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A Proper Economic Perspective

Discussion in 'Gen 2 Prius Main Forum' started by airportkid, Oct 27, 2005.

  1. airportkid

    airportkid Will Fly For Food

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    I keep seeing references to the "non" cost effectiveness of a hybrid because its premium purchase price and alleged higher maintenance expense outweigh its fuel economy. Leaving aside all the misperceptions in this regard and taking this view on its face, it's still a bad perspective. It assumes that the sole criteria for adjudging cost effectiveness is limited to how much moola comes out of my wallet.

    Well, there's a bit more to it than that.

    Let's say that for reasons beyond your control, you are confronted with a choice. You have to give at least $100 to the Al Quaida Support Fund, or at least $150 to the American Red Cross. You can't do neither - it's one or the other. Which outfit gets your money? The $50 differential isn't going to break you, so if you're like me you shrug and write a $150 check to the Red Cross, probably without any hesitation.

    Now that analogy was extreme in order to make the point: even in something as stark as the situation above, we weigh more than just the wad of greenbacks leaving the till in making our choice. In this case, who gets the money matters more than the amounts involved.

    I bought a Prius because, among other reasons, even if it costs me a bit more in capital outlay and maintenance expense (which is arguable), it shifts a portion of the total expenditure from Chevron to Toyota. I would much rather fund a company like Toyota, which has proven itself more or less socially responsible, than keep shoveling money to Chevron, which has repeatedly and systematically fought hard to evade significant social responsibility (Chevron of course is only one of a 50 gallon barrelfull of companies that make up the petroleum industry).

    I don't know yet if the Prius is going to cost me more than had I bought a $15,000 conventional sedan. But I smile every time I pass the Chevron on the corner, not needing to pull in and make their cash register ring.

    Mark Baird
    Alameda (San Francisco area)
     
  2. micheal

    micheal I feel pretty, oh so pretty.

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    Nice perspective. It's like I tell people now, how long is take for those mag wheels to pay from themself? Or that sunroof? It is more than dollars and cents. As long as the media continues to have articles critiquing how hybrids don't save money, we will have to battle that perspective.
     
  3. 2Hybrids

    2Hybrids New Member

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    Completely Agree

    One of my co-workers approached me out in the parking lot when I was leaving last week, looks at my car, and says "you'll never make up for the expense in gas savings."

    I looked at her, and then at her Envoy a few cars down and say "neither will you - but I'll do it a whole lot faster." Note that her husband just installed a $500 front grill and brush guard, and $2000 shiny new chrome wheels. That total alone is probably what I'll pay for petrol in the next 5-10 years.

    She just shrugged and walked off.

    I've never really heard about this "cost in savings" hype until the Prius came about and I really tire of hearing it. I don't know of any car that actually saves you money. My priorities when buying are:

    1. Environmental
    2. Fuel Savings
    3. Creature Comforts
    4. Resale value
     
  4. Dave

    Dave New Member

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    Yes, there's definitely more than saving a buck in the short term. Thanks for stating your perspective so eloquently.
     
  5. Kiloran

    Kiloran New Member

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    The thing is, it's important to be honest.
    Many people are being given the impression that the fuel efficiency of the will save them money.

    If saving money is their only criteria for buying a car then a straight up lifetime cost of operation comparison is completely appropriate.

    If, like many of us, it is not the only criteria, a straight up lifetime cost of operation comparison is still useful for knowing how much those other priorities cost us.
    i.e. If the incremental cost of buying a Prius were 100% recouped by its reduced operation cost, the cost of our other priorities would be zero (pretty good deal).

    Having good numbers to compare helps us in deciding how green we can afford to be.
    B)
     
  6. Jay105000

    Jay105000 New Member

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    Brilliant!!!
     
  7. Trojan

    Trojan New Member

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    Brilliantly stated.
     
  8. jeromep

    jeromep Member

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    It was early media comments which started the "gas savings" vs. "hybrid premium" discussion. Which is a totally false discussion anyway considering that there is no hybrid premium and no other car has ever been viewed in terms of cost recovery based on low fuel consumption. Because the hybrid primium is a false concept created by an undereducated journalist writing for the popular motor press it is totaly uncredible and should be shuned by all.

    Then again another issue people have is the fact that the auto industry is not based on logic but on emotion. This then pervades and ruins normal logic used to make large capital outlays. The auto industry has done everything they can to convince consumers that cars are an investment; they are not. They are a durable consumable which depreciates and eventually has an end of useable life. Most products we use and buy are that way, no matter how much you pay for them or how significant or insignificant they are that is how it goes. Nobody talks about the resale value on a washing machine, however it is a durable good which should last a long time but will eventually wear out and no longer be useable.

    With this in mind, large capital purchases need to be viewed in the framework of Total Cost of Ownership. This is used all the time in the tech world to evaluate the quality and cost of a computer, printer or other technological device which requires a large capital outlay. TCO for a car is probably the best metric to use to evaluate the overall value of a vehicle. The price of the vehicle, plus all the associated costs to keep that vehicle in service, maintenance, fuel, insurance, licensing, repairs and such would be the best way to compare vehicles or justify their cost effectiveness.
     
  9. wilco

    wilco New Member

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    YES! I was going to write something along those exact lines, but you beat me to it. And well put too, I might add.
     
  10. skruse

    skruse Senior Member

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    It is not just "fuel savings," it is acknowledgment of limits and transition to constructive alternatives. Prius is PZEV, we pay for a portion of the cost of our air quality impacts up front (Prius still generates particulate matter as rubber rolls along. It is sustainability - operating a vehicle where the NimH batteries are expected to last 100k to 200k mi. It is forward looking realizing that we will make the transition to plug-in hybrid or full plug-in vehicles - powered by photovoltaics at work, school, church and home (less reliance on petrochemical companies, less maintenance, more cost-effective at the local, regional and national levels).

    Driving a hybrid is "modeling what we teach." Drivers of gas guzzlers have enjoyed ostentatious consumption for almost 100 years, with little or no regard for long-term cost or impacts. Hybrids are a "baby step" toward acknowledging long-term costs and becoming more self-reliant.
     
  11. Trojan

    Trojan New Member

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  12. aaf709

    aaf709 Ravenpaw of ThunderClan

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    I agree, but it's intersting how many people want to wait because they're going to get a tax credit in 2006 rather than a tax deduction in 2005. It looks like your #1 reason isn't even in the running.
     
  13. Zacher

    Zacher New Member

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    No, those are two different issues. 'Why' buy, versus 'When to buy'.
     
  14. aaf709

    aaf709 Ravenpaw of ThunderClan

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    They should be different issues, but if the why is important, then when should take second place. Look at:
    http://priuschat.com/index.php?showtopic=1...=0&#entry146397
    http://priuschat.com/Iand39m-bummedand33-t11888.html

    Note the theme? It just seems that if you asked, "Why are you getting a 2006 Prius?" the answer will be either tax credit or gadgets.
     
  15. jeromep

    jeromep Member

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    Adding my 10 cents.

    1. Superior technology (leads to other levels of superiority in emissions and economy, etc.)
    2. Fuel savings (duh.)
    3. Creature comforts (specifically digital dash, touch screen, overall interior space)
    4. Uniqueness (there is the illogical emotional part of the purchase)

    Sorry folks. I'm not an environmentalist, but I'm not interested in trashing the environment either. However, I do not feel compelled to make significant comfort and/or health/safety sacrifices for environmental causes.

    I suppose that should be put in perspective. I recycle my pop cans when I can find a receptacle. The same goes for newspaper. Office paper I generate is all shredded and that is recycled by the shredding company. I don't run any more lights than necessary in my house, usually only the light in the room I'm in. I use a grocery sack to carry my lunches until it is totally useless, or something leaks in it. I buy most food in quantity at Costco and then package it in non-disposable containers for my lunches, which then go in the dishwasher and I have a Foodsaver and vacuum pack other foods in the super strong Foodsaver containers for longer storage. I also bring silverware from home for lunch rather than using the plastic stuff at work. These are little things, and they allow me to retain my quality of life.

    If somebody offered me, for a moderate cost, solar panels installed on my roof and I could offset some of the cost of my power bill this way, possibly even selling power back to the grid when I'm not using it I'd go for it. I'm already thinking of purchasing a pellet stove insert to help offset my use of natural gas for heating, because the cost of natural gas is going up and frankly pellets are the waste product of wood processing and they are an effective domestic source of heat energy that are clean burning and burn very hot.

    I firmly believe that smart minds, progressive organizations, demanding customers and unaided economics (meaning no artificial government intervention, price controls, taxes or other activities) will propel us toward more economical, sustainable and earth friendly sources of energy and sustenance. The hybrid vehicle has been on the mind of researchers and engineers for many years. I can trace it back to the 60s in terms of prototypes and I'm sure it was on paper long before that. It was a matter of having a practical way of developing and mass producing effective systems control. Most great ideas happen before they can be implemented practically.

    I'm sorry those in the green crowd if this seem harsh and insensitive. But the idea of "greening up" consumer products is not to change people's behavior, which is really a reflection of their needs and wants, but rather to change the items they consume and use. The beauty of hybrid technology is that it does this perfectly. I still drive a car. It is still just as comfortable, powerful, safe, and drivable as any other car, but I'm using significantly less fuel per mile driven, paying less money at the pump, and I didn't have to change my life to do it.
     
  16. coloradospringsprius

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    Yes, but these threads don't support your conclusion that the environment didn't enter into people's purchasing decision. The people in these threads have already decided to buy a Prius - and environmental concerns may well have been a factor. Then it's an entirely separate question of whether to get the car now OR wait a little while and get the car for a couple thousand fewer dollars. With all other things being equal, it's a pretty rational decision to choose the option that saves money. Heck, they may even use the money they save for an additional environmental upgrade somewhere, like a more efficient furnace.
     
  17. Phyte

    Phyte New Member

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    Why am I going to buy a Prius? Simple. I pay $309/month for a 4runner limited(couple years old). Last month I spent $214 in gas. I figured at 50mpg, and a $388 monthly payment I'm actually saving money. By my calculations my monthly gas bill should go down to ~$60. Sooo..

    4runner
    $214(gas)+$309(payment)=$523/month

    Prius
    $60(gas)+$388(payment)+$20(insurance prem./diff)=$468/month

    I get a new(cool) car, AND save money each month. I know it's going to look a little weird sitting next to my Z71 suburban in the garage though :D Like many I'm waiting on 2006 for features and tax breaks.

    Phyte
     
  18. JKnight

    JKnight Member

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    jeromep wrote:
    If everyone were as "non-environmentalist" as you, we'd be in much, much better shape!

    Jan
     
  19. tripp

    tripp Which it's a 'ybrid, ain't it?

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    Ah the media. Is it just me or does it seem that the media is increasingly delivering sensational/confrontational "information". Watch the 9 o'clock news. It's mostly about murders/mayhem. How is the fact that some depressed dude shot his wife and kids and then commited suicide supposed to help me make informed decisions about the community/world? It's sad but completely irrelevant to me. The jornalist that wrote the article mentioned in this topic probably wrote it that way to get more attention. If he/she had actually researched the issue the article would have been quite different. Most likely it wouldn't have been confrontational. The bloke just set-up a strawman and then wailed on it. I'm really disappointed in the news media. They are not providing information and intelligent commentary just Jerry Springer style entertainment.

    The real reasons for buying a hybrid are, of course, the ones that you guys have already enumerated.

    Cheers,

    Tripp
     
  20. Zacher

    Zacher New Member

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    Well, let's put it this way: if the car somehow emitted as little as the Prius does, but had to use special fuel resulting in no fuel savings to me, I would still buy it. Driving while polluting less is worth a price to me.

    I thought the original question was mainly : 'Are you buying a Prius, as opposed to a non-hybrid car, because you want to spend less money on gasoline?'