Hybrids not worth it says Journal

Typical conservative viewpoint from a respected news source. Hybrids are not worth it.

Much of the same, mentioning issues with battery's and the expence while downplaying the warrenty on all our cars.

I like the chart the best. I never liked the prius-corolla compare, they just are not the same level of car. And where does the Camry XLE start off at 22,000? 12 years to break even? Someone didn't do his homework.

And most readers will see this and then laugh next time they see a camry hybrid, thinking how long it will take him to earn back his waste.

 

"1.6 YEARS TO BREAK EVEN" - Lexus GS430 vs GS450h!

LMAO!

One empirical problem with all of the 'payback' analysis is the presumption of 15,000 miles per year. But about half of all drivers drive more than 15,000 miles for us, the payback is much sooner. I'm thinking of Jesse who has over 326,000 miles on a 2002 Prius.

A subtle but equally severe problem is the mixing of capital and operational funds. We buy a car using capital funds, which becomes a fixed expense. The operational expenses, what we spend using the car, may come from the same paycheck but this is an optional, operational expense.

But the biggest problem is identification of the 'compatible car.' The usual problem is they choose a stripped down model without compatible features. In this case, it is worse because the prices from Toyota's web site:
$16,415 - Corolla automatic
$20.950 - Prius (automatic)
---------
$4,545 - web site difference

From the WSJ article:
$14,926 - Corolla WSJ
$22,110 - Prius WSJ
---------
$7,184 - WSJ difference

So I sent the following e-mail to the author:
Bob Wilson

 

This whole concept is wrong, but we all know that. The correct way to analyze the problem would be as a business owner does in purchasing any asset. Get out a spread sheet and list all the costs over the expected life, because these costs will have to be incurred, then choose the less expensive one. *( spreadsheet analysis to follow ).

Of course choosing the correct comparison between assets ( tools ) is the first step. A carpenter might do a comparison between a hand saw and a power saw and come to the conclusion that over the life of building 3 houses the hand saw is far less costly, even if it does take twice as long to build the three meaning he lost the revenue from building 3 more.

As a 5-door hatch the closest vehicle to a Prius is a Matrix XR with all the airbags and VSC. The closest sedan sizewise is the Jetta.

But for the absolutely lowest cost then a good USED vehicle will do the trick, but so will a hand saw. BTW do you have the WSJ link or was it only in the printed edition?

 

The correct way to analyze the purchase of one vehicle ( asset ) or another, say a Prius or a Matrix XR; say a TCH or a Camry 4c XLE: say a T2M or a Tahoe 2WD ICE.

Using the parameters below we can do a business analysis similar to what every business, small or large, does when considering a significant purchase
Useful life: 5 yrs, 7 yrs, 10 yrs
Asset purchase price & Avg Combined Fuel Economy ( EPA ):
1) Matrix XR ICE........ $20,820 @ 27 mpg
2) Prius Pck #4......... $23,700 @ 46 mpg
Miles driven annually: 15000
Avg Annual Cost of fuel per gal ( $0.50 increase each yr up to 10 yrs )
$3, $3.50, $4, $4.50, $5, $5.50, $6 $6.50, $7, $7.50
Total cost of owning and driving these two vehicles is:
Purchase price + Cost of fuel - Resale

A simple spreadsheet will give these results for the total cost to purchase and drive the respective vehicles:
5 yrs .. ( drive for 5 yrs and resell at 33% of MSRP )
Matrix costs $24,600
Prius costs $22,500
7 yrs .. ( drive for 7 yrs and resell for 10% of MSRP )
Matrix costs $35,700
Prius costs $31,700
10 yrs ..( drive for 10 yrs and give it away for $0 value )
Matrix costs $49,400
Prius costs $40,900

In none of the scenarios does the hybrid version cost more than the ICE version. In addition there is likely to be significant Fed Tax Credits for certain of the hybrids, not the Toyotas, over the next 2-3 years to encourage both the buying public and the manufacturers.

 

I've said this dozens of times in my life, but I'll say it again.

Asking about payback time is beside the point. If someone gets a Altima 3.5 engine instead of the base Altima (which costs about the same amount more as the Altima Hybrid) does anyone sit there and calculate the person who bought the 3.5 liter engine's "pay back time"? Or ask about the "pay back time" of a sunroof, or a 6-disc CD changer?

I bought a hybrid because I hate oil companies, I hate polluting, and I try not to. I have had my hybrid for approaching 4 years, and I've only driven 28,000 miles. I bought my car to vote for the technology. When I bought my car, the CEO of GM said Americans don't want more fuel efficient cars. Maybe spending about $3,000 extra for the car was an expensive way to prove a point, but thanks to all of us, with a little help from increasing global competition to get at a supply of oil that might be physically limited to about 85 million barrels a day, you know... the point has been made.

And finally, I paid 18,600 brand new for my car, and the blue book value is 14,000. The WSJ can put that in their pipe and smoke it.

 

Hi,

I contacted the reporter and his data source is "Edmunds" based upon what they report as the actual sale prices. The manufacturer recommended price is what we have on the web site. But this still doesn't solve the problem of comparing the standard and optional features.

We have an independent source, Ebay completed sales, that will allow us to look at low mileage Prius and Corollas and do a features comparison. The completed listing usually stick for over 30 days so it may take a while to get a significant sample set. Still, it would provide what Edmunds lacks, the full features of the respective vehicles.

Still, if the Edmunds data is accurate, it means that in spite of the increased manufacturing and the disappearance of waiting lists, our Prius still command a higher sale price than the list. This means we need to track the actual sale prices.

Bob Wilson

 

Rich, white, Bush-conservative CEOs aren't he ones who buy hybrids anyway. They buy Caddilac Escalades because that's what Rush Limbaugh drives.

 

Bob, I know this not be a fact since I sell them daily. Edmunds does have it's TMV or True Market Value but the fact is that Edmunds sells nothing. they don't have to meet and convince a buyer face-to-face.

Two better sources for actual sales pricing data is Laurel Carmax in Laurel MD and FtizMall also in MD ( I don't work for either but I do compete against them from a distance ). Each has their entire inventory online, each with it's 'driveaway' price. Then it's just a matter of comparing similar vehicles and equal equipment.

 

Thanks! I'll check them out. This may solve the option comparison problem.

In the meanwhile, I took my own advice and captured nine Prius and nine Corollas from Ebay completed sales. What I found were the following averages:

$21,966 - 14,474 miles - 14 options - Prius
$13,516 - 11,041 miles - 6 options - Corolla

The Corolla has an $8,450 price savings; 3,433 fewer miles; but 6 fewer options. Interesting but one of the priciest Prius options is a California HOV sticker that allows a single occupant Prius in the HOV lanes. But as I pointed out, the Prius comes with many more standard features that are seldom found options on the Corolla.

An accurate comparison would option equivalent Corolla and Prius.

Bob Wilson

 

Bob,
Your EBAY numbers point out one thing -thwe Prius holds its value very well.Those Prius sold for an average of $24000 new and they are still worth $22000.The Corollas does well also-no surprise.
We paid 23600 for a 2006 pk4-roughly an average Prius-in April 2006-when Prius mania was still high,and prices were still high(tax credit).Not so long ago-3 months- you could get a Prius for $1500 off mrsp fairly easily.
A $5000-$6000 actual drive off difference for roughly equivalent Corollas-Prius is about right, but vs the Matrix(more more like a Prius) it is more like $3500 at most,and the Matrix is about 2mpg down from the Corolla.
Charlie