Drivers thinking about switching to a more environmentally friendly vehicle, but wary of higher hybrid price tags, may be pleasantly surprised.

What a difference a year makes!

Last year, only one hybrid vehicle appeared to be a cost-effective purchase, based on a BCAA five-year ownership cost analysis.

This year only one of the hybrid vehicles evaluated proved to be a money-loser.

Why the quick turnaround?

If you guessed the price of gasoline -- duh -- you're correct, but there's more.

The showroom purchase price difference between a new hybrid and its gasoline counterpart also appears to be shrinking -- rapidly!

The analysis compares the purchase and operating costs of hybrids with comparable gas-powered models over a five-year period. It reveals that, although a hybrid costs more to purchase, over a five-year ownership period, it generally ends up being cheaper.

An average Honda Accord V6 owner is paying a least $370 more for gasoline this year than last year and probably more, if more than 50 per cent of the driving is in the city.

Over five years that really adds up and if the cost of gasoline continues to rise -- did I say if? -- a hybrid is going to look even more attractive.

Three new hybrid vehicles were added to the cost study this year and the second generation Honda Civic Hybrid is also completely new. The latter is a good example of the shrinking cost differential on a new vehicle purchase.

The BCAA figures from last year showed a before-tax $7,315 difference between Civic and Civic Hybrid. The '06 Civic Hybrid, however, is only $2,520 more than its similarly equipped gasoline version -- that's a $4,795 saving over last year. Add the tax and financing incentives that hybrids currently enjoy and you're already ahead of the game -- before you even put a drop of high-priced gasoline in the tank.

Another new hybrid that offers outstanding value is the all-new Toyota Camry Hybrid. Bigger than the Prius, it has a similar hybrid

drivetrain, but it produces the equivalent of 187 horsepower, and it costs less. And the pre-tax cost difference with a comparable gasoline-only Camry is less than $4,000.

Strangely enough, the biggest, most expensive hybrid in the study, the Lexus RX400h, also provided the largest cash return, $4,463.

The first reason for this is that it partially escaped the luxury sales tax premium, due to a $7,000 taxation rate adjustment allowed for hybrid vehicles over $55,000. And secondly, the more you borrow from VanCity at prime, by using its "Clean Air Auto Loan," the more you save.

With all these factors in play over five years, six out of seven hybrids worked out to be cheaper. BCAA cites shrinking purchase price differentials and higher fuel costs as the main reasons most hybrids are more affordable over the longer term.

The BCAA hybrid vs. conventional cost analysis assumes:

n gasoline cost of $1.15 per litre

n financing 80 per cent of total purchase cost and taxes, over five years

n neutral maintenance costs

n long-term depreciation and resale values remain unknown, so they are assumed to be neutral.

The use of hybrid power for transportation is not a new idea -- the old semi-electric pedal cycle comes to mind. When electrical power got low, you pedalled for a while until the bike built-up enough electrical energy for its electric motor to take-over and propel it again.

Although immensely more complex, today's hybrid vehicle essentially works in a similar way -- the big difference being that a gasoline engine does the pedalling for you.

It's not a zero-emissions vehicle but it's darn close, the fuel savings are considerable and the results are in -- it's now a cost-effective purchase.

In a recent BCAA poll, 62 per cent of members surveyed said they would be "very or somewhat likely" to consider purchasing a hybrid if the price was only 15 per cent higher. If hybrids and conventional vehicles were priced the same, the percentage of likely purchasers jumped to 78 per cent.

Bob McHugh is the Senior Technical Advisor at BCAA

The benefit of the hybrid vehicle tax credit will also be substantially reduced or eliminated if the individual purchaser is subject to the federal alternative minimum tax (AMT). Individual purchasers and corporations who have business use of the Hybrid vehicle are subject to different tax laws that may also substantially reduce or eliminate the tax benefits. Again, it is recommended that you consult a tax or accounting professional when claiming a deduction or credit on one’s income tax return.