FUEL ECONOMY*: 38.2 MPG

COST: $11,550 MSRP

* Functional average fuel economy comes from FuelEconomy.gov. Their site doesn’t produce direct links, so if you don’t believe the stats I have listed, feel free to check out their site. Even if you do believe me, it’s worth checking out their site!

So, for about $10,000 more, you’re essentially buying a slightly bigger car and getting 8.5 extra miles per gallon. Unfortunately, unlike several years ago, there is no longer a tax credit for buying a Prius. That credit expired in October 2007, so you can’t use that to help offset the higher cost of the car.

In order to recoup the extra up front cash expense, you’d need to drive your hybrid 560,000 miles over the life of the car, assuming an average gas price of $3.75 per gallon. And, keep in mind, by owning the Prius as opposed to the Yaris, you’re likely to pay more in interest (if you’re financing the car), personal property taxes and insurance.

(If you’d like to double check my math, you’re more than welcome to check out this spreadsheet.)

I know there are plenty of you out there who believe we should do whatever we can for the environment, no matter the cost. That’s fine, and that’s certainly your prerogative. But, keep in mind all of the other environmentally friendly products you could buy using that saved $10,000:

Replace every bulb in your house with CFL bulbs

Install reduced flow shower heads and toilets in every bathroom

Replace older appliances with more energy efficient models

Better insulate and seal your home to avoid energy leaks

Combining these things plus the probably many other things you could do in under $10,000 probably has more of an environmental impact than getting slightly better fuel economy. In essence, you’d be getting more bang for the buck.

So, long story short, while owning a hybrid car certainly is a great way to do your part to help with environmental issues, it might not be the most cost effective or productive way to get the job done.