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Ownership costs of traditional versus alternative fuel vehicles

Mon, 04 Feb 2013

As gas prices remain high, and an increasing number of automakers roll out plug-in hybrid cars and full-electric vehicles, it's becoming easier to be tantalized with the idea of driving right past the gas station and simply "plugging in."

The debate ensues when it comes to cost: These alternative fuel vehicles mean a larger outlay of cash at the onset, but the long-term fuel savings could make the purchase worthwhile.

To help straighten out this numbers game, we use the Department of Energy's Vehicle Cost Calculator to compare alternative fuel vehicles with their gasoline-only counterparts.

For each scenario, we assumed that our hypothetical owner was able to get the full $7,500 federal tax credit and a $2,500 state tax credit, such as is available in California. We also selected a California zip code for our electricity calculations, where electricity costs are relatively high, and we chose a gas price of $3.82, the average in the state at this time. Finally, we left the DOE's default mileage calculations in place -- about 12,000 miles annually, with about 60 percent highway miles. The calculator factors in all ownership costs, including a five-year car loan that assumes a 10-percent down payment.

Here's what we found:

2013 Nissan Leaf v. 2013 Toyota Camry and Matrix

2013 Nissan Leaf S: $18,800 after full $10,000 in tax credits; 99 mpg-e combined (using 2012 data)

2013 Toyota Camry: $22,235; 28 mpg combined

2013 Toyota Matrix with the automatic transmission : $20,070; 28 mpg combined

Nissan recently added a new low-cost S trim level to the Leaf that drops the price by more than $6,000 from the cheapest 2012 model to $28,800 (destination charges haven't been released for 2013, but were $850 for 2012). With this change, the Leaf has a lower cost of ownership from the start, plus for the first five years of ownership the Camry and Matrix will cost more in gasoline. In terms of operating costs, the Leaf came in at 23 cents per mile, while the Camry was at 32 cents and the Matrix at 36 cents per mile.

2013 Chevrolet Volt v. 2013 Honda Accord

2013 Chevrolet Volt: $29,995 after the full $10,000 in tax credits; 98 mpg-e combined

2013 Honda Accord EX sedan with CVT : $26,195; 30 mpg combined

The second comparison was the 2013 Chevrolet Volt plug-in hybrid with a 2013 Honda Accord EX sedan with continuously-variable transmission. In this scenario, the Volt costs 25 cents per mile, while the Accord logs in at 33 cents per mile. Overall costs are essentially equal for the first three years of ownership, and then the Volt becomes slightly cheaper to own through year five. After 10 years of ownership, the difference in overall costs is about $5,000 less for the Volt.

2012 Toyota RAV4 EV v. Honda CR-V

2012 Toyota RAV4 EV: ($39,800 after the full $10,000 in tax credits; 76 mpg-e combined

2013 Honda CR-V EX-L 2WD with navigation and automatic transmission : $29,875; 26 mpg combined

The third pair was the 2012 Toyota RAV4 EV and the two-wheel-drive 2013 Honda CR-V EX-L with navigation and automatic transmission. In this scenario, the Honda CR-V is cheaper basically during the entire cost of ownership, with it only matching the costs of the RAV4 EV at about year 14 of ownership. Part of the cost difference is that the RAV4 EV costs 33 cents per mile versus 29 cents on the CR-V, primarily because of the large battery that provides a 100-plus mile driving range. In addition, costs are due to the very large price premium for the RAV4 EV, compared to the top-of-the-line CR-V, even with the hefty tax credit factored in to the RAV4 EV's price.

What did we learn? Electric cars can be a wise financial choice with certain vehicles -- especially if you can take full advantage of the federal and state tax credits and if you drive at least an average number of miles per year. As with any new-car purchase, it's wise to calculate the actual costs for your individual situation, since your picture could vary widely from the hypothetical buyer used here.

By Tara Baukus Mello