Study Find Hybrids Quickly Pay For Themselves

A new study by Edmunds.Com finds that some hybrid cars will pay for themselves in 2 years, because high gas prices and tax credits from the U.S. government on the more fuel efficient vehicles. The cost is even more quickly recovered when hybrids are compared to less efficient cars. Also, the study assumes that gas prices will remain at $3 per gallon in the coming years.

Edmunds says the average hybrid car costs $1,200 and $7,000 more than traditional versions of the same vehicles.

The shift is significant because analysts have said that higher sticker prices were constraining hybrid sales. Hybrids currently account for 1 percent of new car sales in the United States. The consumer-focused Web site said that assuming vehicles were driven 15,000 miles per year and gas was priced at $3 per gallon, owners of the Toyota Prius and Ford Motor's Escape Hybrid would break even within three years.

Buyers of the Saturn Vue Green Line from General Motors, the Toyota Camry and the Civic Hybrid from Honda Motor would break even within six years, Edmunds.com said. But federal tax credits for hybrid buyers are being phased out on the most popular models. Under a provision of the tax code, buyers of a Toyota hybrid after Sept. 30 will only qualify for half of the tax credit for which they would have previously qualified.

Tax incentives will also be cut on other hybrids after auto makers sell 60,000 of the vehicles--a sales threshold Toyota has reached. The tax credit on Toyota and Lexus hybrids is scheduled to drop to 25 percent in April 2007 and then be eliminated in October 2007. From CNET

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