Yahoo Green: Rethinking the cost of hybrid cars

I agree too. I did a very similar spreadsheet in the summer of 2007 to help me decide on the Prius...and that was when gas was still under $3.00.

 

well the bottom line is that the Prius still comes out on top. but the misinformation is unreal...

"up to $3400" for tax credit... did they mention WHICH models qualified for that?... hehehe...

the answer to that is about... approximately...

NONE

 

The so-called "real" cost of purchasing anything is a feel-good (or feel-bad) exercise, except for accountants. We decided to buy a Prius becase I was tired of paying near-$4 gas and believing that the cost would not fall significantly in the near future. I also believe that the Prius leads in the direction of a solar-powered car, which is my ultimate goal. To determine whether we could afford the monthly payment, we matched the cost of gasoline for the car we would trade against the presumed cost for gas at an assumed MPG rate, figured we had enough extra money floating around to make up the difference and made the deal. Interest rates figured into the deal only as as a factor in which lender we chose. Maintenance costs were a wash, assuming we would have uised a similar maintenance schedule. I have no quarrel with someone who wants to build spreadsheets to determine costs,. But in the end, it's "do I want it? Can I afford it?" Not "Will I make my money back in X years.? That's a commercial concern, not mine.

 

Agree 100%.
I did an Excel spreadsheet to figure prices, options, and available interest rates on balances. I wanted it, I could afford it, I bought it.

 

Me three. I had already decided it was time for a new car, and I expected/hoped to keep the new car for as long as the old one (9 years/97,000 miles). So it didn't take long to realize that "someday I'd like a hybrid" had turned into "I should buy a hybrid now," and with a little research I figured out that the Prius would best meet my needs. My cost analysis was actually an analysis of my budget - I put together a detailed list of all my expenses, factored in monthly contributions to savings (retirement funds and cash reserves), and figured out that I had enough left over to afford a car payment for a Prius.

 

wow, a lot of the calculations on that spreadsheet are wrong. The oil changes are less than 3k miles apart? Who the hell still does that these days? Plus the oil change for a prius is usually more expensive since you are using 0w-20/5w-20 vs 10w-30 for the other cars.

 

The Prius is in a price range, mid 20s, where the cost benefit is favorable over a few years. I believe the comparison is more of the Prius vs a V6 compact rather than a 4-compact or 4-subcompact. The Prius is a roomy car with more pep than a 4-auto compact or subcompact. More like a 6-auto compact. That makes it more favorably priced.

 

Why is the Prius still be compared to the Civic and Accord?

 

When I read "Yahoo Green", I thought it was a new Prius color!

... Brad

 

I bought my Prius for $20,740 -$787 (tax return) =$19,953

16,600 miles and 13 months later the KBB private trade value is $21,625

The local dealer is selling an identical Prius at $24,000 on Autotrader.com

Uhm lol

 

AHA!!! YOU HAVE JUST MADE HISTORY! A car as a financial investment that increased in value!!!*
(*non-antique, but within first few years)

 

Even better ... our local Toyota dealer has a few (three)
used 2002 Prius cars (previous model), right now, for $16,488.

For that price, it might be tempting to trade in my Corolla. I'll think about it.
If anyone has any reasons why I might not want to do that, please speak up.

 

FINALLY one of these articles gets it right. This is usually the first thing I have to point out to the people who question the wisdom of buying a hybrid... You pay the premium up-front but you also get it back when you sell or trade-in. And the gas savings in between are free.

Tim

 

HAH!!

i can top that. i bought my 2004 package #1 for $22,041.14. drove it off the lot, drove it 26 months, put 30,000 miles on it. it was totaled in an accident. (F-150 extended cab sideswiped me) well, the other guys insurance company paid my rental car for 3½ week and then cut a check for 23,800... i added just under $700 of my own money, paid cash for my 2006 PACKAGE 4 (yes that means $2300 in upgrades for $700 PLUS free use of a car for over 2 years!!).

now, that was sept 2006... add in the tax credit which i qualified for 14 days before it was cut in half and i actually got the upgrade for free and pocketed $200 plus the free use of car for 2 years (tax credit was $3400 but i actually only benefited around $900... but oh well!!)

and lets face it, Pri's are in much higher demand now

 

Lost the entire reply because of NoScript (what, I need to allow more sites than priuschat.com to post??), but the gist of it is: as a proud Prius owner who likes the fact there are plenty of them in this area, I'm sorry to say I think the article is crap. Look at the assumptions used: you sell after 3 years, you use a 2-year loan, and the resale value (which is the largest contributor to the reduced "cost to own" number) is still the same. The latter I'm willing to let go, but the first two? What?

 

Wow, you go man! I wish somebody would go hit my v8 parked outside just so I could get rid of it!

 

Additionally, I HIGHLY doubt that anyone who bought a Prius within the past few years is looking to trade it in right now. "You sell after three years..." I don't think so! Anyone who has a Prius is hanging on to it for the long haul. Even for those that are waiting for the next model to come out so that they can trade up .... Do you have any idea how long the waiting list is going to be ?????? For anyone on PriusChat that wants a next-gen Prius, you should drive down to your Toyota dealer right now and put your name on the list.

 

I did not check their calcs, but did they use time value of money to discount those future annuities? I rarely see anyone apply TVM with RRR appropriately for these things.

People either think that they don't need to or don't know how to, but all of us realize that a dollar tomorrow is not worth a dollar today, and that future dollars must be discounted to sum (add up all to) the payments. Otherwise, one is summing up apples to oranges. It needs to be added up in today's dollars or discounted to some future date at least - either would assure that we are comparing apples to apples.

If no one believes in time value of money, then you give ME $10,000 today and I'll give it back to you ALL $10,000 of it, in 10 years.

For instance, the Prius fuel costs. We don't pay for 3 years of fuel TODAY. I'll estimate that the user will pay $40 every other week, for three years. At a 5% IRR/RRR or expected rate of return, instead of $3260 they list, in TODAY'S DOLLARS it is $2875. (See Calculate Present Value for an online Present Value (PV) calculator) I used .21% (per period) [That's 5% per annum divided by 26 periods which is every other week], periods is 78 [26 periods for three years], $40 payment [assumes 10 gals per fill up at $4 per gallon staying steady], FV zero [the gas will have no value at the end of three years].

The present value of the sale of the car is a big unknown. But, one should discount that (convert it) into today's dollars as well. All other payments such as repairs, etc., must also be accounted for. This might be easier with cars such as MINI Coopers, that come with paid maintenance. I figured a (base) MINI costs less IN TODAY'S DOLLARS than does a Fit, Versa, Yaris.