Toyota Highlander Hybrid - Only for the Young

I currently drive a “gas guzzling” old fashion Toyota Highlander. Here, in the mountains of northern New Mexico we drive long distances and do relatively little city driving. Not surprising since in the entire state, we only have two cities with a population over 100,000.

My Toyota Highlander gives me 23.4 miles per gallon according to the on-board computer and is rated for 19 mpg city and 25 mpg highway. The new Highlander Hybrid is rated for 33 mpg city and 27 mpg highway. How much improvement in gas mileage can I expect if switched to the new fuel efficient Hybrid? I can interpolate this information to indicate my mileage savings would be 2.1 mpg. Of course, the next question is how many miles must I drive at 5.1 cents mpg savings to pay back the additional $3,000 cost of a new Highlander Hybrid? At $2 per gallon my current Highlander costs 8.5 cents per mile, and the Hybrid would cost 7 cents per mile. This leaves me with a saving of 1.5 cents per mile. If I divide that into the $3000 additional cost, I would have to drive 200,000 miles to break even. Considering I drive about 10,000 miles a year, it would take a little over 20 years to get my payback. This is without factoring in the time value of money.

Herein lies is the strategic dilemma with Hybrids. If you are a city driver you get a potential big savings in gas mileage, up to 15 miles per gallon. However, city drivers don’t drive long distances and therefore don’t have the high fuel usage to justify the investment. If you are a high mileage highway driver you get far less improvement in fuel efficiency and as I have demonstrated, at age 55 and older you are statistically unlikely to recover your investment.