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With the current cost of gas at around $3 and falling, driving has become slightly more affordable than it was a few months ago, when gas was $4 a gallon. The price decrease also takes away some of the incentive consumers have to turn to more fuel-efficient cars. AIER’s new Comparative Fuel Efficiency Calculator shows the influence of the $1 fall in gas prices. Consider a high-priced gas-guzzler such as the 2008 Dodge Durango ($44,540), at 17 miles per gallon on the highway, and a hybrid such as the 2008 Toyota Prius ($24,270), which gets 45 mpg.
When gas was $4 a gallon, a person driving 12,000 miles annually (the national average) could have saved over $1,750 by driving the Prius, instead of the Durango. For people with longer commutes, say 24,000 miles a year, the savings would jump to about $3,500 a year. With gas around $3 a gallon, the savings from driving the fuel-efficient hybrid falls to about $1,300 for someone driving 12,000 miles a year. At 24,000 miles a year, the savings would fall to about $2,600. You don’t have to own a hybrid to save on gas. The 2008 Honda Fit ($15,350), at 34 mpg highway is the most fuel-efficient non-hybrid on the market and is one of the chief competitors for the Prius. Environmental considerations aside, even at $4 a gallon for gas, the 11 mpg improvement in mileage translates into an annual saving of only $345 a year for the Prius, assuming 12,000 miles of driving a year.
This small saving looks insignificant when compared to the initial price difference. The Prius is about $9,000 more than the Fit. In general, that sum represents the add-on to a hybrid’s price for the cost of the battery. So if you have an old car that gets terrible mileage, it may make sense to upgrade, even as gas prices go down. But it your newer car is not giving you much trouble, fuel efficiency alone becomes less compelling as a reason to make a change, now that gas prices are subsiding. This is probably why over the past 35 years, not much improvement has been made in the fuel efficiency of U.S.-made cars. When gas prices go up, fuel efficiency is all the rage. When prices go back down, the crusade loses its momentum. You can compare your own car with a new car by using AIER's Comparative Fuel Efficiency Calculator.
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You are correct that Colorado's additional tax credit can help make up some of the cost differential. Additionally, the Prius has a lower emissions rating and additional features, like a backup camera, that the Fit does not have.
However, the Federal tax deduction is no longer available for the Prius. Once Toyota sold 60,000 Priuses, the deduction was gradually reduced until it reached 0% in late 2007. For more information, please follow this link:
http://www.toyota.com/prius-hybrid/tax.html