Civic Duty

Back in 2006, Honda was pretty psyched about its new 50-mpg Civic Hybrid model.  And, if this ad is any indication, so were the flowers, praying mantises, toucans, giraffes, and fishes.

And why shouldn't everybody be psyched?  Fifty is an awful lot of miles to be able to drive on a single gallon of gas, and less fuel consumption means lower emissions, spunkier fauna, happier customers.  After all, not only can consumers feel good about doing something helpful for the environment, they can also spend a lot less money on transportation.  So hybrids are a good deal, right?

Well, that depends.  According to the 2009 National Household Travel Survey, the average driver clocks somewhere in the neighborhood of 13,000 miles per year.  Let's say you're going to drive more than average, maybe 15,000 miles, and so you're thinking about the 2006 Civic Hybrid.  The regular Sedan from that year advertised only 40 mpg, compared with the hybrid's 50 mpg.  Over the course of a single year, that's a difference of about 75 gallons of gas.  At something like $3.50 per gallon, that means the hybrid gets you an annual fuel savings of around $263.  Now that's nothing to sneeze at, but it's not the whole story.

All of those happy giraffes come at a price: the Civic Hybrid model cost about $6,000 more than the all-gas Civic Sedan.  That means, with a savings of $263 per year, you'd have to drive the hybrid for almost 23 years in order to make up for the higher sticker price.  That's an incredibly long time to own a car, especially at 15,000 miles per year, or 345,000 miles overall.  Improbable, but maybe you care more about emissions than money.  You can still help the planet a little, and that's exciting.

Turns out not everybody was excited.  In 2011, Heather Peters sued Honda for $10,000 in California small claims court,1 alleging that her 2006 Civic Hybrid never got more than 42 mpg, and in fact -- after a factory software upgrade -- only managed about 30 mpg.  She wanted her money back.


But $10,000 buys an awful lot of gas.  Would a difference of 20 mpg really warrant that level of repayment from Honda?  Let's give Ms. Peters the benefit of the doubt (maybe she wanted a hybrid because she drives a lot) and assume she drove a whopping 20,000 miles per year for all 6 years between the car's manufacture and the lawsuit.  That's 120,000 miles of driving.

At the advertised 50 mpg, that amounts to 2400 gallons of gas.  But Peters only got 42 mpg until the system upgrade (which happened in 2010), and then 30 mpg after that.  So for the first four years, she actually would've needed about 476 gallons a year, and then about 667 gallons in each of the last two years.  That's a total of 3,238 gallons, or a difference of about 838 extra gallons compared to what she expected.

While all this was going on, the average cost of gas in California was around $3.16 per gallon.  That means the extra fuel that Peters had to purchase cost about $2,650 more than the advertisement led her to believe.  Even in this rather extreme scenario, with generous assumptions, it seems that $10,000 is pretty steep.

But remember, the hybrid also cost an additional $6000 just to drive it off the lot.  Peters argued that, had she known she was only going to get 30 mpg, she never would have shelled out the extra cash for the hybrid in the first place.  A judge agreed, and ordered Honda to pay Peters a total settlement of $9867.19.

Her celebration was short-lived, though.  Honda appealed the decision, citing -- among other things -- that it's actually the EPA who conducts official testing (that's why commercials are always saying "EPA-estimated"), and thus Honda was required by law to post the 50 mpg rating.  Also, fuel efficiency estimates are just that, estimates, and actual mileage will vary based on a lot of different factors.  The original decision was overturned.  In the end, Peters ended up making -$75 on the lawsuit, after paying Honda's court costs.

Even though she didn't actually end up gaining anything from her suit, Heather Peters did manage to draw attention to an interesting question: Should you buy a hybrid car?  Before you can answer that question, you have to figure out how much you're likely to drive, how long you plan on keeping the car, and the additional cost.  The good news is, automakers may be starting to bring hybrid prices in line with their gas models.  So who knows?  Maybe we can keep those giraffes smiling after all.

Teachers, want to have this conversation in your classroom?  Check out our lesson, Civic Duty!

1.  The largest amount allowable in small claims court by CA law.  By this point there was already a class action lawsuit, which Peters opted out of.  The settlement in that suit was likely to be less than $200 per claimant, so she decided to roll the dice on her own.

Leave a Reply

Your email address will not be published. Required fields are marked *