Are Hybrids Worth It? The Answer Will Surprise You


Hybrid Cars

Are you thinking of buying a hybrid car to save money on gas?

If you’re like many, the answer is yes.

But before you start looking at various hybrid vehicles and getting excited about the money you’ll save, know that you might spend more money overall.

While you’ll lower your gas cost with a hybrid, your overall spending can be higher.

In some cases, it can be much more.

To help you reduce car expenses, here’s a detailed look at which hybrid vehicles will save you money and which gas-only counterparts are a better choice.


While hybrids will offer you gas savings, the higher purchase prices results in many buyers not actually saving any money
In many cases, you won’t begin to save money until at least year 5
A better option is to buy an electric car, or take steps to lower your fuel costs

Are Hybrids Worth It? A Detailed Look To Make a Smart Financial Choice

Do Hybrid Cars Save You Money?

are hybrids worth it

To know if a hybrid car will save you money, you must look at all the costs involved when owning a car, not only the savings from buying less gas.

We conducted a detailed analysis of car ownership, covering the following expenses:

  • Purchase price
  • Maintenance costs
  • Insurance costs
  • Gas savings
  • Purchase incentives
  • Ownership benefits

Then, we crunched the numbers to see which hybrids are intelligent buys.

Some winners include the Toyota Camry, Honda CR-V, Lexus NX 350h, and the Toyota Highlander.

Before we dive into the details for each vehicle we analyzed, let’s take a quick look at how the above expenses impact the hybrid version compared to the gas version.

Purchase Price

New Car Price Comparison

The amount you pay for a car significantly impacts whether you’ll lower your car expenses.

And since most hybrid vehicles cost more than the gas version, this is why so many end up not saving you any money at all.

According to new car prices for 2024, the average price of a hybrid is $1,300 more than a conventional car.

For SUVs, a hybrid vehicle has an initial price premium of $2,969 compared to a gas-powered SUV.

As a result, you need to save more than this difference in fuel costs to come out ahead.

Maintenance Costs

Maintenance costs vary by make and model, and, as a result, you cannot say that all hybrids cost less to maintain.

For example, many people will argue that since hybrids use regenerative braking, you’ll pay less for repairs because the brake pads won’t need replacing as often.

While saving on brake replacement, you must remember that not all mechanics work on hybrid cars.

So, while you might currently use an independent mechanic, with a hybrid, you might have to take it to the dealership for service, which costs more.

Another major concern many potential hybrid owners have is with the hybrid battery.

A hybrid battery replacement can cost between $2,000 and $5,000.

Many fear the battery pack will only last a certain length of time or a number of miles.

The truth is that car manufacturers build hybrid car batteries to last the vehicle’s life.

Many manufacturers offer standard warranties on hybrid batteries that last up to 10 years and cover 100,000 miles.

This warranty is much longer than the warranty most conventional car engines have.

There are even stories of hybrid taxi cars whose batteries last more than 300,000 miles!

Insurance Costs

There’s a belief that the cost to insure a hybrid is much less than an internal combustion engine version.

Many see a typical hybrid driver as someone who’s not aggressive.

Additionally, some insurance companies offer discounted rates to owners of hybrids.

However, some insurance companies charge more to own a hybrid.

This is because they see a costlier car in terms of repair.

Not only do they have to cover the traditional internal combustion engine, but they also have to cover the hybrid setup.

When speaking to Allstate agent Anthony Perretta, we discovered some hybrids cost more than the gas-only version.

For example, the 2023 Volvo XC90 Recharge Plus plug-in hybrid costs $158 more to insure versus the non-hybrid version.

The same holds with the Toyota Highlander, with the hybrid costing $101 more annually.

Your best bet is to ask your insurance carrier what the annual premium would be and then compare that to another insurance company.

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Gas Savings

Fuel savings is where hybrids shine, using less fuel to operate.

To determine if there are any savings here, you need to look at the cost of fuel and the number of miles you drive your car.

Assuming gas costs $3 for regular, and you drive 15,000 miles annually, if you get 31 miles per gallon combined highway and city driving, you’ll spend $1,452 annually on fill-ups.

If you can get 47 miles per gallon combined, you’ll spend $957 annually.

Here’s the calculation for you to do for any vehicle you’re considering buying:

Step 1: Annual Miles Driven x Fuel Price = Cost of Fuel Per Mile
Step 2: Cost of Fuel Per Mile divided by Miles Per Gallon = Annual Cost of Gas

So, if you drive 15,000 per year, you multiply this by the fuel price of $3 to get 45,000, which is the cost of fuel per mile.

Then, you divide that number by the car’s MPG gallon rating – in this case, 31 – to get an annual fuel cost of $1,452.

There are critical things to remember about this calculation.

First, the fewer miles you drive or the lower the gas price is, the less money you’ll save.

Using the same numbers but adjusting gas to $2 per gallon results in annual fuel costs of $967 (31 MPG) and $638 (47 MPG).

While you’re still saving money, the difference was $495 in the first example. In the second example, it was $329.

Second, you have to account for the type of driving you do.

Typically, hybrids get much better fuel consumption in the city versus the highway compared to an internal combustion engine version.

If you only do short, stop-and-go trips, your savings will likely be much more.

This is why it’s critical for you to do the math to determine your actual fuel savings.

Purchase Incentives

The next thing to consider when determining if a hybrid is worth it is if there are any incentives when buying the car.

This is critical, as we’ve seen that the initial costs of a hybrid tend to be higher.

There are a few levels of incentives to look at.

The first is with the dealer or manufacturer.

Many times, dealers will offer cash back or rebates on various models.

Sometimes, the dealer or manufacturer will offer a discount to help sell more vehicles.

The hybrid may have a higher incentive, offsetting the higher purchase price.

The next area to look at is government tax credits.

In years past, the government offered a tax credit for any hybrid, but this is no longer the case.

The current tax law for hybrids allows for a credit when buying an electric or plug-in hybrid vehicle.

These tax incentives are anywhere from $2,500 up to $7,500.

Here’s a great reference to review.

Some states also offer a credit on your tax return, and some utility companies offer a rebate if you buy an all-electric vehicle or plug-in.

Again, most of these credits are on plug-in hybrids and pure electric vehicles only, but you should check to see if you qualify before buying.

Ownership Benefits

Owning a hybrid car has additional benefits that don’t impact your wallet directly.

However, they are important to mention.

  • With a hybrid, you’ll have more free time by not having to run to the gas station as frequently.
  • With a hybrid, you could drive in the HOV lane, escaping traffic, saving time, and avoiding stress.
  • You help the environment by having a smaller carbon footprint.
  • Some companies allow hybrid owners special parking spots and other company perks.

You’ll have to determine what, if any, of these factors play a role in owning a hybrid car.

While you can’t put a monetary value on them, you’ll have to decide if not filling up as frequently will improve your life and if that happiness is worth it.

For example, if saving 15 minutes by not going to the gas station as often is a significant win for you, is it worth paying an extra $4,000 for a car?

Ownership Breakdown of Popular Hybrid Cars

Now it’s time to dig into the details of popular vehicles to see if the hybrid model will save you money compared to the traditional vehicle.

Data comes from Edmund’s Cost of Car Ownership data. (Please note the fuel costs fluctuate along with the price of gas, so the numbers I present below may differ from what Edmund’s lists.)

2024 Toyota RAV4 Hybrid

The RAV4 has been a top-selling SUV for Toyota, so offering a hybrid option only makes sense.

The table below shows the 5-year cost to own for three versions: gas, hybrid, and plug-in.

Car Model Price Annual Fuel Costs Annual Insurance Costs Annual Repair & Maintenance Costs Five Year Ownership Cost
RAV4 Limited $36,980 $2,094 $813 $1,197 $57,501
RAV4 Hybrid Limited $40,030 $1,465 $838 $1,227 $57,677
RAV4 PRIME XSE $47,560 $1,543 $813 $1,252 $65,602
To get 5-year cost to own, multiple annual fuel, insurance, and maintenance by 5 and add price.

The hybrid version costs you $176 more over five years compared to the gas version.

On an annual basis, you spend an extra $35.

While the hybrid does get better fuel economy, it is over $3,000 more to buy.

Plus, insurance and maintenance is higher as well.

Finally, while the plug-in version appears to be a poor choice, you have to factor in the $7,500 rebate, which brings the five-year cost down to $58,102, in line with the other models, but still not a smart move if your goal is to save money.

2024 Honda CR-V Hybrid

The story with the CR-V is similar.

After five years, you save $1,533, or $306 per year.

Car Model Price Annual Fuel Costs Annual Insurance Costs Annual Repair & Maintenance Costs Five Year Ownership Cost
CR-V EX $32,010 $2,020 $718 $1,129 $51,346
CR-V Sport Hybrid $34,050 $1,582 $783 $787 $49,813
To get 5-year cost to own, multiple annual fuel, insurance, and maintenance by 5 and add price.

Again, both insurance and maintenance costs are higher with the hybrid.

If you want to come out ahead, you need to own this SUV for a while.

2024 Toyota Camry Hybrid

Switching over to a sedan, the Camry resembles the CR-V above.

Car Model Price Annual Fuel Costs Annual Insurance Costs Annual Repair & Maintenance Costs Five Year Ownership Cost
Camry LE $26,420 $1,838 $811 $747 $43,398
Camry LE Hybrid $28,855 $1,128 $831 $685 $42,079
To get 5-year cost to own, multiple annual fuel, insurance, and maintenance by 5 and add price.

You have significant fuel savings along with cheaper maintenance that offset the higher price.

After five years, you save $1,319, or $263 a year, by buying the hybrid.

2024 Toyota Corolla Hybrid

The story is interesting with the Corolla.

Over five years, you’ll save with the hybrid, but only $634, or $127 per year.

Car Model Price Annual Fuel Costs Annual Insurance Costs Annual Repair & Maintenance Costs Five Year Ownership Cost
Corolla SE $24,490 $1,723 $807 $884 $41,561
Corolla Hybrid SE $25,940 $1,246 $842 $909 $40,927
To get 5-year cost to own, multiple annual fuel, insurance, and maintenance by 5 and add price.

The biggest reasons for this is the higher price and repair and maintenance costs on the hybrid version, offsetting the annual savings on gas.

Toyota Highlander Hybrid

The Highlander Hybrid is a wise choice, mainly because of the gas savings.

Over five years, you save $1,488, or $297 annually.

Car Model Price Annual Fuel Costs Annual Insurance Costs Annual Repair & Maintenance Costs Five Year Ownership Cost
Highlander XLE $42,420 $2,442 $760 $1,244 $64,654
Highlander XLE Hybrid $44,120 $1,676 $861 $1,272 $63,166
To get 5-year cost to own, multiple annual fuel, insurance, and maintenance by 5 and add price.

Insurance and maintenance are higher with the hybrid version, but the savings from better gas mileage are enough to offset this and the higher price.

2024 Ford Maverick Hybrid

There are few options for truck lovers when it comes to hybrids.

A popular model, the Ford Maverick, is a small truck that, over five years, costs as much as the hybrid.

Car Model Price Annual Fuel Costs Annual Insurance Costs Annual Repair & Maintenance Costs Five Year Ownership Cost
Maverick XLT $26,315 $1,531 $849 $1,069 $43,560
Maverick XLT Hybrid $27,815 $1,216 $860 $1,086 $43,624
To get 5-year cost to own, multiple annual fuel, insurance, and maintenance by 5 and add price.

The biggest issue is that the higher buying cost offsets the reduced fuel costs.

2024 Kia Sportage Hybrid

Here is an example of a hybrid gone wrong.

Buying the hybrid costs you more money than the gas engine model.

Car Model Price Annual Fuel Costs Annual Insurance Costs Annual Repair & Maintenance Costs Five Year Ownership Cost
Sportage SX Prestige $34,690 $2,305 $846 $1,340 $57,146
Sportage SX Prestige Hybrid $37,190 $1,666 $964 $1,385 $57,264
To get 5-year cost to own, multiple annual fuel, insurance, and maintenance by 5 and add price.

After five years, you pay an extra $118 to own the hybrid.

There simply isn’t enough gas savings to overcome the higher price and insurance costs.

2024 Lexus NX 350h Hybrid

If you are into luxury SUVs, you cannot beat the Lexus NX 350h hybrid.

With close to an identical price to buy, it’s an easy way to save money.

Over five years, the massive fuel savings add up, allowing you to pocket $7,208 total, or $1,441 annually.

Car Model Price Annual Fuel Costs Annual Insurance Costs Annual Repair & Maintenance Costs Five Year Ownership Cost
NX350 $44,365 $2,778 $882 $2,120 $73,264
NX 350h Hybrid $44,615 $1,782 $897 $1,609 $66,056
To get 5-year cost to own, multiple annual fuel, insurance, and maintenance by 5 and add price.

Adding Up the Results

After looking at the various vehicles, you save by opting for a hybrid.

But the savings is less than many people assume.

You must often keep the vehicle for at least five years, if not longer, to realize savings.

To increase your odds of saving when buying a hybrid, you need to do three things that are 100% in your control:

  • Get the purchase price as low as possible. You need to find a great deal or negotiate the price of the hybrid as much as you can.
  • Shop around for insurance. Don’t stick with your insurer due to loyalty. Compare quotes and get the best rate with the best service.
  • Find a mechanic. If you can find a reliable, independent mechanic, you can reduce the cost of repairs and maintenance. You should also take the time to learn how to care for your vehicle to keep it running forever.

The lower you get these costs, the faster you realize savings, and the more you’ll save.

Here are two tools I recommend to help you out.

The first is Edmunds.

Using this service helps you see the price others are paying for the same model and configuration to avoid overpaying.

The second is Insurify.

They’ll give you free insurance quotes from multiple companies at once.

No more making numerous calls and spending hours of your time.

Fifteen minutes, and you have a handful of quotes to compare.

They even make switching effortless!

Plug-In Hybrid Vehicles

Plug In Electric Car

We must also consider plug-in hybrids (PHEVs) when discussing hybrid cars. (Note: this article won’t debate fully electric vehicles.)

While most of the data I shared above is valid with a plug-in hybrid, you must consider electricity and how that affects your savings.

Buying a hybrid electric car is usually an intelligent financial choice for two reasons.

First, there’s a federal tax credit of up to $7,500.

This credit can often make the price between a plug-in hybrid and a gas-powered car identical.

For example, let’s look at the Toyota RAV4.

The internal combustion model starts at $36,980, and the plug-in version is $47,560.

When you apply the $7,500 credit to the electric car, the price drops to $40,060, but still nearly $3,000 more.

This purchase premium wipes out any gas savings, making it more expensive to own.

Is Buying a Toyota Prius a Smart Investment?

The Toyota Prius was the car that started the hybrid craze back in 1997. 

I didn’t include this vehicle in my analysis above as I was comparing the same make and model gas vs. hybrid.

Since the Prius doesn’t have a gas-only version, I couldn’t include it there.

But here’s the latest information on the 2024 Toyota Prius.

It’s not a smart investment.

Let’s look at the numbers.

Below, I compare the 2024 Toyota Prius XLE to the Toyota Corolla XLE Hybrid and the Honda Civic EX.

I used these cars as they’re of similar size and features.

I had to use the gas version of the Civic since Honda doesn’t have a hybrid version.

Car Model Price Annual Fuel Costs Annual Insurance Costs Annual Repair & Maintenance Costs Five Year Ownership Cost
Prius XLE $31,395 $1,125 $793 $1,121 $46,588
Corolla XLE Hybrid $25,940 $1,336 $842 $912 $41,387
Civic EX $28,650 $1,676 $854 $782 $45,211
To get 5-year cost to own, multiple annual fuel, insurance, and maintenance by 5 and add price.

While the Prius costs the least in terms of gas, it has higher maintenance costs than the Corolla and the Civic.

It also costs more, offsetting the gas savings.

As a result, after five years, the Corolla is over $5,000 less expensive to own than the Prius.

Even the gas-only Civic is less expensive than the Prius.

Hybrid Break-Even Calculator

I provided you with the analysis of many popular hybrid models, but you might want to analyze another model.

If so, how do you do it?

For starters, you get the price of the model you’re looking at.

Pick the trim level and configure the car exactly as you want.

In my analysis, I looked at the same trim level with no additional options to keep everything fair.

While configuring your vehicle, note its combined mpg rating; you’ll need this information shortly.

Once you have the purchase price, consider any incentives the dealer or manufacturer offers.

If you qualify for any, use them to reduce the price.

Next, it’s time to estimate the cost of gas.

I used the national average at the time of this writing.

Depending on where you live, this number could be higher or lower.

Now, estimate how many miles you drive your car in a year.

Most people fall between 12,000 and 15,000 miles.

It’s time for some basic math.

Multiply the miles you drive by the cost of gas, then divide this number by the MPG.

If you estimate 15,000 driven, $4 gas, and an MPG of 30 for the gas version, your math looks like this:

15,000 x 4 = 60,000
60,000 / 30 = $2,000

Do the same thing for the hybrid to get your annual fuel cost.

Next, call your insurance agent and get quotes on the models you’re comparing.

Finally, look online for average maintenance costs.

As I mentioned before, I like Edmunds.

The final step is to take the price and the annual cost of gas, insurance, and maintenance to get a one-year total.

This total is your first year of ownership cost.

To compare additional years, you want to take the cost of gas, insurance, and maintenance and multiply them by the year.

For a five-year estimate, multiply these numbers by 5.

Do this for as long as you plan to keep the vehicle to see if buying a hybrid will save you money.

If your analysis points you toward the direction of the gasoline-powered car, read my article on how to save money on gas easily.

Advantages and Disadvantages of Hybrid Vehicles

Here’s a summary of the important pros and cons of hybrid cars.


  • Gas savings: Hybrids offer increased fuel efficiency, saving owners on the cost of fuel.
  • Eco-friendly: Hybrids are cleaner for the environment as they produce less CO2 emissions.
  • Many hybrid models: Almost every car manufacturer offers hybrid versions of cars and SUVs.


  • Higher price: Most hybrids cost more, which offsets any savings from higher fuel economy.
  • Worse than advertised fuel efficiency: With cold temperatures, the fuel economy of a hybrid is much lower than advertised, meaning you save less money.
  • Limited options: While many hybrid vehicles exist, there are not as many hybrid truck options.
  • Less cargo space: Many vehicles have less storage room because of the hybrid batteries.

Best Hybrid Cars

If you want to save the most money with a hybrid car, here are the best choices:

  • Toyota Camry Hybrid (family sedan)
  • Toyota Corolla Hybrid (compact sedan)

The five-year cost to own the Camry is $1,319 cheaper than the gas engine model.

For the Corolla, the five-year cost to own is $188 cheaper.

Sadly, most of the other models don’t save you as much.

And, as seen above, the Corolla offers more savings than the Prius.

Best Hybrid SUVs

Here’s a list of hybrid SUVs that will help you reduce your overall fuel costs, saving you money.

  • Lexus NX 350h Hybrid
  • Honda CR-V Hybrid
  • Toyota Highlander Hybrid

Hands down, the Lexus is the best value for your money, costing you $7,208 less to own over five years.

The Highlander costs $2,484 less over five years, and the CR-V $1,540 less.

Why You Shouldn’t Trust Other ‘Best Hybrid’ Lists

If you visit any popular auto site or magazine, their ‘best of’ list will look very different from mine.

This doesn’t mean they’re right and I’m wrong or vice versa.

The varying results are due to looking at different things.

Auto sites look at the gas mileage, ride quality, and extra amenities and compute these factors to determine if a vehicle is a good value.

I consider whether the vehicle will lower out-of-pocket costs and save you money.

You can have the most comfortable ride with all the bells and whistles, but none of this matters if your goal is to lower costs.

Or it doesn’t matter as much as savings.

Frequently Asked Questions

frequently asked questions

What kinds of hybrid cars are there?

Most people lump hybrids into one single category.

But the reality is that four different types of hybrid vehicles are for sale.

Here are the different kinds you will come across.

  • Parallel Hybrids: This is the most common type of hybrid. Regular hybrids use a combination of an electric motor and a gasoline engine to move the vehicle.
  • Mild Hybrid Cars: These are also called micro-hybrid and light hybrid. These cars have a battery to give a boost to the gas engine as well as improve fuel efficiency. Many vehicles today are sold in this configuration but offer little savings.
  • Plug-In Hybrids: Called PHEV cars for short, these are a combination of electric vehicles and a hybrid. You must plug these vehicles into an electrical outlet to charge the electric motors. Some of these also have a gasoline engine to increase the range on longer drives.
  • Series Hybrids: Also known as Range Extended Hybrids, these cars are powered by a battery pack and use gasoline to recharge the battery so the driver can continue to drive. You must plug these vehicles in as well.

Are hybrid cars reliable long-term?

Yes, hybrids are reliable.

Hybrids are just as reliable as conventional cars.

While there’s a myth that the hybrid battery will eventually die and leave you stranded, this is rare.

Most car manufacturers offer a warranty on the battery that’s longer than the warranty on the gas engine and related powertrain.

Some manufacturers even warranty the hybrid battery for life.

Do hybrids get worse gas mileage in cold weather?

Yes. With a hybrid, you won’t get the advertised miles per gallon when the temperature drops below 35 degrees.

When the outside temperature is lower than this, you can expect a drop between 30-35%.

So, if you get 49 miles per gallon in warmer weather, you can expect 32 miles per gallon in frigid weather.

This is still decent fuel consumption but far from what many hybrid buyers expect.

To be fair, combustion engine cars also experience worse mileage, but the impact is less, with only a 10-15% drop.

Do hybrids actually save you money?

Hybrid cars can lower the amount you spend on a car.

But you can’t simply look at fuel savings.

You need to account for all the other costs of owning a car to ensure you’re spending less overall.

Does it make sense to buy a used hybrid?

Buying used hybrid cars can make sense.

When you buy used, you pay much less as the car has already taken the initial depreciation hit.

However, you do want to understand the warranty the car has.

Is there a warranty on the hybrid system? If so, is it transferable to a new owner?

Be sure to have a mechanic look over and test the battery pack since this can be an expensive repair.

Are hybrid cars more expensive?

Overall, most hybrids cost more than the gas-only counterparts.

The reason for the higher price is due to the advanced hybrid technology these cars use.

However, while prices generally are higher, there are exceptions.

Shopping at the end of a model year could earn you a significant discount, as well as paying attention.

From time to time, car manufacturers will offer cashback and other discounts that could make the cost more competitive with the their gas counterparts.

Is a Hybrid Vehicle Right For You?

Most people want to know, should I buy a hybrid car, or is a hybrid worth it?

Unfortunately, it’s not a yes or no answer.

As hybrid technology improves, so will the costs and savings.

I’ve been updating this article annually as new car models come out, and I’ve found that with the new model, the same car from a year ago that wasn’t a smart purchase is now.

At the same time, the non-hybrid versions are seeing improved fuel economy, making the price gap a little smaller.

Finally, when considering a hybrid car, it’s critical to consider your driving habits and gas prices, as these directly impact how much you may or may not save.

Unfortunately, buying a hybrid doesn’t guarantee you’ll save money.

The only way to know is to do that math to see if it makes sense.

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