A car is one of the largest expenses many Americans have. Over the past few years, the price of a new car has risen rapidly along with the costs of car repairs, insurance, and almost everything else.
There are many reasons for higher prices, including manufacturing disruptions during the pandemic, shortages of available workers, supply chain shortages, high demand, and inflation.
Although many Americans are open to buying an electric car — 55% according to Gallup — many people are choosing to buy a hybrid instead. While car buyers want cars that are more energy efficient, they also want them to be less expensive than electric cars.
Why do people choose hybrids over electric vehicles?
The latest data from Edmunds shows that Americans bought more than 1.2 million hybrid vehicles in 2023, a 76% increase from the previous year.
Hybrid cars have their day in the sun thanks to their combination of energy efficiency and practicality.
First, it’s cheaper than many electric cars on the market, considering that the average price of an electric car in 2023 was $59,400 compared to $42,381 for a hybrid, according to Edmunds.
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They are also more practical for many car buyers because they do not rely solely on electricity. Public chargers aren’t ubiquitous in the US yet, and even if you have access to fast charging stations — which are less common — getting your battery to 80% can take between 20 minutes to an hour, which is much longer than Fill the hybrid with gas.
Finally, there’s no concern about driving range with a hybrid. When the battery runs out of power or reaches a certain speed, the gas-powered engine kicks in. This alone is reason enough for many car buyers to choose a hybrid car over an electric car.
One way buyers won’t save money by using a hybrid
While many car buyers can save money by choosing a hybrid car instead of an all-electric car, one expense will likely be expensive regardless of their choice: car insurance.
Because hybrid vehicles have many of the same components as electric vehicles, such as electric motors and batteries, they can cost more to repair than gas-powered vehicles. Progressive says expensive battery packs and a shortage of technicians who know how to work on electric vehicle systems can lead to higher insurance costs for electric and hybrid vehicles.
In some cases, hybrid car insurance may actually cost more than electric vehicle insurance. Consumer reportShe found that insuring a Toyota Prius, a hybrid, costs $1,905 a year, $35 more than insuring an all-electric Nissan Leaf.
This makes it even more important for hybrid and electric vehicle owners to compare car insurance companies and shop for plans.
How to save up to $7,500 on a new hybrid car
The good news for potential hybrid car buyers is that the U.S. government has made it easier to get a $7,500 tax credit — or $3,750, depending on the model — for some electric and hybrid vehicles this year.
Last year, buyers had to claim the credit when filing their taxes (which was more complicated), but this year, the credit can be applied immediately at the dealership when purchasing a qualifying vehicle. You can find out which vehicles receive the tax exemption on the US Department of Energy website.
With many electric vehicles out of range (pun intended!) for many people’s pocketbooks, a hybrid vehicle may be the right balance between energy efficiency and cost. And with the latest government incentives, now might be a good time to find one.
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