Will buying a hybrid really pay off?

Hybrid Incentives
Tax incentives can help offset the cost of buying a hybrid like the Honda Insight shown here.
Tax incentives can help offset the cost of buying a hybrid like the Honda Insight shown here.
Kristen Hall-Geisler

Using less gasoline and emitting fewer pollutants is good for the environment, but the technology that makes it possible is pretty expensive. The U.S. government wants to help ease the damage to your pocketbook when you're considering buying a more fuel-efficient vehicle. Federal and state agencies offer incentives (beyond helping the environment) that can help.

The most obvious way to cut that initial cost is through tax incentives. The U.S. federal government offers tax credits of up to about $3,000, depending on the vehicle and date of purchase. The program was designed to spark interest in the new gas-sipping technology, so as the vehicles become more popular, the credits will be phased out.

A number of individual states offer their own incentives in addition to the federal credits. The state of Oregon, for example, offers credits of its own totaling up to $1,500 for certain vehicles. California provides a rebate of up to $5,000 for the purchase of a hybrid. Other states, including Georgia, offer non-monetary incentives like free use of high-occupancy vehicle (HOV) lanes, regardless of the number of passengers in the vehicle.

The fuel economy of hybrid vehicles offers significant savings as well, especially when gasoline prices are high, as they were in the summer of 2008. Some repair issues are also minimized: regenerative braking, for instance, reduces the wear on the brake pads, since the regenerative system slows the car before the pads ever touch the rotors. Rather than replacing a vehicle's brake pads every 10,000 miles (16,093 kilometers), owners can replace them at, say, 50,000-mile (80,467 kilometer)intervals.

All of these incentives, along with all that clean air, are great, but what are the drawbacks to owning a hybrid vehicle? Read on to get the (somewhat) bad news.