Do Green Cars Save You Money? – 2 Minute Finance

Here’s a question for the ages: do alternative
“green” vehicles, like diesel and hybrids car actually save you money? The short answer
is: it depends. Let’s use one of the oldest green vehicles
on the road as an example, the Volkswagen Jetta automatic sedan. VW has offered both
a diesel and regular gas-powered Jetta for a number of years. Comparing the two, the Jetta regular gas model
gets 26 miles per gallon combined while the diesel model gets 34 mpg’s combined. Factoring in AAA’s average gas prices from
December 7, 2011, it costs 12.7 cents a mile to drive a gas Jetta and 11.6 cents a mile
to drive the diesel Jetta. You’re saving 1.1 cents per mile driving the diesel model. It’s a slam-dunk on the savings right? Well
there’s one thing that we didn’t factor in. The diesel model commands a $4,030 premium
over the gas model. Assuming you drive the national average of 13,476 miles a year, it’ll
take you over 27 years to break even by buying the diesel Jetta over the gas model. Now, this number may scare you off, but in
fact, hybrids oftentimes also have the same break-even problem. The moral of the story is this. First, the
payoff for buying a green vehicle can fluctuate wildly based on fuel prices, fuel economy
and price premium. You may think you’re saving money, but the reality may be much different. Before you buy any green vehicle, you should
to run an analysis to calculate your actual cost savings before you buy, just like we
did. So in two minutes, you got smarter about the
actual cost savings of buying a green vehicle. To do this calculation on your own or for
a more detailed analysis on this cost comparison, visit our website at 2 Minute
While you’re there, check out our other 2-minute videos on various personal finance topics. I’m Bobby Lee for 2 Minute Finance, thanks
for watching.

Paul Whisler

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