Consumer Reports: Most Affordable Hybrids

what are they comparing the prius w?????

 

Doesn't make sense. Looks like they neglected to add back in the premium on residual value again. The purchase cost is higher but the value remaining completely offsets the difference within the time period given, so they are off by several thousand dollars to begin with. Plus they don't state what is "comparable" to the Prius, and we've seen how loaded that one usually is.

 

Probably chepaest Corolla AT, as usual .

Same way Camry Hybrid is usually compared to 4cly Camry.

For instance, GS450h is compared to GS350 with less equipment...

 

I thought the Prius had the lowest cost of ownership because of its relatively low price, low depreciation and low repair frequency.
The CR mileage numbers for Prius (low 40s) are way off--I routinely average 50 mpg-and more on the highway, so my cost of ownership is lower than their estimates.

 

The correct non-hybrid vehicle to which the Prius should be compared is the Corolla...Matrix ( w/ VSC ).

These comparos always make two gross mistakes.

The first.... as noted above, the residual resale value is never factored into the equation even though it's a key component of the cost. Now in their favor they do use 'depreciation' as a cost factor and that is correct. But with the supply/demand being so out of balance there often is little or no depreciation.

The second.... they never factor in any inflation factor for the price of fuel. Last fall Edmunds did such an analysis and based their estimates on the fact that fuel would remain @ $2.85 / gallon ..... forever!!!

Uhhh, Hello, Earth to Edmunds....

Their response to me is 'Well how do we know what fuel will cost in 3 or 5 or 7 yrs?' Granted, but to estimate that it will remain constant is grossly erroneous.

 

True so the best way to analyse both of these situations is to give each a fixed number...
1) if you think gas will continue to escalate the add some inflation factor for each year into the future, e.g. +10% increase annually or $.50/gal as a nominal number.

2) estimate a 'normal' depreciation rate as a cost; e.g. 10% per yr is a good number for Toyotas and Hondas.

 

Gasoline will inflate faster than other things over the long haul. Economic policy (huge Federal deficits each year, trillion dollar bailouts) are going to drive the dollar down and therefore oil up. Scarcity of oil will not improve and will only worsen. A reasonable assumption might use a 5 or 10 year historical inflation rate average.

The Volt is a $40,000 dollar car as proposed and there will be few on the road five years from now. If anything it will make the Prius look inexpensive.

Other cars could have a greater impact, but as yet there is little volume in them, and the current Prius out does them in the most important measures. Until vehicles exceed Prius in interior capacity and fuel savings at a comparable price, the Prius will remain at the apex of the pyramid. Even if exceeded by newer models it is well positioned to recapture any hybrid premium as a used car. Why? Because there is relatively little market supply of the 40+ mpg range as yet, leaving a huge untapped reservoir of future customers (as their old car/SUV/light truck notes are paid off.)

So a major problem with many of the analyses is that they use contradicting methods to come to a conclusion. How much sense does it make that the Prius will have lots of high mpg competition AND gas prices will be stagnant? None. If gas prices are stagnant (or lower as some analyses assume) then the competition will likely be stilborn.

The hybrid premium of the Prius should hold up in resale unless gas/oil prices collapse. It would be better if the affordability/cost differential analyses used two or three oil price scenarios.

 

IMO, they should compare hybrids that cost the same MSRP against one another to see which one will save the buyer the most after five years of normal ownership.

Another way to look at it is to calculate MSRP/TOC and see which one is best.

 

1++ Shawn Clark.

Depreciation is often based off lease residuals which are gamed non-stop by manufacturers and dealers, instead of simple retail market pricing of used cars. Beyong the problem of which car to use as the comparo, the goofy depreciation numbers are the main source of funny arithmetic

 

as you say ... supply / demand is QUITE difficult to estimate; but i simply can not imagine there will EVER be a time that "everyone starts driving a Volt" ... and i simply can not imagine that there will be virtually no "market" for used 2008 Prii within five-or-so years as your post suggests. there will ALWAYS be people "out there" who would LOVE to get the most fuel efficient and practical vehicle presently available, but simply can not afford them.

a used Prius in, say, 2013, will NOT need to be "really cheap" to catch the interest of those who can't afford, say, a $40,000 car ... it may only need to be much more efficient than what those people might be driving at the time, be somewhat less expensive / more affordable than the other car-choices -- new or used -- that are available, and meet the respective buyer's needs or wants when it comes to that individual defining "adequate transportation" for himself / herself ....

i could not agree more with what you said above ... especially that portion that i made this color; that "argument" was the basis of my own mind-set as i reached the decision to purchase a Prius, and even used it while "persuading" my wife to "agree" with me and "go along for the ride" ... pun intended ....

i'm not QUITE sure i agree with the comment that i underlined, though. even IF gas/oil prices collapse, there will continue to be a premium for the Prius and similarly efficient cars for those of us who are not only trying to save money at the pump, but who are also trying to consume less oil -- especially less foreign oil, if possible -- while simultaneously pumping lesser quantities of pollutants into the air ....