My husband and I decided on a hybrid when the lease on our gas-guzzling SUV came up last summer. At the time, we were pumping fuel at $1.40 a litre and economist Jeff Rubin for oil to climb above $200 (U.S.) a barrel. The advantages of a hybrid vehicle seemed clear.
We could nearly double our gas mileage - cutting our monthly gas bill in half - and there were incentives. The Canadian government was offering a $1,500 (Canadian) rebate on a hybrid and the provincial government was giving a PST rebate over the course of the lease term.
The hybrid version of the car model we wanted carried a sticker price that was $5,000 more than the regular model, with a correspondingly higher lease cost per month. But with the government cash back offer, our fuel cost savings, as well as the lower insurance fees, we figured that we'd make up the difference. We estimated a payback time within the life of the lease.
Not only did we feel virtuous for being environmentally friendly, we were making a good financial decision. We weren't the only ones. Across the country, car dealerships had waiting lists for hybrids.
But with June crude oil futures falling to around $60 (U.S.) a barrel, fuel has become more affordable. Our payback time has grown. The waiting lists are gone.
And while we still feel good for going green, we wonder if it made financial sense to go with a hybrid. At today's gas prices, it is hard to justify the upfront premium based on payback alone. Also, the Canadian government incentive programs expired at the end of 2008, extending our payback time frame.
Still, it appears that hybrids may be the best choice of vehicle for the future.
Barack Obama is introducing that will require the auto industry to produce more fuel efficient cars by 2016. And Jeff Rubin is an oil crisis that will change all of our attitudes towards the vehicles we buy. He says his next car is going to be a hybrid.
At least my husband and I are in good company.