Does Leasing a Hybrid Erase Gas Savings?

vcordovavcordova Member Posts: 1
edited March 2014 in General
I'm in the market for a car and am considering a hybrid to save on gas. However, factoring in the higher price, and my preference to lease a car for 2-3 years, in doing so, is it likely that I will not take advantage of whatever better gas mileage the hybrid will give me over the regular gas car? In other words, are the $$ savings in a hybrid only materialized in the longterm? Thank you for any thoughts.



  • mirthmirth Member Posts: 1,212
    ...on the residual value for the car. Maybe for a Prius this would work (i.e. you would actually save money on gas), but I doubt on any other hybrid that you would save anything.
  • midnightcowboymidnightcowboy Member Posts: 1,978
    The Hybrid premuin takes 3-5 years to recover depending on how many miles a year you drive. Therefroe if you keep a car less than 3 years a hybrid will almost always cost more (95% +).

    Hybrids have never been know for low Total Cost of ownership 9TCO). They are "green" and obtain great gas milage , but htat is about it becuase they are expnsive in comparison to other vehilcels.

    For low cost, get a Totota Yaris, Toyota Corolla, Honda Fit, Kia Rio, Chevrolet Cobalt or Chevrolet Aveo. All have low TCO and can be had with differnt features.

    Good Luck,

  • nbkramer1nbkramer1 Member Posts: 7
    I have an old Honda Civic and I was thinking of leasing a Hybrid, does it make any sense to do that? :confuse:
  • Kirstie_HKirstie_H EdmundsAdministrator Posts: 11,126
    How old a Civic, and what kind of MPG are you getting?


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  • nbkramer1nbkramer1 Member Posts: 7
    1994 LX-A with about 86M miles. I don't know specifically the MPG, but it is mediocre at best.
  • 1stpik1stpik Member Posts: 495
    It makes no sense to lease a hybrid, primarily because used hybrids suffer very little depreciation.

    Right now you can lease a Civic Hybrid for 3 years for $1,000 down and $440/month. You can only drive it 12,000 miles per year. After three years, you have to give it back to the dealer for free or pay a high residual to buy it.

    Or, you can buy a Civic Hybrid for the same $1,000 down and $640/month ($200 more than the lease). You can drive it unlimited miles per year. After three years you can trade it on a new car, sell it yourself or just keep it -- your choice.

    The purchase will cost you $7,200 more than the lease. After three years, your Civic Hybrid will be worth $16,400 if you trade it in for a new car.

    So the extra $7,200 you spend over three years buying the HCH nets you more than $16,000 equity in the car. In other words, it reduces the price of your next car by $16,000 (plus a major reduction in sales tax).

    If you lease, you have an extra $7,000 in your pocket, but you have to pay an extra $16,000 for the same car. That's a net loss of $9,000!

    This is why dealers LOVE customers who lease! They pay thousands of dollars to rent a car, then turn it in three years later in pristine condition so the dealer can re-sell it at full retail book price, THEN rent another car.

    People who lease cars saddle themselves with perpetual payments, and always wind up with zero equity and zero car when the lease ends. It's a downward spiral.

    Leasing might work on some American or Korean cars because they take HUGE hits in value after a few years use. But Japanese cars, particularly Japanese hybrids, retain so much value that leasing them is only a good deal for car dealers!
  • stevedebistevedebi LAMember Posts: 4,098
    "It makes no sense to lease a hybrid, primarily because used hybrids suffer very little depreciation. "

    As more hybrids are built, the current good resale values will probably not hold up. Also, as the vehicles approach 8/10 years or 120/150K miles (or rather, the potential buyers will face these values), the prospective owners will lose the protection of the hybrid components warranty. The current resales of hybrids are well under the mileage/age limits.

    Just a thought on resale. It is difficult to predict what things will be like in 3 years, but if Toyota is really serious about making 1 million hybrids per year by 2010, there will be a lot of new hybrids around, and they won't be unique.

    Also, options for 50-state clean burning diesel will debut in 2008-2009, which will provide hybrid alternatives that do not have limits on age or mileage.

    All this is not to say that resale values will crash, but I think the current market is not representative of the likely market in 3 years.
  • 1stpik1stpik Member Posts: 495
    Oh yeah? Isn't that what the automotive press said three years ago?

    I'm not picking on you, just pointing out that what the auto industry promises and what they deliver are two different things.

    I remember reading Road & Track in junior high back in '82. Those "concept cars" they showed -- you know the ones that were just a few model years away -- look just about like the real cars of today, 25 years later!

    Hell, when I was a kid, the big thing was "THE YEAR 2000." Everyone called it that in the 70s and 80s, "THE YEAR 2000." Never just "2000." It was gonna be a big deal, when we all drove supercars and vacationed in outer space and lived to 150 years old.

    Here we are, 7 years after "THE YEAR 2000," and my biggest dream is that I might actually get a few social security checks in 25 years before that whole system goes belly up!

    So forgive me if I don't see major changes in store for the car market in the next three years. That industry is all hype.

    Hyundai was already supposed to have a hybrid Accent, but they put it off until at least 2009. When '09 comes, they'll put it off again. Volkswagen can't even sell it's TDI here anymore because Congress enacted tougher emission restrictions. Yeah, stricter on 40 mpg diesels, but bigger tax breaks for 5,000 lb. SUVs. In a few years, VW will meet the requirements, but doing so will make the TDI so expensive that it'll make hybrids look cheap.

    The american car companies halted their technological advancement in the late 1980s. Everything since then has just been bigger and heavier, which to them means "better."

    GM fiddled with the EV1 electric car back in '96. They never thought it would work or sell, but it did both. So they killed the project, then seized and destroyed all the EV1s. Then they went right back to churning out Impalas and Suburbans, which weren't big and wasteful enough, so they started pushing Hummers.

    Yeah, we're all still waiting for those "big changes" that are right around the corner. Maybe GM will start offering 0% financing for 7 years instead of just 6. And maybe Ford will finally move all its factories plus its headquarters south of the border, and officially change the company name to El Fordo.

    Won't that be exciting?
  • stevedebistevedebi LAMember Posts: 4,098
    I assume you were replying to my post directly before yours. If you hit "reply" in the future people will be sure...

    "I'm not picking on you, just pointing out that what the auto industry promises and what they deliver are two different things."

    I think Toyota is pretty serious, although I still think they will be more likely to offer the HSD only on lighter vehicles, where it does the most good and makes the money back. They have already put HSD in the Camry, their most popular vehicle. The Matrix, Yaris, and Corolla are questionable, in my mind, as they might steal sales from the Prius.

    I stand by my statements, however. They are based on my observations of the current state of events in the hybrid world, and my personal estimates of what will happen. Crystal balls can be cloudy, however. YMMV.

    There are a lot of unknowns that I didn't mention in my post, and I won't bother with here. But the point is that future resale for those purchasing new hybrids NOW may not be as good as for those selling 3 year old hybrids now.
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