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A year ago, hybrids were a rare sight on the road. Demand for Toyota's Prius was outpacing manufacturing, but that may have had more to do with the limited number the car maker was producing than with clamoring customers.  

This year, it is a new story. The hybrid market has taken off and customers are buying hybrids in record numbers. What is spurring this change in the market? The initial upswing may have been prompted by a combination of tax incentives and environmental interests. The real motivator, however, is the skyrocketing cost of fuel.  

Hybrid Fuel Efficiency

How much more fuel-efficient are hybrids really? Well, it depends on the hybrid, but across the board hybrids offer better gas mileage than comparably sized non-hybrid vehicles. The Prius is the most fuel-efficient hybrid on the market and it gets between 50 and 60 miles to the gallon. Honda's Hybrid Civic does not offer quite as efficient an engine, but it still averages close to 50 mpg. Compared to a traditional Civic, a Civic Hybrid owner could save more than 100 gallons of gas per year while driving a typical 12,000 miles.  

What About Electric Vehicles?

Electric vehicles have faced an uphill battle in the marketplace, with their limited travel distance and the challenges of recharging them. Hybrids take the best of both worlds by melding gasoline engines with electric motors.  

Hybrid Advantages

The advantages of hybrids don't stop with the fuel savings! Hybrids create far less air, making them the poster children of environmentalists. Hybrid engines are also incredibly quiet, reducing noise pollution. While it may not seem to be a big deal when you think of one car, the impact on major metropolitan areas of replacing traditional vehicles with hybrids could be really dramatic. Spend a lot of time on the road solo? A hybrid might help your commute time; several states are allowing people who drive electric or hybrid cars to use carpool lanes, even when the driver is the only person in the car. California and Florida both allow certified low emission vehicles to make use of the carpool commuter lanes. Other states are passing legislation that allows hybrid users to avoid parking fees, tolls and other fees, for example by reducing state licensing or registration costs.  

Disadvantages

One disadvantage of hybrids is that they are a little on the pricey side. On the flip side, the U.S. government is offering hybrid owners a tax break to help defray the costs of acquiring one. Buy a hybrid before the end of 2005 and you can take a $2000 deduction on your federal income tax. The current law currently knocks the deduction down to $500 for people who buy hybrids in 06, but there are some laws in the works that may extend the higher tax savings.

Today's Hybrid Market

Where consumers who wanted hybrids a year ago were queuing on waiting lists, Toyota and Honda have much larger supplies of the vehicles now. Don't want the Prius or the Hybrid Civic or just need something a little bit larger? Never fear. Auto manufacturers are jumping on the hybrid bandwagon. American manufacturer ford has put a hybrid version of the Escape, the Escape HEV, on the market and several companies are getting ready to release hybrid SUVs. Next year will bring even more hybrids to market as more companies try to claim a piece of this fastest growing auto market segment. Look for new hybrid cars and trucks from Lexus, Mercury, Toyota and others in the next 20 months. Will customers be happy about these new vehicles? If fuel costs continue to rise, consumers will continue to greet these new market additions with open arms and wallets.

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