Facebook     LinkedIn     Twitter     Google Plus     Jobs     RSS

Business Fleet - Current Articles

January 2013, Business Fleet - Feature

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?

by - Also by this author

SHARING TOOLS        | Print Subscribe

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.

Your Comment

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

E-NEWSLETTER

Authoritative & Targeted! We offer e-newsletters that deliver targeted news and information for the entire fleet industry. Subscribe to one or all of them...they're FREE. SUBSCRIBE!

View the latest eNews DRIVING FORCE

ARTICLE ARCHIVE SEARCH

Popular Tags:

Fleet Job Finder


Save time and money. Search for fleet jobs. Advance your career. Access our career coaching services

Job Seekers

  Post your resume & manage your job search.

Employers

  Post jobs & search top quality resumes.

Featured Jobs

BLOG

Driving Notes

Mike Antich
2014 Chevrolet Silverado High Country Pickup

By Mike Antich
While the 2014 Chevrolet Silverado Silverado High Country will definitely appeal to the horse trailering equestrian enthusiast, the truck also has a place in the commercial fleet market, especially for tradesmen, contractors, and foremen, whose vehicles are their mobile offices used in non-severe duty applications.

2014 Ford Transit Connect Cargo Van

By Paul Clinton
This Transit Connect offers a smooth ride with agile handling and a fuel economy rating that has been significantly improved from 2010 with an EPA-rated 30 mpg highway, 22 mpg city, and 25 mpg combined for the model we tested.

2015 Chevrolet Suburban Large SUV

By Stephane Babcock

2015 Ford F-150 Pickup

By Mike Antich

Market Trends

Mike Antich
10 Factors Driving Commercial Fleet Vehicle Acquisitions

By Mike Antich
The majority of companies place new model-year orders according to set vehicle replacement parameters; however, projected improvements in economic conditions across almost all business segments bode well for 2015- and 2016-MY commercial fleet sales.

15 Factors Putting Downward Pressure on Fleet Operating Costs

By Mike Antich
For the second consecutive year, total fleet operating costs have remained flat for commercial fleets when compared to the prior year. This blog identifies the 15 factors that are putting downward pressure on fleet operating costs.

The State of the Fleet Sustainability Market

By Mike Antich

Forecast of Operating Costs for Class 3-6 Trucks in Calendar-Year 2015

By Mike Antich

Auto Focus

Chris Brown
Managing the Social Media Rant

By Chris Brown
How do you handle customer service when those Really Angry Customers now have a much bigger megaphone?

The Shape of ACE to Come

By Chris Brown
In an exclusive interview, Dick Radzis and Charlie Mullen talk about the sale of their corporate locations to Avis Budget Group, discuss the company’s plans for the ACE Rent A Car brand and more.

Have the Workplace Violence Conversation Now

By Chris Brown

7 New Media Marketing Strategies from Silvercar

By Chris Brown

STORE

$5.00

Business Fleet - January/February 2014

In This Issue:
Here are some of the Highlights:

  • Got Compliance
  • Vehicle Valuation 101
  • Cabovers Gain Popularity in Medium-Duty Truck Fleets
    And much more…