2013 Hybrid Cost of Ownership Analysis & Fuel Cost Comparison!

Uh, comparing a CT200h against a IS250 as its all gasoline counterpart???

 

• Prius Liftback not on "best" list because they assume Corolla is the ICE counterpart
• Are they assigning generic depreciation curves whereas Prius is low depreciation?
• I agreed with their Camry vs. Camry Hybrid cost difference...I use the same $delta
• Looks like they assume 7% tax equally but some states tax more and hit hybrids more (eg; VA)
• Overall this study is most interesting for hybrid models which have equal ICE version, otherwise it is comparing apples and oranges
• They use 15000 miles/yr for comparison so that assumes fairly heavy use
• I try to use Fuelly for the MPG differences not sure what they do

 

They assume 15K miles per year and 5 year cost of ownership...so a total of 75K miles. The average car on the road is > 11 years old.

Another study that a 5th grader could have done for a homework assignment and done a better job.

Mike

 

Where is the Prius Plug In?

 

They are a different class of vehicle and not directly comparable to ICE vehicles because they use another source of energy besides gas or diesel.

 

It's a crying shame they didn't figure EV's into the mix. Even if there aren't an exact counter part for all of them - there are for many . . . and the remainder have similar models to base comparisons on. Oh well.
.

 

Aren't you assuming it's still the original owner at 11 years?

 

Did they really combine cost difference and depreciation? Isnt that double counting?

 

A couple of ways of getting there....

You have an option to buy something brand a for $20 that will depreciate $8. Or buy brand b for $25 and it will depreciate $9. In the first case you'll recover $12 of the $20. In the second you'll recover $16 of the $25. So you need to count the difference in depreciation (9-8=1) and the difference in cost (5), not the raw numbers. And count the opportunity cost of spending the additional $5 plus any additional financing costs to borrow the extra money.

You count the raw costs only if you factor in the residual value at the end.

The numbers come out the same.

 

These studies all seem to choose 5 years for ownership duration -- I presume because that is where data is available. And yet someone who prioritizes saving a few thousand dollars over 5 years is irrational if they flip the car so soon. Cars with higher purchase costs have a built-in disadvantage in these comparos because of the skewed depreciation the first 5 years.

So ... who is the relevant target audience ? I say nobody.

This is why I have always argued that expected car lifetime is a much better metric for rational people looking to save money out of pocket. Over 300k miles a Prius consumes about 6000 gallons of fuel while a Corolla consumes about 8571 gallons. The ~ 2500 gallons is the hybrid advantage, multiplied by whatever cost of fuel we care to anticipate. I use $3.5 - $4.5, and therefore calculate $8750 - $11250.

Looked at this way,

• No less expensive car on the road
• Much more versatile, safer, and higher quality than Yaris or Corolla
• Much less pollution
• A lot less money to OPEC

It's a no brainer for people able to perform simple arithmetic.

 

And the Prius with Corolla, c with Yaris, and v with Matrix.

Looks like they matched them up based on passenger cabin space. Using fueleconomy.gov specs, they match ups are within a couple cubic feet. The Yaris and c are close in both passenger and cargo space. The CT has the advantage of being a hatchback over a sedan, and the v is a class size larger than the Matrix. So the CT, c, and v benefited from their match up choice.

The Prius is surpasses the Corolla in cargo, but the Corolla's price just whoops it. The Matrix would be a better choice. The cost difference might drop by $3000 then. A lot, but not enough to change their lists. Then what do you use to compare the v, the Venza? The difference in cabin space would skew that.

 

Prius should have been compared to the Matrix, similar cargo space. The Prius V really has no counter part, but it is much closer in cargo space to the Venza than the Matrix.

 

I wonder how careful the authors were in matching feature sets. And even if they found good matches the exercise cannot say whether a customer *wants* the added features or is forced into them.

 

..or what I do is just assume there is a ~+$4000 cost differential for the hybrid and fabricate an ICE Prius (which if Toyota is reading these posts, as some think, then Toyota is well underway making me an ICE Prius).

 

I think that is what CR did a few years ago; and yes, that is incorrect accounting. It is usually not double.

A little algebra should clarify:
C1 is the cost paid to purchase car #1
C2 is the cost paid to purchase car #2
D1 is the depreciation of #1 in percent by the time it is sold
D2 is the depreciation of #2, in percent by the time it is sold

So total cap costs for #1 is C1*D1
and cap costs for #2 is C2*D2

IF depreciation was equal between the cars and 50%, then the total cap cost of the less expensive car would be 1/2 the difference between the purchase cost difference. Other calculations come into play, like opportunity costs of the higher purchase price or money spent at the pump. Perhaps most variable is the resale price of the Prius as fuel prices go up and down.

 

This article was fun to read. The math is obscure but the authors are clear in stating the variables in English. They wished to gain insight into how fuel prices affect consumer behavior in car choice. The answers are in the 'who wudda thunk!?' category, but the reasons may not be obvious or intuitive to people not involved in marketing.

 

If they went by passenger space, as I suspect, then the Matrix is the best choice for both. The Prius v has a larger cabin, but it is closer in volume to the Prius and Matrix than the Camry. Yes, it does have much more cargo space, but cabin spaciousness is something a person will note every time they get in the car.

 

Agreed, but think the matrix is closer to the Prius than the Prius V.