Hybrid Payback Calculator

New car season is about to get into full gear and we can expect some interesting models on tap for 2010. If you’re thinking about buying a hybrid, many shoppers debate if paying the extra money for the hybrid is worth it. Typically that “hybrid premium” needs to be balanced against the cost of gasoline during the time you own your car. When gas averaged over $4 a gallon, the decision was much easier; however, with gas around $2.60 we could go either way.

Our handy Hybrid Car Savings Calculator does the heavy lifting for you. (See attached file)

The calculator will determine how long it will take you to break even from paying the “hybrid premium” and saving money on fuel efficiency.

How does it work?

1. Enter the cost of the hybrid car and normal car

Try to evaluate cars that have similar options so that the only difference is the hybrid engine. That way you’ll be estimating the true cost of the hybrid premium. Check out Kelley Blue Book to find ideas.

2. Enter the fuel efficiency of the cars you wish to compare

If you don’t know the fuel efficiency of your car, you can find out estimates at

3. Enter the price of a gallon of gas

You can find the current local average at

4. Enter the estimated number of miles you drive per month


As an example, I entered in some data in the light blue sections to show how the calculator works. In this example, the difference between my hybrid car and normal car is $2,000. My hybrid car averages 46 mpg whereas my normal car averages 20 mpg. I’m estimating that gas costs $2.50 and I drive 1,500 miles per month.

Based on my driving habits, I can expect to save approximately $106 a month in fuel costs. However, to break even on my fuel cost savings and the extra money I had to pay up front for my hybrid, I will have to wait about 19 months to recoup my hybrid premium.

What happens if gas returns to $4 a gallon though? I’ll save a whopping $169.57 a month in fuel costs and I’ll recover my hybrid premium in only a year!

Auto manufacturers are also vastly improving the fuel efficiency of regular combustible engines too. What happens when the fuel economy on my normal car improves to 30 mpg and the price of gas increases to $3.00 a gallon? I’ll save $52.17 a month; however it will take 39 months for me to break even on the hybrid premium.

Try out the calculator yourself and determine if a hybrid is the best choice for you.