You are saying it is stupid to buy a new car because it is financially
unsound. I'm saying it is stupid to buy a hybrid for the finances because
they don't work out.
It's the same thing. Do not buy a hybrid to save money because you will not
UNLESS you do the things that makes it a good decision to buy a new car in
the first place.
If one has a short ownership window, then a new car is a bad buy. If one has
a short ownership window, then a hybrid is a bad buy -- argueably even worse
than buying other kinds of cars and not keeping them very long.
Buy a new car if you want, but the economics of a hybrid do not work out
unless the ownership window is very large. That's what I'm saying.
You have to start with the stupidity of buying a new car before you can
even begin to investigate any sub-issues, like "hybrid or not?".
Once you've started down the path of "I'm throwing gobs of money away,"
any discussion of "should I also throw this nickel away too?" is
Right!! I bought my new 2004 Sienna in Sept 03 and still have it. It
will be 10 years old next month and I have no plan to sell or trade it.
It still runs and rides like it came off the showroom floor ten years
Not at all. Buying a new Toyota is usually smarter than buying a used
Toyota when you consider the cost per year, the warranty, the resale
value, and the depreciation. One thing that _sometimes_ makes sense is a
Toyota Certified Used Car which has a 7 year/100K mile warranty
included, provided the deal you get is a good one. If you buy a used car
from a private party you can't get this warranty though you can still
buy a Toyota extended warranty.
Hybrid versus non-hybrid is totally a separate issue. Hybrids are mostly
purchased on emotion since only a tiny percentage of purchasers will
ever make up the extra initial cost and the higher maintenance costs
with savings on fuel.
I would say, why discuss "the main decision" when it actually is based
on totally false premise?
Wouldn't it be better to base the discussion on the reality of how long
a new car buyer keeps their car rather than using "3.5 years?" In fact a
hybrid may make more financial sense using the actual six year average
that a new car buyer keeps their vehicle. Actually it almost never makes
financial sense with fuel at $4 per gallon, since the break-even point
for a similar size and quality non-hybrid is around 175,000 miles, but
it makes less bad financial sense the longer you keep the hybrid.
It's not the cost of a gallon of gas that makes it cost effective to go
hybrid or not. It's the _difference_ in the cost per mile of going hybrid
vs. staying with gas-only, then dividing that difference into the cost of
the hybrid package.
If gas costs $4.00 per gallon or $3.per gallon or $5.00 per gallon, your
cost per mile is the cost of gas divided by the mileage you get. If you get
30mpg, then your cost per mile is $0.133, $0.10 or $0.166, respectively, but
if you get 35mpg then your cost per mile is $0.114, $0.085, $0.142,
respectively. It does not matter what the car is, the cost per mile is the
cost of a gallon divided by the miles it will take you. If you get 30mpg in
a non-hybrid and 35mpg in the same car but with a hybrid power plant, then
your cost savings is the difference you realize in the 5mpg that you gain
The savings is the difference in $4 divided by 30 or $4 divided by 35, or
whatever the mileage is. As the price of gas goes up, the savings in the
cost per mile also goes up, so in this respect the price of a gallon is
At $4 per gallon and 30mpg, the cost per mile is 0.133 (13.3 cents), but at
35mpg the cost per mile is 0.114 (11.4 cents). The savings is 1.9 cents per
mile. This is the base number to determine how many miles one must travel to
pay for the cost of having a hybrid. I do not know what a hybrid costs
relative to non-hybrid, but for the sake of simplicity, let's just say the
hybrid package costs $5,000 more than the same car in non-hybrid trim. If
this is true, then 5000 divided by $0.019 equals 263,158.
One must (in this example) drive the car more than 263,000 miles JUST TO
BREAK EVEN. I'll be the first to admit that my numbers are not an accurate
depiction of what the costs truly are, but the math is right even if the
numbers used are not. Make the adjustments as needed, but at the end of the
day the cost per mile is the price of a gallon divided by the mileage it
gives. One must make an assumtion as to the cost per mile of the non-hybrid,
then subtract one cost per mile from the other to find the difference. Then
one must divide the cost of the hybrid package by the difference in the cost
per mile to get the miles needed to break even on the hybrid package.
I am sure the numbers I pulled out of my ass are not accurate because I do
not think it takes anywhere near 263,000+ miles to repay the cost of going
hybrid, but I stand by the math used. I agree with sms, the miles to drive
should be much closer to 175,000, and not very much lower than 150,000.
You're incorrectly claiming that people are making the decision to buy a
new car purely on emotion.
The fact is that for certain makes of vehicles it doesn't make a lot of
sense to buy them used. If a vehicle has terrible resale value then a
used one can make financial sense (though the reason for the terrible
resale value might be worth investigating). If a vehicle has very high
resale value then a used one often makes no sense. You get less of a
warranty, less overall service life, and often save very little, if
anything in the original price.
New car buyers are keeping their new vehicles an average of six years.
Let's assume that they don't want to keep a vehicle that's more than six
years old. So they can buy a three year old vehicle every three years,
or a new vehicle every six years. It's after six years when a lot of
wear items on a new vehicle need to be replaced, such as brakes, tires,
batteries, CV boots, shocks, struts, timing belts, etc..
Good article about this here:
"The added cost for CPO models, coupled with higher financing rates
compared with new cars, can sometimes push their price close to that of
an equivalent new model — or in some cases, even beyond."
The first half of that is demonstrably false for Toyotas. The resale
value of Toyotas is so high, and new ones are so heavily discounted off
of MSRP, that it rarely makes financial sense to buy a used Toyota. In
fact it's not unusual find year-old Toyotas being sold for more than new
ones to naive buyers. Just went through that with a relative a few
months ago. There's a huge difference between the street price that a
savvy buyer pays and the MSRP. Yet there are enough naive buyers that
believe that the new vehicle's MSRP is the price they must pay that they
overpay for used ones.
In July, Toyota once again stated that they want to reign in
discounting. “We will not simply go after volume,” Ozawa told reporters
at a briefing in Japan. “We are going to restrain discounts and
incentives.” I wonder if they are really serious. To reign in
discounting will mean large drops in volume, and Toyota historically has
liked to keep its factories operating at full capacity and unload that
capacity by discounting. It's amazing to me that we paid slightly under
$17K for a 1996 Camry LE. 17 years later, the street price of a 2013
Camry is slightly under $19K. A $2K increase over 17 years, but the 2013
is larger, more powerful, has better fuel economy, and much more
standard equipment. Whether the current generation lasts as long is the
key question. Sitting in the new Camry you feel like you're in a luxury
car like a Lexus.
Of course. I helped my sister-in-law buy one earlier this year. A
wonderful vehicle. You almost feel like you're driving a Lexus. I was a
little concerned because after the third generation Camry, Toyota did
some decontenting on the fourth generation. But the seventh generation
they apparently realized that they had to undo the decontenting. As Car
and Driver wrote: "More luxury and more mpg for America's most popular
car." The styling is pretty bland though. I think the Accord has better
styling, but we (my family and extended family) are done with buying
Hondas because they lack the long-term reliability of Toyotas.
No offense, but the Prius feels very utilitarian. It's fine for a daily
commute car, but you would not want to take any long trips with four
full-size humans and their luggage.
No doubt there was *some* premium on it for being hybrid, but that was
offset by the fact that we know and trust the original owners, and know
how they cared for it.
THAT'S something that's worth paying a premium for, and ignoring whether
it's a hybrid Civic or a non-hybrid Civic.
The average age of vehicles in the U.S. continues to increase, now it's
at about 11 years. That doesn't mean that the original owner kept it for
11 years though. In 2011, an R.L. Polk study showed that Americans were
keeping their new vehicles an average of 71.4 months, that's nearly six
Using "3.5" years is not insane, it's dishonest. I know it wasn't you
that stated the "3.5" figure, but you should be careful about believing
what some people say in their posts in their effort to "prove" something.
Of course they can. But what's the point? Why tell someone who has
already gone down the path of making a bad financial decision how some
small detail of this bad decision can be slightly changed to make it a
very slightly less bad financial decision?
Once you've gone down the bad road, it really doesn't matter whether you
drive on the right side or the left side.
On Friday, August 2, 2013 3:08:58 PM UTC-5, Jeff Strickland wrote:
I'm fairly convinced that a hybrid will cost more over the long
haul for someone like me that keeps a car until it's almost rotting away.
They cost more initially. The drink less gas, but how much that matters
will depend on how much driving you do. When the hybrid gets old and
parts start flaking out, it will probably cost so much to repair as
to render the vehicle as disposable. More to go wrong and break even
I considered one when I bought the Corolla, but I didn't want any
part of it. It was a hybrid Civic for $1000 more than I paid for the
Too scary after the miles start piling up. It's bad enough with just
an aluminum conventional engine. IE: don't let one overheat or it's toast.
I don't want to see a replacement battery in my future that costs more
than the car is worth.
And for the greenies, you have to consider the materials and making
of the batteries as far as the big picture.
Myself, I'd rather have a high mpg conventional engine. I get 43 mpg
at 65 mph with the cheap easier to fix Corolla. It's not in the 50's,
but still not bad.
The question is, if there are two of the same make and model cars, a Corolla
or Camry or Civic or Accord for example, that are available in gasoline only
and hybrid trims, how much more does the hybrid cost?
If the gasoline Corolla costs $17,500 and the hybrid Corolla costs $22,500,
then the premium for hybrid is $5,000. I don't know what the cars sell for,
but if one is looking at one of these models then he will know what the
selling price is, and the difference in the gasoline model and the hybrid
model is the number to know.
The next number to know is the cost per mile to drive, specifically the
difference in the cost per mile. If you are driving a gasoline car for 1,000
miles for $120, then your cost per mile is $0.12. If the same distance in a
hybrid can be covered for $100, then the cost per mile is $0.10. The savings
Divide the premium ($5,000) by the savings per mile ($0.02) and the result
is that this example must go 250,000 miles before the savings in per-mile
operating costs will cover the price of the premium. I pulled numbers out of
my ass to illustrate the math, but if one has the actual numbers and does
the same math, the result ought not be very much different than my wild
The point is, you need to know what is saved and how much the package costs
that gives the savings. Once you know these two numbers, you can calculate
what the period is for the savings to repay the premium. If the period is
greater than your expected ownership term, you are not saving anything.
Almost no one buys a hybrid believing that the additional initial
expense will ever be offset by fuel savings (if they do believe this
then they either drive a tremendous number of miles per year, or they
are bad at math). At $4/gallon, the break-even mileage of a Prius versus
a Corolla is about 175000 miles.
People buy hybrids because they believe that it's a good idea to use
less fuel and emit fewer pollutants.
The success of the Prius is largely due to GM. The extremely low quality
of the 1978 to 1985 Oldsmobile diesel powered vehicles caused Americans
to eschew diesel powered cars. If the U.S. had the same diesel vehicles
sold in other countries then we could have far better fuel economy
without the need for the complex hybrid systems. Instead, we have the
misperception that diesel vehicles are slow and dirty.
A VW Passat TDI gets 43mpg highway. A Camry hybrid gets 39mpg highway.
The Camry hybrid is enormously more complex.
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