Fuel Economy: Break Even Time for Hybrids

I always tell people not to get rid of their current vehicle and buy a new hybrid, based soley on the current high fuel costs. You just won't save enough money in fuel savings to make up the difference for the cost of a new hybrid.

But if one is already market to buy a new vehicle, then a hybrid is the way to go.

 

I bought my car because of the engineering piece, the toyota reliability, gas milage and travel savings.

 

My previous car a 1997 Eagle Talon averaged 32 MPG. My lifetime average in my Prius is 53.3 MPG. In this first year I drove the Prius 30,000 miles.
Assuming I put the same miles on my Talon I would have used 938 gallons, in the Prius 563 gallons.
If I assume that I paid an average of $3 per gallon over the 12 months I saved $1125 (technically making my car payment $191)

But when it broke down last year (Eagle Talon) and would cost more then the vehicle was worth to fix I started driving our old garaged 1991 Ford Explorer 15 MPG (excellent condition just a gas hog) I mean it seemed like a good idea to just run it rather then get a new car. I drove it for 2 months before I had enough and traded it in for the Prius. If I compare my savings to driving that Beast I would have used 2000 gallons, so I could also say I saved $4312 (technically canceling out my payment and paying me $75)
Part of my main motivating factor wasn't the then $2.50 per gallon gas, but the obvious trend that fuel prices would continue to climb which they have. I couldn't justify buying a new vehicle that was too small to comfortably hold my family and buying a vehicle that didn't get my old daily driving car's MPG seemed like a major step back to me so the Prius was the obvious choice for me. Haven't looked back since. Excellent decision.

 

I might be wrong here, but doesn't the Camry hybrid have a HUGE premium? Approx $19k for non-hybrid, vs Approx $27k for Hybrid version.


Either way you can make the same arguments with something like solar panels on your home. "It'll take 15 years to pay those off at current prices..." well for the next 15 years you won't pay for electricity, and after that, you'll still not be paying.

 

in regards to the Camry Hybrid Premium, here in San Diego they advertise the Camry Hybrid at $4,000 off MSRP....

 

If people are looking for economy then there are cheaper alternatives. But I think it's wrong to look at the hybrid premium just as a prepaid expense. No one throws their cars away after 3.5 years. They have value. Don't leather seats increase a cars resale value despite being used for 3.5 years? The way I look at it more like an investment. Using the article's numbers, spending an extra $3,489 returns $989 each year. That is a 28% rate of return -- tax free, each year, likely to increate, all but guaranteed. The only way I wouldn't get this return is if gas prices dropped. A stocks investment would need to generate a 37% rate of return to equal this. If this were an annuity, the present value of a $989 payment for ten years, at 8% (the average rate of return for stocks) would be $6,636. Five years would be $3,948. Add to this the fact that as gas prices increase, so does my rate of return. Then I also have the comfort factor in that I am well insulated against price increases, almost like insurance.

 

Hi All,

Edmunds Prius Total Cost of Ownership for the Prius looks to be twice what the National Laboratories measured on two Generation II Prius.

In my zip code it came out to $.49/mile, versus the PNWL cars at $0.22/mile operated in Phoenix.

 

I like your numbers, but I do not like the idea of considering a depreciating-value asset as an investment. In purely economic terms, I think you need to look at the total cost of ownership. There were pieces of this missing in the article, and the article's author acknowledged some of that in responding to messages on the blog.

On the investment end -- imaging how those folks feel who plopped down $50K + on Cadillac Escalades. If they had investment in mind, they may have figured those SUVs get more expensive each year so the owners could always trade it in soon with high resale value. Hmmm.

 

I live in redneck oil rich Alberta. The used car lots are plugged with SUVs. Guess I traded in the anti-Prius (2001 Nissan Pathfinder) just in time one year ago!

A friend asked me if he should buy a Prius. He wants to get "cheap transportation". I told him you don't buy a Prius to save money, you buy it to reduce your impact on the environment. If you want cheap buy a Kia or Hyundai. Just remember, you will be buying a "cheap car", and it will drive/feel like one!

 

David, did you mention KIA AND HYUNDAI???????

YUCK! i think we all bought the toyota prius because of it's tradition and heritage of being the best hybrid vehicle, reliability and customer satisfaction.

if that person is your real friend, tell him to buy the base model prius. NOT the other two brands mentioned above, you might not be friends for long.

with everything being mentioned about the comparisons of non-hybrids vs hybrids or even hybrids vs other hybrids, here's my view of the bottom line....................one must decide for themselves whether or not they want to get a hybrid or not........................then, one must realize that gas prices are going NOWHERE but UP...........................stop comparing apples to oranges and start the proper comparison with the correct vehicles and make your decision from there.

again, i went from $25 dollars of gas A DAY ($25 about 4-5 months ago, probably about $30-$35 today) TO.............$30 A WEEK with my new prius.

everybody has choices and this is a free country. your FREEWILL and decision should be your guiding light for buying a hybrid or not, but, let's stop this comparison!!!

 

Well, I posted on the actual Edmunds.com page, but I'll reiterate some here:

IMO, the article was plain out biased and poorly researched. Or perhaps it was "intentionally" written that way to evoke reactions from Prius owners? I do not know heh :biggrin1:

 

You are wrong, and your numbers aren't even close. One of the cars we looked at was a TCH with minimal options and I could have had it for about $23,200. I've seen the cheapest 2009 Camry CE go for around $17,000.

The Camry Hybrid is not directly comparable to the LE or XLE. I believe it has everything the LE has plus a few features that are only available on the XLE, plus one or two that aren't even available on the XLE. With all of the factory options available to make an LE comparable to a Hybrid, the price differential is about $2500. However, there are still a few standard features on the Hybrid that are not available at all on the LE (smart key, automatic climate control w/dual temp, etc.). An XLE is about $500 more than a Hybrid. My guess it that the hybrid premium is around $1500-1700, though the plentiful supply of non-hybrid Camrys means they're usually more deeply discounted (though you can get a really good deal on a hybrid Camry still, several hundred under invoice).

 

hanselong,

I was going to point out those numbers myself if you hadn't done it already. I hate when people mention the "hybrid premium" in talking about the Prius. It's one thing to use that argument when talking about the Camry vs Camry Hybrid, or Escape vs Escape hybrid - but I think it's irrelevant for the Prius.

There really is no good vehicle to use in a comparison, and critics usually pick a smaller car with far fewer comforts and features to use in their analysis.

I maintain that there doesn't exist a comparably sized, 4-door, automatic transmission with air conditioning, remote entry, digital displays/MFD, etc. for much less than a package #1 or #2 Prius. From purchase to maintenance to gas to resale, I don't think there is a better value than the Prius.

Tim

 

I heartily agree! ^^

Actually, after pointing these things out, I've "converted" a total of 3 people into fellow Prius owners :biggrin1: (almost 4 - he's just waiting for the right time to actually own a car).

Another annoying critique on the Prius is actually about its size. I can't believe how often I hear "But it's such a small car!" or "but it has such a small trunk!"

One such person was my mom, who owns an Escalade (I don't know if I spelled that right). She continued to gripe until she asked me to drive her and my brother to the airport while carrying four large boxes plus a few carry-ons (the largest box was about 3'x3'x3' so is that 27 cubic feet?).

They all sat securely and comfortably and she conceded my Prius has a much bigger carrying capacity and is more comfortable than her Escalade. (Granted, her Escalade has enough seats and seat belts to uncomfortably seat 7 skinny people, but yeah...).

 

It's a different way to look at it. But it make more sense then calling an asset with a residual value a prepaid expense. Also, the investment world is full of investment vehicles (pun intended) that offer a stream of payments and a residual equal to, or less than the purchase price. But what makes this "investment" better is that there is no finite, contractual term. As long as the asset is functioning, you get the benefit. Bottom line, is that if I have the ability to pay the extra $3,500 (I think less) then I get a return. And, the asset's residual value is bolstered as well. But, I do agree, TCO is the acid test.

They feel stuck, and hopefully a little embarrassed. I have a friend that just sold their Escalade for $20K when they purchased it for $60K less than four years earlier. But, at least they bought a Prius this time.

 

We went from using 70 gallons per month with our GMC to 20 gallons per month with the Prius. We can easily make do with the size of the Prius compared to the size of the Jimmy. Saving $200 per month on gas helps pay for the new car. We have three married children and 5 grand children so we want to be as responsible as possible. We drive less walk more and I am buying the Prius plug in when it is available. I figure breaking even has lots of different aspects.

 

I am reminded of the cartoon, where the flying saucer arrives at Earth to see a huge tombstone which reads, "Here lies the Human Race. They knew how to save themselves, but it wasn't cost effective".

 

This is one of the more interesting myths about the Prius in that due to the Prius' unorthodox styling and well thought-out, efficient packaging, it appears smaller than it really is.

But I agree with others that say there are other, more cost-effective purchases than the Prius. In fact, the thing that persuaded me to buy a Prius more than anything else was the large tax credit at the time. Without that, I probably would have bought a cheaper, non-hybrid (most likely a Honda Fit).