Dealer markups on hybrid cars—plug-in or not—are getting steeper, which could cancel out the decrease in ownership costs afforded by their increased fuel efficiency.
CarsDirect reports that one California dealership has added a $10,995 markup to the redesigned 2023 Toyota Prius Prime plug-in hybrid, bringing the advertised price from $36,649 to $50,644 before taxes and fees, as well as any dealer add-ons.
Another California dealership has put a flat $3,000 markup on every Honda Accord Hybrid and Honda CR-V Hybrid in stock, but is not applying markups to non-hybrid versions, according to CarsDirect.
2023 Honda Accord Hybrid
Certain hybrids are also receiving higher interest rates, CarsDirect reports. According to a dealership bulletin, Hyundai is offering rates as low as 0% APR for non-hybrid versions of the Tucson and Santa Fe, but a much higher 5.99% APR rate on the hybrid and plug-in hybrid versions.
These markups could erase the ownership cost advantages of hybrids. In addition to better fuel economy than equivalent non-hybrid models, hybrids have had lower repair costs overall versus non-hybrids, going back many years. A 2015 study found that hybrid repairs were already getting cheaper compared to other cars. A 2020 study found that low ownership cost was part of the reason why Toyota hybrid owners keep their vehicles so long.
2023 Hyundai Tucson Plug-In Hybrid
Prices on used hybrids or all kinds surged last year, and haven’t yet settled to their previous levels, so that may not be a viable alternative to marked-up new cars. On the new-vehicle front, if you can navigate the markups, there are some impressive ownership-cost values that pack 40 mpg and all-wheel drive for under $30,000. And taking advantage of hybrids’ Eco mode may help provide payback sooner by maximizing mpg.
For many shoppers, however, EVs will have the lowest long-term ownership cost. For the moment, there appear to be more deals available on EVs as well, although that can always change.