“Green” Tech Often Not Cost Effective

Many of the "green" models on the market today won't save enough in fuel costs to pay for their higher purchase price within the average six years of ownership, says The New York Times.

The payback periods range from 13 months for a Volkswagen Jetta diesel sedan to nearly 27 years for the Chevrolet Volt extended-range hybrid or Ford Fiesta SFE (Super Fuel Economy) small sedan, according to an analysis of 18 eco-vehicles conducted for the newspaper by TrueCar.com, an online auto research service.

TrueCar's estimates assume vehicles are driven 15,000 miles per year and that gasoline and diesel fuel cost $3.85 and $4.14 per gallon, respectively. In most cases, its comparisons are between conventional and green variants of the same model.

The analysis shows the cost of green technology is the main hurdle to a short payback unless the system also generates a big improvement in fuel economy.

Thus Ford's MKZ hybrid quickly offsets its $1,400 premium over a standard MKZ by delivering 75% better fuel economy. But the company's Fiesta SFE, which costs about $610 more than a regular Fiesta, would take more than two decades to pay off that premium because it improves fuel economy less than 2%.

Half the green vehicles analyzed by TrueCar would take at least eight years to offset their higher price. Many models would recoup their higher price within six years only if gasoline approached $8 per gallon, the Times notes. It also points out that many consumers buy green vehicles for the sake of the environment rather than their own pocketbook.