Will Anyone Buy Hybrids Now?
Last summer when gas was approaching $5 a gallon, fuel-efficient vehicles were all the rage. Dealerships were so desperate to sell their vehicles that they offered “price locks” on fuel of $2.99 a gallon, which at the time seemed like a steal. “Smart” cars, the car that almost has a higher miles-per-gallon rating than it does horsepower, were all the rage. People thought that spending $15,000 on these glorified mopeds was a sensible solution to the wallet-crippling fuel prices.
As people have a way of doing, they overreacted big time.
Gas is now at or under $2 a gallon in most parts of the country. Those who leased or bought hybrids or other vehicles that sacrifice power for fuel efficiency are feeling mighty foolish right now. The pendulum has swung back the other way in full force. Now the question that is left to ask is: will anyone buy hybrids now?
GM is sure praying they do. In addition to all of their other problems, one of their biggest projects, the electrically-charged Volt, is slated to be released sometime in the next 18 months. People are already reluctant to buy a car that requires being plugged into the wall as it is. With gas at $2 a gallon, GM might as well not even bother trying to market the Volt.
On average, vehicles with a hybrid engine cost about $4,000 more than their gas-only counterparts. For someone who drives a lot, it was conceivable to recoup this savings (and then some) when gas was at $4/gallon and climbing. Now it is almost impossible to justify the purchase of a hybrid over a standard engine. The savings at the pump from doing so is almost negligible when you account for the sacrifice in power.
However, much in the same way that it was sensible for those who wanted a Hummer to purchase one last summer (when dealers were slashing prices like crazy to get the gas-guzzlers off their lots), the perfect buying time for Hybrid vehicles could be now! It’s a safe bet that, eventually, gas prices will come back up. It might not happen in the next couple of months, but odds are that in a year or two, we’ll be faced with gas price concerns all over again. This is especially true now that Obama is about to take office. While his opponent in the general election was calling for offshore drilling to help ease prices, Obama’s focus has never been on working to keep prices low. He is more interested in developing alternative energy sources.
They say “when it rains, it pours.” This could especially be the case for increasing gas prices that will inevitably happen at some point in Obama’s administration.
A truly viable alternative energy source is still a decade away, at least. When the economy recovers and people start traveling more than ever before, you can bet gas prices will increase. Now could be the perfect time for those interested in owning a hybrid to make their move. Just because it seems counter-intuitive doesn’t mean it’s a mistake. Ask the three people savvy enough to have purchased a Hummer at a basement bargain discount six months ago.
