A lot of people are interested in the next generation of automobiles, but aren’t sure whether it makes sense financially to go out and buy one.
The answer depends on why you’re in the market for a hybrid car.
If you want one because you care about the environment and you’re convinced that your owning a hybrid is a good thing for the planet, then it’s only a question of whether you can afford the payments.
If you are shopping for a hybrid because you want to save on gasoline costs, then you probably shouldn’t be in the market for a hybrid. Financially, it’s much more expensive to buy a hybrid than to swap your car for a more fuel-efficient traditional vehicle. Even with gas prices staying relatively high, hybrid cars aren’t a good purchase if you’re purely motivated by financial considerations.
Of course, financial considerations aren’t everything. You may feel that your participation in the “green” culture and thoughtful stewardship of the planet are more important than money. And so you might be justified in paying more for a hybrid vehicle. Just be aware that driving according to your values is going to be expensive.
There’s no reason you shouldn’t have the kind of car you want for whatever reason you want–so long as you can afford it. If it’s really important to you to get a car that uses fossil fuels more efficiently, then you just have to be prepared to make sacrifices for it.
You’ll want to start by creating a budget. Take an inventory of all your monthly expenses, and prioritize them. Your new, more expensive car payment may be a high priority, up there with your rent or house payment. Of course utilities and food expenses should rank high as well.
After that, there will be things that may not be as important to you; entertainment spending, magazine subscriptions, cable TV, etc. These are things that might have to be done away with if you’re going to make room in your budget for an expensive new hybrid vehicle.
For more detailed information on budgeting, check out credit.org’s “Power of Paycheck Planning” materials, available free via our web site.
You may find, after spending some time working on your budget, that there are better ways to be environmentally conscious that don’t force you to live under a strict budget or get you deep into debt. One way or another, you shouldn’t make big financial decisions like this one without spending some time examining your budget.
Like we said, there’s no reason you can’t have the kind of car you want if it’s important to you; just make sure you can fit it into your budget. But if you think buying a hybrid will actually save you money in the long run, unfortunately that’s not the case. Perhaps over time the technology will improve to the point that the gas savings a hybrid bri