Is Buying a Hybrid Car Worth it in Canada 2022? Cost Breakdown

Hybrid cars have been growing in popularity in recent years, especially as the climate crisis looms and consumers look for ways to lower their environmental footprint. So it leads me to this question, is buying a hybrid car worth it in Canada?

Depending on which model you buy and how much gas costs where you live, it can be worth it to buy a hybrid car in Canada. Most hybrid vehicles indeed have a higher price tag than their combustion engine counterparts.

However, if gas prices are rising where you live, and the initial cost of your hybrid car is comparable to a regular car’s, you can recoup your initial high investment only within a few years. In this case, buying a hybrid car is worth it.

It is also good to note that hybrid cars are becoming more available as technology advances, bringing their price down. On the other hand, gas prices continue to rise and become volatile as society transitions to a cleaner economy.

These two trends mean that hybrid cars are likely to become more and more cost-friendly in the future.

So, if you have the opportunity to make your commute a green one while saving on trips to the gas station, why not?

Is Buying A Hybrid Car Worth It In Canada

Hybrid cars: what are they?

Hybrid cars are the best of both worlds when it comes to powering your vehicle; they combine the technology of a regular car (combustion engine) and an electric vehicle (electric battery). That is, hybrid cars have the option to run on either gasoline or electricity.

Because electricity does not produce any greenhouse gases as it powers your car, it is considered to be a more environmentally friendly option to gas, therefore making hybrid cars a more environmentally friendly choice of getting around.

Types of hybrid cars

Is Buying A Hybrid Car Worth It In Canada - Types of Hybrid Cars

Hybrid cars have more flexibility than a regular car or an electric vehicle that must be plugged in to charge. Not only that, but there is even more flexibility within hybrid vehicles themselves. You have three different engine models to choose from when buying a hybrid vehicle.

1. “Full” hybrids

Is Buying A Hybrid Car Worth It In Canada - Full Hybrid

Full hybrids have both a combustion engine as well as an electric battery engine—the electric battery charges when the combustion engine is running. Therefore the car doesn’t have to be plugged into a charging station.

The machines automatically alternate based on your speed, allowing the battery to get recharged when you are driving on gasoline.

A good example of a full hybrid is the Toyota Prius.

2. ”Mild” hybrids

Is Buying A Hybrid Car Worth It In Canada - Mild Hybrid

Mild hybrids also have two motors, but unlike the full hybrid, they always run in parallel with one another. They do not function separately.

A good example of a mild hybrid is the Honda Accord Hybrid.

3. Plug-in hybrid electric vehicles (PHEV)

Is Buying A Hybrid Car Worth It In Canada - PHEV

These cars have the option of running purely on electric mode and revert to fuel when the battery is empty. Much like fully electric vehicles, these cars must be plugged into a charging station in order to continue running on electric mode.

A good example of a plug-in hybrid is the Mercedes E 350e or the Toyota Prius Plug-In.

Costs of buying a hybrid car in Canada

Many different financial factors can be at play when purchasing a hybrid vehicle. At the end of the day, it really comes down to personal preference, your driving and lifestyle habits, and how much gas costs where you live. Let’s go through the main costs associated with having a hybrid car.

Gas

Gas

Right off the bat, many people are attracted to the idea of making fewer trips to the gas station and spending less money per month on powering their car. This is indeed one of the best features of a hybrid, and you will surely be making monthly savings on gas with a hybrid in comparison to a regular combustion engine car.

But do also consider this: how much does gas cost where you live? In cities like Vancouver, it is even a better deal to buy a hybrid car because gasoline is usually more expensive than it is in the rest of the country.

In addition, keep in mind that the world is moving toward a less fuel-dependent version of itself as the years go on. Various institutions are divesting from fossil fuels in efforts to become net-zero, and many economists predict that the cost of fossil fuels will only continue to rise in the transition to a green economy.

As the price of gas goes up, the more you will save money on gas as a hybrid-owner, and the faster you’ll recoup your initial investment.

Cost of the car

Cost of the car

Speaking of your initial investment, the upfront cost of a hybrid car is usually higher in comparison to regular cars. The degree is highly dependant on which model you buy, but the price difference can be as high as $10,000.

Therefore, make sure you do your research before you purchase a hybrid vehicle.

Figuring out how much you will be driving, how much gas costs where you live, and approximately how long it will take you to make up for the initial high price of the car (in the way of gas savings) will help you decide whether you should buy a specific make. 

Before you take hybrid cars completely off the table due to their high price tag, do note that not all hybrids are crazy expensive in comparison to their combustion engine counterparts.

In the case of Toyota’s Prius, for example, you only have to put up an extra $1000-$2000 to get a hybrid, which you can recoup pretty quickly by saving on gas.

Insurance

Insurance

The differences in insurance costs are negligible between hybrid and regular cars in Canada. Therefore, insurance costs should not be a deciding factor when determining whether hybrids are worth it.

Some case studies do show that hybrid cars have cheaper insurance costs, but this isn’t always the case, so it’s good to have a chat with your dealer beforehand.

Rebates and Incentives

Rebates and Incentives

To offset the initial high investment of hybrids, you can also consider taking advantage of rebates and incentives.

Many Canadian provinces, employers, and car dealers are incentivizing consumers to choose more environmentally friendly options, and I recommend that you take advantage of these when buying a hybrid car. This will allow you to start saving money even quicker.

Maintenance

Maintenance

The maintenance costs of hybrid and combustion cars are somewhat similar, though hybrid cars do tend to come with more extended warranties than their non-hybrid cousins, which is a bonus.

With a hybrid car, it is recommended that you change the hybrid battery pack every 100,000 miles, which would come around in about eight years if you drive the average 12,000 miles per year.

Eight years is a considerable amount of time, however, and the $3,000 battery replacement costs are quite comparable to the maintenance costs of a regular car.

Pros and Cons of buying a hybrid car in Canada

Those were the purely financial points of buying a hybrid car in Canada. But, as you can see, many factors are at play and whether or not it’s financially worth it to buy a hybrid can change based on gas costs and the initial price of the car.

But there are also other things to consider that aren’t necessarily financial. So let’s do a speed round for the general pros and cons of buying a hybrid car in Canada.

Pros
  • Take advantage of EV/hybrid parking spaces in parking lots
  • Take advantage of HOV lanes
  • Fewer trips to the gas station mean you can save on time
  • Less money spent on gas each month
  • Option to rely on fuel if the battery runs out
  • Lowered ecological footprint
  • A quieter drive
Cons
  • Higher upfront cost
  • Potential need to install a charging station at your home (if you buy a Plug-in hybrid electric vehicle (PHEV))
  • Less brand/style/colour options to choose from
  • Plug-in batteries can be heavy and oversized, which could affect the overall performance of the car

What is the best hybrid car to buy in Canada?

In my opinion, the best hybrid car in Canada is the Toyota Corolla Hybrid. Toyota is not new in the hybrid game; their Prius has been around for more than 20 years and was the first-ever commercially produced hybrid on the market.

Their technology is tested and true, and the Corolla has the sleek design that some find missing in the Prius.

This car is excellent in its fuel efficiency and price, which means you will recoup your initial higher investment (about $2,000-$3,000 more than Corolla’s non-hybrid version) even sooner.

Conclusion

A lot can go into deciding whether buying a hybrid car is worth it in Canada. All in all, if you buy a vehicle that is comparable in price to a combustion engine car, you are much more likely to start making considerable savings on gas each month, making it worth it to own a hybrid vehicle.

Why not also lower your ecological footprint while making fewer dreaded trips to the gas station? It’s a win-win.

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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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