Wanna buy a Prius? It'll cost you

A day late, and I'm $2000 short!

I just accepted an offer of a bit over $24K for my '06 base with 20K miles from my insurance (it was totaled) since I had a tough time finding good documentation of the pricing crises.

Oh well, the offer covers my out the door on a new Pkg 2 (which I *should* be getting July 2) so I can't complain too loudly.

 

The reporter's comparison of Civic and Prius is, on the surface, valid. Civic is a good car. The hybrid version works differently than the Prius. But in reality they are two different machines. Hard to compare apples and red fruit.

 

Curiously, the reporter advises waiting before buying a Prius because "the price of gas may go down." He neglects to point out that if the price of gas continues to rise, the cost of a Prius will go up even more. And he claims that several companies are coming out with cars that will get even better mileage than the Prius, but he fails to acknowledge that if such cars do appear, and gas continues to go up, they, too, will command hefty premiums. I'll bet if gas hits $6 a gallon, even my Zap Xebra will start drawing attractive offers.

 

There's another factor regarding buying a Prius (or other high-mpg) car. Even if prices go down to $3, that is still expensive against three years ago. Compare expense of driving a Prius at any given moment -- you're still better off with a higher-mpg car regardless of pump price. We tend to accept a lower price of fuel only by comparison. I firmly believe that a high price for gasoline is 35 cents a gallon, so anything above that is too expensive. I just can't do anything about it, except carp.

 

Except that at 35 cents a gallon, a $15,000 car that gets 35 mpg is cheaper to operate than a $25,000 car that gets 50 mpg. A Civic or a Corolla is an excellent car. If your bottom-line concern is the cheapest possible transportation, a Prius becomes the cheaper transportation only when gas reaches a certain price (dependent partially on how many miles you drive during the life of the car).

I was not looking for the cheapest transportation when I bought my Prius in 2004. But the cost-per-mile calculation is driving the present market price of the Prius, and as gas prices continue to rise, the market will continue to reflect this calculation.

 

Sorry, Daniel, gotta disagree with that. It's only a CPA who would include (as I assume you do) purchase price in operating costs. Just look at the gas costs for now. If I pay 35 cents (or $3.50) a gallon for fuel, I will pay less if my car gets better mileage than your car. Doesn't matter if mpg are 25 vs. 26. I don't buy a car or a house or a lawn tractor based on rate of return. I buy them to use. And if it works out, I want to pay less for use when I buy a given product. Sometimes I think the faux economists on PC and elsewhere make things too complicated. That, or my simple mind can't comprehend those details.

 

Really????? So if a $300,000 car got 100 mpg you'd buy it because purchase price doesn't matter? Only ongoing fuel price matters? Perhaps most Americans are too innumerate to accurately calculate lifetime cost per mile, but they certainly understand that the purchase price is a factor. In fact, when I bought my Prius, all the Japan haters were talking about the fact that you would not save enough in gas cost to pay the difference between a semi-luxury Prius and an econo-box. Now that gas is $4 a gallon and rising, people are willing to pay a premium for a Prius because they understand that the extra cost can be amortized against the gas savings.

 

Apples and carburators comparison though

I understand what you're saying, but I've heard lots of people compare a new Prius to a new Yaris making the same point...
But it's really a false comparison.
The Yaris and the Prius are significantly different classes of car. The Prius really does a pretty good job of making you feel like you're driving a nice car where the Yaris really lets you know that you're driving an ultra econo box.

For most people the choice when buying a new car isn't between a $15k car and a $25k car... it's between different cars around the same price.
If you're going to spend ~$25k the Prius is about the best bang for the buck.

 

No, I didn't say purchase price isn't a factor. I just don't accept that purchase price is a factor in operating cost, which entails fuel, maintenance, repairs and normal replacement, and probably some other factors. But not capital outlay unless, again, you want to use generally accepted accounting procedures for some specific purpose.

 

Normally, that is until this day and age of rocketing fuel prices, the most expensive 'cost' of any vehicle purchase is the depreciation. That is always an expense any way you look at it.

Essentially you buy a such a depreciating asset and it becomes worthless at some time in the future.

 

The problem with "depreciation" is it assumes you are going to sell it for something above scrap.

If you take a $30k car, drive it 200k miles and say it costs you in this example $40k in fuel and repairs, giving a total cost of ownership of $70k for 300k miles or a total of $.023333 per mile

If you take a $25k car, drive it the same 300k, fuel and repairs of $60k for a total cost of $85k per mile cost of $.28333 per mile.

If you assume that in both cases the value of the car is near zero, then clearly the former example is cheaper. Higher first cost, lower total cost.

My numbers are just made up, use what ever numbers you wish, but given roughly equal purchase and repair costs AND a residual value of zero, the greater MPG car will win hands down.

The problem with depreciation is, people who trade often usually loose as they tend to by high and sell low. Those that buy and hold win big time! I've bought one new car in my life,,,, 07 Prius, paid top dollar and expect to drive it until it's value is close to zero,,,unless a new car comes along that can do enough better financially and environmentally to make sense to change.

Icarus

PS I'm still driving my '82 rabbit pickup truck 25 years old, still running with untold miles on it. 34mpg, it is the only small work truck out there that can do that. Would I like to have something with airbags, and quiet and, and, and,,, sure. Would I give up 10 mpg for the 4k I drive it as a work truck, PLUS the $10 I would have to spend to replace it? No way!

 

Dallas Morning News Article today

We're now $5000 over sticker at some Dallas dealers.