I found it interesting today that Yahoo! had two articles posted with seemingly conflicting advice.

The first article was posted in their Yahoo! Green site which is focused primarily on the environment and energy efficiency. The article was entitled Rethinking the cost of hybrid cars and was focused on showing how the added up-front expense of purchasing a hybrid vehicle can pay for itself when compared with the cost of a similar, non-hybrid vehicle. The second article, posted on Yahoo! Finance was titled When Buying a Gas Guzzler Makes Sense and focused on convincing people that a gas-guzzling SUV could be the right choice for them.

Just by looking at titles of these articles one would assume that they would be giving advice in opposite directions. But while the one does point the user toward a hybrid, the most fuel efficient car available, and the other points the user toward a big SUV, the least fuel efficient vehicle available, there is a common link between the two articles. The link being that they are both trying to save the reader money, and that your particular driving scenario dictates which purchasing decision will be cheaper overall. The basis of this decision is that hybrid cars will get MUCH better gas mileage than an SUV, but are likely to be more expensive, especially now that SUV prices are plummeting in response to high gas prices.

So which is cheaper in the long run? To simplify it, you can base it simply on initial cost and gas cost over the time you own the vehicle, and ignore additional factors such as government rebates for efficient cars, differing insurance premiums, interest rates, registration fees, etc. If you do this, it mostly boils down to one thing: mileage. How much do you plan to drive? If you drive relatively few miles, or only plan to keep the car for a short amount of time, it will be hard for you to recoup the additional cost of the higher-priced hybrid vehicle. With SUV's hitting record lows, a low-MPG SUV may actually be a better bargain if you drive relatively few miles.

Once you start to take into account other long-range factors like insurance premiums, interest rates on the loan, and registration fees (to name a few), the hybrid becomes even more enticing. Plus, there's the added benefit of knowing that you are helping do the environment good, and helping reduce our reliance on fossil fuels.

My personal financial philosophy is that recurring costs are bad. If I can spend a little more up front to reduce recurring costs, it's usually worth it. Knowing this (and my predisposition to save the Earth), I would tend toward the hybrid vehicle if I was in the market for a new car. However, I don't expect that I'll ever purchase a new car, so hopefully hybrids will soon be prevalent in the used car market. When that happens, I'll be switching over.