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Experts examine value of buying a hybrid car

Personal Finance. By Katherine Vogt, amednews staff. July 12, 2004.

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Tom Drennen knows a good value when he sees one. After all, the economist thinks about what value means in the world. So it might have been a surprise that even though he looked into the value of hybrid cars -- which use gas and electric power -- and determined that they are not a cost-efficient alternative to traditional cars, he decided to buy one anyway.

"I think it's the right thing to do for the environment. I think global climate change is a real issue, and it bothers me to be driving a car that's spewing carbon dioxide and other pollutants into the air," said Drennen, who is on a waiting list to get a Toyota Prius hybrid car.

Drennen, an economics professor at Hobart and William Smith Colleges in Geneva, N.Y., and other observers have calculated costs and made projections to determine whether consumers can save money buying these cars, which run on both gas and electricity. Though hybrids cost more than traditional cars, they get better gas mileage, and buyers can get a tax credit for choosing them.

Hybrids have become available only in recent several years. There are currently only a few models available in the United States, but several more are expected to be rolled out soon.

The fuel efficiency of hybrids has obvious environmental advantages, a draw for many consumers. But the fuel efficiency also might mean more to consumers now as they face soaring prices at the pump.

According to the Energy Information Administration, a branch of the U.S. Dept. of Energy, the average retail price for regular gasoline was $1.94 per gallon on June 21. Though it marked the fourth week in a row that prices had slightly decreased, the price was still 44 cents higher than the same time a year ago.