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Want to save money on gas and get a better deal on buying a car? See how much you can save with a hybrid car — and how to get EV tax credits. [[{“value”:”
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The costs of car ownership have been getting more expensive in the past few years, with skyrocketing prices for auto insurance and rising interest rates for auto loans. There has been some good news recently for car buyers: used car prices decreased by about 7% during 2023, as the global economy has (hopefully) worked its way through the worst supply chain problems from the pandemic.
But no matter what your budget situation might be, buying a car is never a cheap or simple endeavor. If you want to save money on gas and on the total cost of car ownership, you might be tempted to buy an electric vehicle (EV) in 2024. But EVs can be expensive. According to Kelley Blue Book, as of January 2024, the average price of a new EV was $55,353, compared to $47,401 for an average new car. It might take you several years to save enough money on gas to recoup that $7,952 upfront cost difference.
If you’re not ready for an EV yet, buying a hybrid vehicle can give you savings on gas, but without the range anxiety. Let’s look at a few examples of how much money you can save with a hybrid vehicle compared to a conventional gas-powered car.
Why buy a hybrid car instead of an EV
Even if you’re concerned about climate change and intrigued by EV tax credits, not everyone is ready to buy a fully electric vehicle. If you don’t have a garage or an easy way to charge an EV battery at home, it’s understandable to have range anxiety about EVs — especially since free, reliable public EV charging stations are not always easy to find.
Hybrid vehicles don’t cause range anxiety. That’s because they run on 100% gasoline, just like a standard car. But hybrid cars can be good for the environment (and for your bank account) in other ways: they get much better gas mileage than a typical car. And this can make a hybrid car worth buying, even if the cost is slightly higher than a standard gas-fueled car.
How much you can save on gas with these five hybrid vehicles
The best way to understand your hybrid car cost savings is by comparing the gas mileage to a standard gas-powered car. The U.S. Department of Energy has a free calculator on FuelEconomy.gov that can show you how much you can save with a hybrid vehicle, based on comparing MSRP (selling prices), gas mileage, and more.
Here are a few makes and models of hybrid vehicles that we pulled from the U.S. Department of Energy calculator. For each, let’s assume that you drive the national average of 13,476 miles per year, at the current (as of May 4, 2024) average national gas price of $3.659 per gallon.
Here’s how much you can save on gas with these five hybrid vehicles — compared to a regular “non-hybrid” version of the same car:
Exact cost savings vary based on the type of vehicle and how you drive. If you drive more miles, and/or if gas prices go up, the cost savings of your higher gas mileage hybrid will go up, too. But according to these estimates, these five popular models of hybrid vehicles would give you an average savings of $611 per year on gas.
Want EV tax credits? Choose this special type of hybrid vehicle
One drawback of hybrid vehicles is that they do not qualify for EV tax credits. But there’s one special variety of hybrid that does: plug-in hybrid electric vehicles, or PHEVs. I drive a plug-in hybrid Toyota Prius Prime, and it’s my all-time favorite car.
You can get new EV tax credits of $3,750 or $7,500 for some new plug-in hybrid electric vehicles like the Ford Escape Plug-in Hybrid or the Chrysler Pacifica Plug-in Hybrid. But only some vehicles qualify for the new EV tax credits — it depends on where your car was assembled, and where your car’s battery components were sourced.
Or if you want to choose from a wider range of carmakers, you can get used EV tax credits of up to $4,000 for pre-owned plug-in hybrids. This can be a good strategy to save money on a used car in 2024.
Keep in mind that to get EV tax credits (new or used), your income must be below a qualifying limit. Get more details at FuelEconomy.gov.
Bottom line
Before you decide to buy a hybrid car, plug-in hybrid, or other vehicle, shop around for cheap car insurance quotes. Hybrid car insurance can sometimes cost 7%-11% more than a standard vehicle, according to insurer Lemonade. You might want to increase your deductible or try other cost-savings strategies to reduce your car insurance costs.
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