Your analysis makes sense, but since the tax credit is long gone and the price differential is wider than it might have been when you purchased it, I think the two year payback was not realistic (a year ago) before the recent surge demand related to the increase in fuel cost...and definitely not any more.

 

Since EVERY hybrid write up I see always compares the "pay off time" for the difference in price, I say it works BOTH WAYS....


Spend the extra money on the hybrid up front, increasing hybrid demand and helping to further technology (while REDUCING foreign oil dependence).

OR

Save a few bucks on the gas only car up front, but then spend all the savings (eventually) INCREASING Foreign oil dependence by purchasing more gas...

Would you rather spend YOUR dollars on the vehicle or on THE OIL??

Your Country, Your future, Your decision...

08FEH

 

Credit for the TCH was always $2600 base level, not $2700. I got mine very early too (just passed 2 years a couple weeks ago). And I can't deny I feel a little pleased I managed to be ahead of the curve on this. I managed to find one coming in within a week (after calling every dealer around Boston). No negotiating on TCH at the time, but loved (love!) the car anyway and the full $2600 credit was nice.

 

Yes, sorry for the wrong number. I lost $80 due to the AMT, so I got $2520 and not the $2600 I said earlier from a rather faulty memory! Looks like I lost half my pre-paid-off time I had calculated!

-- Alan

 

All of the articles I read talk about the Prius sales being impacted by the shortage of batteries. Does anyone know if the Hybrid Highlander sales are being impacted?

 

That price premium for hybrids is really difficult to calculate because it depends on how you approach the problem. If you were considering the V6 XLE, then the price premium is indeed small (or maybe negative?). However if you were considering a 4 cylinder LE a large number of options you might not want (or can afford) are forced on you to get the hybrid. For such a purchaser, the premium can probably never be paid off.

As far as the environment is concerned, hybrids are production limited so the companies (not just Toyota) put the hybrid option on loaded cars. It would make more sense for the environment to make hybrids where the number of gallons saved per year would be optimized, namely with high-mileage, large vehicles. This would mean we should see hybrid trucks (where are they?), buses (I understand GM does make hybrid city buses), and taxi cabs (probably SUVs).

 

The price premium is not dependent on what vehicle you were originally considering, but on the difference between similarly equipped hybrid and non-hybrid versions of the car.

The argument arises when people compare the hybrid version to the 4 cylinder, since they both have 4 cylinder gas engines. In many people's opinion (including mine), the true comparison is the hybrid to the V6 since they have similar performance characteristics.

Using the V6 as the benchmark, I believe the premium is less than $1,000 for the hybrid based on MSRP alone. Then you also have to consider that supply and demand means you can probably get a better deal on the non-hybrid version. When I bought my '09 TCH a few months ago, I was able to get it for $1,000 over invoice, which I felt was a pretty good deal, and probably not much worse than I could have done on a non-hybrid.

In some cases, the premium for the hybrid is offset by tax credits or other incentives. I got mine while the State of Illinois was still offering a $1,000 debit card on hybrid purchases.

All-in-all, I figure I paid less than a $1,000 premium for my hybrid. If you compare the 40MPG it gets me to an estimated 24MPG for a V6 version, my payback period is about a year.

And if you compare it to the 20MPG my last car was getting, quite a bit of my $380 car payment is offset by the $125 per month I'm saving in gas.

 

You shouldn't need to purchase unnecessary accessories that you don't want of can't afford. Toyota will accept custom/factory orders. Your dealer will probably balk but stick to your guns or try another dealer. Granted with the scarcity of Hybrids and a long list of buyers it may be more difficult now than, say, a year ago. It is worth trying if the cost of that extra do-dad is keeping you from affording the hybrid.

 

Even a base Hybrid is over $5k more than a base LE. We could afford the >$30k price of the available hybrids (and we did buy one), but when we were shopping, initially for a conventional car, and looking at Camrys, we only considered the LE, because neither of us liked the light wood highlights in the XLE or the sporty appearance of the SE. We also only considered the 4 cylinder because of economy and the bad reputation of the auto transmission in the V6. So our choice was $20k for an LE or $30k for the hybrid. It was a a $10k premium less about $1200 after tax credits were considered, but not a difference that will ever be justified on fuel savings alone.

They can hide lots of the extra cost by making it equivalent to upscale models, which have always had higher margins. I think we will only know the TRUE premium when "hybrid" becomes a line item option (like "V6") across all models.

 

FWIW...I work for a major truck manufacturer, and we currently offer a hybrid version of our medium-duty truck. It IS a separate line item, and it's about $50,000.

Keep in mind that buyers of these units can get a tax credit of up to $12,000 plus fuel savings of $10,000 or more per year. Figuring that the truck will be used for 10-15 years, it's not a bad deal.