It’s often said that plug-in hybrid cars or PHEVs — which have both a gas engine and an electric motor — offer the best of both worlds. You can travel 20-40 miles on electric power alone, which meets the daily commuter needs for many drivers and cuts down significantly on emissions and fuel usage. But you can also rely on the gas engine for trips beyond the car’s electric range, eliminating the need to plan around charging station accessibility or have a second car on standby.
But, are plug-in hybrid cars worth it? You may be wondering if doubling your car’s power sources means doubling the price of ownership, too.
How much is a plug-in hybrid car?
The general rule is that PHEVs typically cost more up front than traditional cars or standard hybrids, but save money over time through reduced fuel and maintenance costs. However, there are many exceptions. It's important to consider how both short- and long-term costs may apply to your individual needs and circumstances.
Specific factors that affect a PHEV’s true cost include:
- Purchase price. Plug-in hybrid cars have a large battery pack and highly sophisticated software and hardware. That has historically led to a higher price tag relative to their conventional and standard-hybrid counterparts (unlike PHEVs, standard hybrids can’t be plugged in or operate on electric power alone). According to the U.S. Department of Energy, you should expect to pay $4,000 to $8,000 more up front for a PHEV than you would for a standard hybrid. However, the gap in sticker prices may be closing. Some EV and PHEV automakers are cutting prices in response to both flattening demand and the Inflation Reduction Act, which requires EVs and PHEVs to cost under $55,000 for sedans and under $80,000 for pickups and SUVs to qualify for federal tax rebates.
- PHEV tax rebates. You can recoup a portion of certain PHEVs’ purchase price — up to $7,500 — through federal rebates if you meet specific requirements. Some states offer incentives as well. View a current list of relevant state laws and be aware of what your state offers when determining a PHEV’s affordability.
- Gas and electricity prices. Electricity is typically cheaper than gas by a wide margin — especially when there’s a surge at the pump. So, if you plan to “go electric” on a regular basis, a plug-in hybrid car is more likely to pay for itself over time. That said, there may be upfront costs to installing a home charging station and the 240-volt outlet it requires (same as what clothes dryers use, but often doesn’t exist near your garage or parking space). Equipment and installation can add about $2,000 to your upfront costs.
- Your driving habits. Plug-in hybrid cars often make the most fiscal sense for people whose daily commute is within the car’s battery range, but who want the flexibility to take longer trips from time to time. According to Consumer Reports, drivers of one popular PHEV model saved $3,000 over six years of ownership relative to the same car's economical but traditional counterpart. But if you end up relying more heavily on the gas-powered engine, those kinds of savings are unlikely.
- Length of ownership. Are you the type to trade in your car for a new model every few years? If so, a PHEV might not be right for you. PHEVs can be economical, but it takes time for the savings gained by using the car’s electrical power to add up. If you sell or trade in the car early, you’ll probably lose money.
- PHEV maintenance. Despite being more complex than traditional cars, plug-in hybrid cars are less expensive to maintain. One study that surveyed hundreds of thousands of drivers over the course of their cars’ lifecycle (defined as reaching 200,000 miles) showed that PHEVs cost, on average, $4,600 to maintain versus $9,200 for traditional cars. That surprisingly big difference is likely because PHEV drivers make good use of the electric motor, which has fewer moving parts and maintenance needs. Plus, going electric for much of the car’s lifecycle reduces wear and tear on the traditional engine, and the electric motor’s regenerative braking means you don’t have to replace the brake pads as frequently.
Deciding whether plug-in hybrid cars are worth it depends on your individual circumstances. Although PHEVs tend to make up for their typically higher purchase price by saving drivers money on fuel and maintenance over time, that isn’t universally true. Be sure to consider other important factors, such as your driving habits, ability to charge the battery at home or nearby (and what it might cost to upgrade your electrical system and/or install a Level 2 charger if you can’t), and your intended length of ownership.
To learn more about EVs, visit www.Chase.com/EV.