Alt-fuel vehicles don’t necessarily have to break the bank
A common hesitancy consumers might have about buying alternative-fuel vehicles (even used ones) is that the cost is too high. And that assumption isn’t entirely wrong — it might be fair on some models, particularly electrics.
However, there are deals to be had in the used-car market for alternative-fuel vehicles — even beyond government rebates — that could help dealers overcome those shopper objections. In fact, used hybrids may be a better deal than gas vehicles in terms of average overall cost-effectiveness.
In a study, iSeeCars.com examined data from more than 1.3 million transactions of 3-year-old used vehicles between November 2022 to April 2023 and determined average cost per 1,000 miles per year for various segments and models.
What iSeeCars found was that the price per 1,000 miles per year for 3-year-old hybrids ($3,056) was 2.1% lower than that of gas cars ($3,123).
Electrics ($5,108) and plug-in hybrids ($4,351), though, were much more expensive than gas vehicles: 63.6% and 39.4%, respectively.
“Everyone knows electric vehicles cost more than gasoline, hybrid, and plug-in hybrid models,” iSeeCars executive analyst Karl Brauer said in the analysis. “But when we combined their list price with the low use rate for EVs and compared those figures to other vehicle types, we were able to quantify exactly how much more electric vehicle buyers are paying, only to drive them less.”
Gas cars were driven an average 12,813 miles per year, while EVs were driven 20% less at 10,256 miles per year, according to iSeeCars. Plug-ins were driven 4.8% less than gas vehicles (12,199) and hybrids were driven 12,471 miles, just 2.7% less.
The latter is the more cost-effective option, iSeeCars said, given that “hybrid owners use their cars at almost the same rate as gasoline cars, while their average price is slightly lower than gasoline models,” the company said.
“Hybrids have become increasingly popular with consumers in recent years,” said Brauer. “And now many mainstream models, including the newest Toyota Camry, are only sold as a hybrid. This technology is set to become the dominant drivetrain throughout the industry.”
And perhaps the most affordable alt-fuel choice.
iSeeCars listed the 15 least expensive 3-year-old alt-fuel vehicles based on price per 1,000 miles per year. Thirteen of those vehicles are hybrids and two are plug-in hybrids.
“The price increase between hybrids and traditional gasoline models keeps dropping, making hybrids an increasingly desirable option for consumers looking to keep both purchase price and operating costs low without altering their driving habits or facing range anxiety,” said Brauer.
Turning to the new-car side of alt-fuel vehicles, the Costco Auto Program announced that it offering Costo members incentives on new hybrids and EVs from Volvo, Chevrolet, Cadillac and Polestar — this marks the first time it has offered such incentives on all four brands at the same time.
More information on the deals, which began Wednesday and run through July 31, can be found here.
“Costco Auto Program recognizes that for many car owners, vehicles are an extension of their own personality and style,” Costco Auto Program general manager Jay Maxwell said in a release. “Keeping this in mind, we are happy to offer savings on vehicles from four different manufacturers to help Costco members step in to the hybrid or electric vehicle that best fits their lifestyle.”