One of the BIG assumptions in the CR study, is that the car buyer is buying a new car for the first time. They do not take into consideration the savings derived from getting rid of a less efficient older car.

I the first year of owning my 2005 Prius, I have saved $1645 in gas alone compared with the car I replaced (an Audi A4).

When I look at the depreciation in the first year, I lost $2800, but compared with my old car Which lost $5000 per year, I saved another $2200. ($5000 - $2800 = $2200)

When I did my initial analysis before buying my Prius, I determined that the savings over the 10 year life of the car would actully pay for a new one. [($1645+$2200)*10 = $38450]

Of course all this was comparing my savings based on a previous expensive car.

As a side note, many wealthy people will tell you (maybe!) that the real issuse is CASH FLOW not abolute $$$. Any way you can increase incomming cash flow while reducing outgoing cash flow make all the difference.

Maybe I am missing something here but it works for me!