It still scales with the non-hybrid. TYPICAL MPG shows 65MPG (in today's numbers) for the Insight. Getting 100MPG out of it really takes a lot to do and it's not usually compatible with rush hour unless you want to be the nutter holding up traffic.
But saying I get 100mpg peak is like someone with a Corolla getting 45mpg. It is doable, but only if drive like you say. Just making the point that a lot of people throw out those peak numbers as if that is what they get all the time. 70 - 80mpg can be achieved without doing that. When I drive in the Salt Lake area in rush hour I typically get 75mpg @ 65 - 70 mph, that is staying in middle lane at the pace of most of the traffic and the speed limit being 65. That typically happens 2 - 3 times a year.
Being he only has under $5k in the car makes this less an issue, but hybrids are absolutely never a good idea for anyone doing such a small annual mileage if maximum economy is what's desired.
I know a lot that plucked down a ton of cash for hybrids and their commutes are all of 20-30 mins each way. They think they are really saving though.
I understand, if the car was new it would take a lot higher number of annual miles to make up the difference. My mom and dad bought a new Prius in 2008 to replace an Aztek. Based on their annual miles and driving style it works and the savings will eventually payoff. It definitanly didn't hurt that they did a trade in plus cash. For someone who doesn't drive a lot and make payments plus interest it doesn't.
Buying used as Eli, Silex, and myself did makes sense and the payoff is much quicker. It also doesn't hurt that the Insight is so easy on the maintenance side. As a bonus both Eli and myself are also hobbiest / enthusiasts and get enjoyment and performance boosts out of mods and hacks and can do our own maintenance.