Serves the Commercial Small Fleet Market of 10 – 50 Vehicles

The Hybrid Payback for Fleets: A New Class of Vehicles

There are more hybrid models than ever before, but is the gap shrinking on return on investment for fleets?

January 2013, by - Also by this author

Since the advent of hybrids in America at the turn of the last decade, car buyers have been calculating the hybrid equation and asking the question, “Are they worth the premium?”

The answer is a constantly moving target, based on factors such as wildly fluctuating fuel prices, the introduction of cheaper hybrids and luxury ones, the expiration of government rebates and tax credits, and improvements in fuel economy in the good old internal combustion engine.

And so we circle back around with the lifecycle cost experts at Vincentric for an updated analysis to answer the question today. Vincentric has provided Business Fleet with lifecycle cost analyses since 2005.

Vincentric uses data specific to fleet, including capitalized costs that reflect a fleet acquisition price with fleet incentives. Based on Vincentric’s November 2012 update, this analysis pulls data on 36 models (and 12 trim levels within those models) from the 2012 and 2013 model years.

A look at a majority of those vehicles can be seen here.

Data Averages

First, let’s look at the data in aggregate of hybrid models compared to their traditional internal combustion engine (ICE) counterparts. Understand that making an apples-to-apples comparison of hybrids to ICE models, and comparing the data historically, is not an exact science.

Initial costs for hybrids are still substantially more than ICE models, on average $5,285. However, that figure is shrinking — in an analysis based on October 2011 data, the initial cost average differential was $8,494.

Looking at depreciation in this analysis, the average difference between hybrids and ICE models over five years is $4,308. Hybrids depreciate less quickly; hence some of hybrids’ initial cost premium will be recouped upon resale.

When factoring in fuel economy, in this analysis hybrids save an average of $4,597 in five years over ICE models, further shrinking the overall cost differential.

When factoring in total cost, however, hybrids still end up costing more than ICE vehicles — by an average of $1,582. This gap is slightly more than the gap in the October 2011 analysis, noting again the many factors affecting this differential.

Average Costs: Hybrids Vs. ICE Models
(After five years and 100,000 miles)

 Cost of ownershipAdjusted invoiceDepreciationFuel consumption
Hybrid models $72,151 $45,185 $30,615 $14,424
ICE models $70,569 $39,900 $26,307 $19,021
Differential $1,582 $5,285 $4,308 ($4,597)

Eyeing the Models

Looking closely, though, a number of individual hybrid models beat their ICE siblings (or close cousins) in total costs. That list includes the Toyota Avalon, Toyota Camry, Porsche Cayenne SUV, Porsche Panamera sedan, Kia Optima, Acura ILX sedan, Lincoln MKZ, Lexus HS 250h and ES 350 sedans, Lexus RX 450h, Mercedes S400 HV and a few other models.

As in the previous analysis, the Lincoln MKZ hybrid has the best total cost differential of any hybrid in the group, a full $6,402 over its ICE counterpart. The big reason: Lincoln matched pricing for the ICE and hybrid version. The only other model with a lower initial cost than its close cousin is the Mercedes S400 HV.

The other hybrid models with better total costs all start with higher initial costs, but make up the difference in fuel savings and value retention.

Interestingly, two hybrids with no comparable ICE model — the 2012-MY Toyota Prius C Two and 2013-MY Honda Insight — rank first and second in lowest total costs of ownership of any vehicle in this survey. The gas-powered 2012-MY Toyota Yaris is third.

See a larger list of hybrid vehicles compared to their ICE counterparts here.

View all of Business Fleet's January/February magazine articles here.

Twitter Facebook Google+


Please note that comments may be moderated. 
Leave this field empty:

Fleet Incentives

Determine the actual cost of owning and running a vehicle in your fleet. Compare vehicles by class and model.


Market Trends

Mike Antich
Increased Demand and Rail Delays Create Upfitter Logjam in MY-2015

By Mike Antich
One challenge for both the 2015- and 2014-MY has been the increased volume of fleet vehicles going to upfitters, which has resulted in capacity constraints. With the increasing demand and growth of the commercial truck and van segments – particularly among utilities and service industries – the percentage of upfitted vehicles is growing. Upfitters are feeling the pressure of increased demand.

High-Roof Vans Causing OTD Delays

By Mike Antich

View All

Driving Notes

Paul Clinton
2015 Lincoln MKC 2.0L FWD

By Paul Clinton
Lincoln offers the MKC in several configurations. We tested the model powered by the 2.0-liter inline-four EcoBoost engine that delivers its 240 hp via a 6-speed automatic transmission.

2015 Chevrolet Cruze Diesel

By Mike Antich

View All

Nobody Asked Me, But...

Sherb Brown
The Fleet Manager Is Still Here to Stay

By Sherb Brown
Fleet management will always be a critical role in any business or public entity that relies on vehicles regardless of the title of the person making the decisions.

Merger Mania Hits Fleet Market, Again

By Sherb Brown

View All

Auto Focus

Chris Brown
Will VW’s Diesel Scandal Affect Values of Its Gas Models?

By Chris Brown
While brand damage is too often guided by fickle retail perception, fleet buyers and sellers — those who have been around the block in the industry — have a more tempered view of potential impacts.

Should Auto Recalls Be Delineated by Severity?

By Chris Brown

View All


Business Fleet Magazine - September/October 2015

Featured Articles Include: * 14 Ways to Save Fuel * Alt-Fuels: Right Fuel, Right Route * Vehicle Wraps Boost Start-Up Fleet's Business

Up Next

More From The World's Largest Fleet Publisher