We Need Your Help - Time to Make a Decision!

If I were in your shoes I'd keep the Altima and Solara. Neither have too many miles, you don't drive either car very many miles each year. Both are high reliability cars. To me there doesn't seem to be any financial way to justify the Prius.

Just because you pay cash don't ignore the financial (non-emotional) side. If you have $24-25K to buy the Prius you will lose the compound gains of having that money in a fixed income or equity investment. If you could invest that money for 7 years at 10% you would double your money (just an example).

Just my 2 cents worth,
John

 

And in 15 years you could use the money to buy a Tesla.:nod:

 

I have been where you are. I read a LOT about buying a new car. I read a LOT on the CAR TALK web site.

As the others have said, it never makes straight financial sense to buy a new car (well, it does, but it's complicated, and believe me, you don't meet the criteria).

So, drive what you have and enjoy!!

 

I agree with the others in that it will be cheaper to keep and operate your current cars rather than sink $20+k into a Prius.

That said, if you are looking to upgrade one of your cars with a car with much less emissions, the latest in safety equipment (side airbags, traction control, skid control, safety cages etc), can seat 4 adults comfortably, and gets the best gas mileage of any new car (Tesla's and the ilk not included), then get a Prius. The Prius also seems to be a very reliable car and overall, its maintenance will likely be less than a conventional car.

At the end of the day, it will be up to you to decide if it is worth it.

 

buying a car "cash" up front is never a good idea, unless you have a lot more liquid $$$ left over after the purchase

as others said you can "invest" that money and later down the line it will grow and appreciate

and as others also said...you always loose on new cars, plus IMO you dont drive enough to justify a Prius, unless your into it for the purpose of saving the planet

and no matter what "emotions" will come into play, so do what you want to do and forget what anyone else thinks or says

my.02

 

Just do it. I'm in a similar situation, except both my current rides are 2007 models. I'm paying cash for the 08 Prius. Yeah, I guess it's an emotional decision. It's a cool car and I want it. Except up here in Canada, it's $37K tax and everything in. So not so cheap...! I do have to sell one of my "old" vehicles though, I have too many considering I work from home!

Just do it.

 

I agree with most of the others above. To give you an idea of where the purchase would start to make economic sense, I just bought an 08 to use for work. I am driving average 250miles per day, and was using a 93 4x2 Toyota pickup getting 28mpg. The pickup has 280K on it and is running fine, but just the normal maintenance for that many daily miles is getting very difficult due to fastener corrosion, etc.
I am saving between 3-4 gallons of gas a day or about 250 dollars per month at todays gas prices. Factor in lower maintenance costs and the inevitability of replacing the pickup and it becomes defendable as a sound financial decision, but certainly not a huge savings.The daily toll on my body is much less as well!
Good luck with your decision.
Joe

 

You can do the fuel calculations here: Save Money

I was driving a Jeep Wrangler before buying the Prius. Driving both about 23000 miles per year with gas at $3.43 I save about $21914 in fuel over the 8 years I intend to keep the Prius. So my net cost for the Prius is less than $5000.

Assuming I don't need to pay for major repairs for either vehicle of course.

Not quite a win but not very much of a loss either.

 

Hi Tim,

Well, the financial best move is to take public transportation, as you get to pay as you go, and the rest of the money makes interest in the interim. Barring that, the following comments apply.

Now some people feel that buying cars on interest is similar, but that is just baloney. How do people thing banks make money? By charging more interest than they give out, of course. And I have not hear of any of these interest-free loans for fast selling cars, such as the Prius.

Buying a car up-front does have a cost of money issue. But as banks are not giving out very good interest rates right now, that cost is less. So, it might be a good time to buy a new car with cash.

The Prius will have a lower cost of ownership, over its lifetime, than the other cars. But, cars of the age you have have about 2/3 s depretiation with average mileage (like the Solara) and more with larger miles. So, it probably makes sense to run the Altima until the transmission or engine go, then go Prius shopping.

Do you need to run two cars (husband/wife simultaneous driving), or just one ?

When I was in a similar situation, the thing that pushed me into selling my 6 year old car with 72 K miles, was the $3150 tax credit in early 2006. That made it worthwhile to upgrade. The previous car had a 20 mpg penalty compared to the Prius in all weather. My spread sheet indicated a 5 year break-even over buying another similar car as my old car. Since the Prius will last long beyond that, econimically (not financially) I went with it. Financially running the old car into the ground for another 4 years probably was better. But banks were giving 5 % interest back then too. Now they are down to 3 %.

 

I agree 150% with you on paying cash!! That's what my wife and I are doing. Cars are absolutely the worst investment in the world, don't buy the line of "keep your money in the bank and use theirs" if you pay yourself the payment and stick it in the bank you are much better off. People never factor in the risk of carrying debt, anyway I would probably just keep your current cars and when you have the cash and when you want it go negotiate a OTD price and enjoy!
My wife and I are really looking forward to doing just that the end of this summer with a new 09 Prius

 

My situation was similar to yours. I wanted the Prius and bought it. I am now trying to sell one of the older cars and haven't got even a nibble yet. Buying the Prius made no financial since at all but I love it and am not sorry it is here. When the Prius needs a new battery assuming I drive it that long..I will add more negative to the wallet with this decision. My wife says that my purchase will surely make oil prices take a huge dive.

 

Tim
there is no way to justify the prius based on finances for you right now. You would be spending $20,000 to save maybe $600/yr on gas. From a financial standpoint wait until one of your cars needs a very expensive repair, then do it. But as was pointed out, if you want all the latest safety equipment (I personally put a very high value on this) and were determined to buy a new car, the Prius would be an excellent choice.

Evan
I respectfully disagree that it NEVER makes sense to buy a new car. For me it did, but only because I already had a car payment on a gas guzzler, and I now have the same payment on the Prius, but I save $150 a month on gas. So I am $150 a month ahead plus the gas guzzler needed timing belt, water pump, tires, etc. I spreadsheeted it, and over 7 years of ownership, even allowing for the old car to be paid off before the Prius, I was about $5000 ahead getting a Prius. However, this is probably a pretty rare scenario. It did, however, help convince my hubby to let me get the Prius!
Fernsmom

 

You've probably heard that a hybrid cost several thousands more than a 'similar non hybrid model' and the improved fuel economy will not justify the additional cost over...say 5 years. (to be revisited when gas is $5+) But you should compare it to a car you might buy. That 'similar non hybrid model' may not be a car you would consider.

My justification was that historically I spend 26K to 30K on fuel hungry SUV's and vans. Why not get almost triple the mileage and all the other gadgets and stay in that price range? The economics worked for me.

If you've got the wunderlust for a new car and Prius is in the price range your looking at, it might be a good choice for you.

 

Texguy,

That's a very good point, which I think is applicable to many people. When I was looking at cars, I was choosing between either an 2008 Prius or a 2005 Lexus ES330. They were similar in price (Package 6 Prius was ~$3k more expensive), but the Lexus was certainly not a "similar non-hybrid". The fuel savings between the Prius and the Lexus, among other things, made my decision an easy one.

However, I only bought a new car because it was replacing a 14 year old car that was needing a repair every 6 months or so (and that got 17 mpg).

 

If you are replacing Prius for the 99 Altima, you are upgrading to a mid-size from a compact sedan.

Your Altima should get about 23 MPG when I used the EPA 2008 MPG calculator. Prius will double that since Prius gets 46 MPG.

If you sell your Altima, you can get about $4k and a new Prius would cost $22k. The difference is $18k out of your pocket.

Savings from gas for your next 150,000 miles is as follow:
$4 / gallon: $13,043
$4.5 / gallon: $14,674
$5 / gallon: $16,304

If we take $4.5 per gallon average price, the difference is $4,000. With the Prius with 150,000 miles, you can probably sell it for $4,000. So, upgrading to Prius would not cost you any money.

If you also consider the cost to maintain the Altima vs. Prius for the 150,000 miles, you will actually save money.

On top of that, you are getting a brand new car with 0 mile on ODO (120,000 miles less than Altima), VSC, climate control, safer, greener car of the future. Prius is also future proof for further price increase above $4.5 per gallon of gasoline and much lower maintenance.

To me, upgrading to Prius in your situation is a no-brainer.

 

I agree with most of the other posters.

Given what you have presented, IMHO, it is much more economical to keep your present cars and "drive them into the ground" than purchase a new car (even if it is a Prius) now.

If you wait until one of your cars goes to the great Used Auto Parts Suppliers in the sky (let's say in two years), THEN you can purchase a NEW Prius. Hopefully, that 2010/2011/2012 Prius will have more fuel economy / capabilities / creature comforts than the 08/09 Prius of today has.

 

Yea, I too agree too but I think your estimate of gas price in the next 5 years is too low. I think it will keep going up and would average at least $4 per gallon.

You need to count those little advantages of having Prius too. For example, Car Pool lane access, Ez-pass discount, free parkings, less frequent emission test, lower insurance (YMMV) etc...