Longer road to breakeven

Same old story... smog-related emission reduction is given no value and the "comparable" vehicle is questionable vague reference.
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Hi All,

The change in Prius economics is that it wont payoff in the first five years any longer assuming $1.53/ga gas (lowest price seen on the drive home yesterday). Although I probably have broken even on my car since Feb 2006, approxiimately 2 years ahead of plan, as gas went well above my average estimate at time of purchase. But does that matter? Resale on a Prius is still a larger percentage than anything out there. Because the HSD does not wear out like an automatic transmission, and second generation batteries have 150 K life, and are cheap and easy to replace in comparison to an automatic transmission and one does not even have to consider a brake job to well beyond 100K (including the second hand car buyer). So, these things pay the Prius owner either in not having to buy a new car to get high probability of reliability, or a higher resale price if one does sell their Prius. Besides the extra security for the next gasoline price bubble, probable gas/crude oil tax increases (have you seen those potholes out there - Yousa!), and doing your part to reduce oil imports. And I sure like not having to gas my car up every week.

Why did economically successful people buy Mercedes Benz in the 70's and 80's? It was not really a status thing (although it is now - Mercedes reliability has tanked). It was because the cars were very reliable in comparison to what was out there. In the end these cars were actually cheaper to own over 10 or more years, if the imperative was reliable operation. A 10 year old 1974 Mercedes in 1984 still had trade-in value. The alternative being two or three Detroit cars in the same period, again assuming reliable operation as the goal. This is where we are with the Prius at this time.

If gas goes back up, the Prius will again be the obvious economic winner on the first 5 years economics again. Until then, its the smart choice over the life of the car.

 

They always campare to some other cheap car like a yaris. When I was in the market for a new car, it had to be a station wagon or hatchback for our deliveries that we make. The Prius was the cheapest one that fit the bill.

 

Again because this was written by a dumb writer with no knowledge of business the whole concept is misunderstood with terminology misused. 'Breakeven' is a very specific accounting term.

It has nothing to do with autos and their usages. Autos are depleting assets that lose value over time until they're worthless. Unless they are being used in a business generating revenue there is no such concept as 'breakeven'.

The only valid concept is that vehicles accumulate costs over the period of ownership then they are sold or retired. Add up the total costs and subtract the tradein or resale and that's the NET COST. Compare the NET COSTS of two or three vehicles under consideration and make a decision based on this criteria.

But how would one expect a writer with little or no expertise in any given field except putting words together to understand such a basic business concept?

 

In the first paragraph it says Priuses have become less economical with lower gas prices. LOL what?? I guess she/he doesn't realize that good fuel economy is good fuel economy, and that gas prices going down increases overall economic value. That is, it cost 10 cents/mile to drive the Prius with $4/gallon gas; now its about 3 cents/mile. Thats a freakin' steal right there. It costs me about $4.20 to drive 150 miles to Austin; in my old Jeep that would be 12 bucks, thats quite a difference!

 

$12 fill up vs. $30 fill up plus 400+ miles per tank vs. 335 miles per tank. Nuff Said.

 

It's interesting that this thread keeps popping up again and again. How come you folks keep getting so irritated by what some uninformed critics publish?

Did you buy your Prius for a good reason or reasons?

Are you confident in your choice?

Did it make sense and provide you with what you deem to be good value?

Is it reliable and working out well for you?

In my case, the answers to all of the above questions is YES! I could care less what the uninformed think. And even better, if it helps keep Prius demand more closely balanced with supply, then those who think like we do, will have a fair shot at getting one without a months-long wait or paying more than list price like many did a couple of years back.

The media is rife with half-truths, bold inaccuracies and downright lies. There's not much point in getting irate about it. We know the truth and that's what matters. This forum lists the benefits as well as the shortcomings of the Prius and not only serves well to educate, but also provides useful input to automakers on how to satisfy "Voice of the Customer". Just the fact that the Prius is still brought up (ten years after its introduction) in car evaluations, conservation articles, energy articles, resale/reliability articles, best buy articles, and cutting-edge articles is proof that the realization of the concept is current, valid, state-of-the-art and revolutionary. I couldn't care less what the media prints from time to time about the Prius.

I like my car...that's my story and I'm sticking to it! I smile every time I get in the Prius--that's never happened before...not with any car I've ever owned.

 

I believe that a big part of the reason people keep publishing irrelevant garbage like that is that they want to justify their gas-guzzling road-hogs. Meanwhile, the price of gas, while low now, is not going to stay that way. The bureaucrats are already eyeballing increasing gas-taxes at the federal level, and if that happens and then the price of crude begins to rise again, which it will, the pain at the pump will be worse than it was in July. It would be nice if gas were to stay at the $1.50 level for the next five years, but it ain't gonna happen.

 

Regardless of lower gas price, a penny saved is always a penny earned.
However; the subject title of this thread is more credible to those who paid WAY over MSRP just to getting a Prius.

 

I didn't buy a Prius to save money (though I probably will eventually), but I think gas prices going back higher is an inevitability when the economy recovers.

 

Oil prices went too high ($150) due to speculation, and are now too low (<$40) due to the same reasons.

On the fundamentals, current oil prices are destroying investment, not just in unconventional fields (think oil sands, very deepwater) but also in refineries and the rest of the oil supply chain. $40 oil plus the recession and credit crisis are destroying investment in oil conservation and alternative fuels technologies (solar and wind struggling for funding, Prius sales down 50%, etc). It is also pushing the non-OPEC oil producers (Russia, Venezula) closer to OPEC and driving real production cuts for the first time in a decade.

The recession won't last forever. When it ends, oil demand will resume its prior growth rate, supply growth will be lower than it would have been, and refinery capacity will be tight again. Meanwhile, hedge funds and the like will head back into oil speculation. I think its very likely that oil will be <$100 again in 2 years.

I'm not a blind oil bull, I shorted oil from $140 to $70, but I think those buying 14 mpg SUVs will regret it again.

 

An uninformed critic is a USENET posting, a troll or some nonsense web forum. Print media, such as the Boston Globe, are expected to do some fact checking. When they make a mistake, a well documented reply can lead to a correction or retraction. At a minimum, accurate criticism stops the or suppresses the nonsense.

We also know that newspapers and TV news often copy each other. If we let this nonsense stand, it becomes "common knowledge" and much harder to defeat. It is like rolling over for a bully, they will come back.

No, I don't see malice as much as ignorance. So to the extent that one loves truth, the facts and data, it is our duty to answer. We don't need some blanket "the media is corrupt" but rather to reach out and offer non-emotional, fact based, correction where needed.

Bob Wilson

 

I've mentioned before that when a shortage starts to develop, what happens is not a monotonic increase in price, but a period of significant price oscillations. What you described is one of the mechanisms of this oscillation. Very good post.

 

Whaaaaah ! I used to pay $37 to travel 600 miles in the Prius ... now I only pay $18 to travel 600 miles ... whaaaah!
Sorry, I must not get it.