Hybrids won't save drivers money, Consumer Reports (April 2006)

The thing is, it appears they deliberately changed the facts. First their 5-year cost of ownership assumes the first 3 years that gas is $2/gallon, but they don't tell you that. Then they quoted a higher-than-average depreciation hit for hybrids, based on research by Vincentric. I checked out Vincentric, they do analysis on the total cost of a car, it appears the analysis is available to people willing to pay for it. But their free report (press release, basically) in January gave high marks to hybrids of all classes, due in part to gas savings but mostly to their lower than average depreciation hit! This is exactly the opposite of what Consumer Reports says they say!

It is my impression that CR deliberately lied to make a critical point in their article. I've respected CR for years, but I can't see any way around this. I e-mailed Vincentric to get their impression on this (I also sent a nasty, but reasonably polite, letter to CR, as I described earlier in this thread). In the meantime, check out this page:
http://www.vincentric.com/bvia/midsize_under_23000.asp

nerfer

 

I don't always agree with CR, but don't feel they write things without any basis. How many times have they been sued by companies, and how many times have they lost? If they can defend their method to a judge and jury, works for me.

Malorn, if you don't like their survey of to determine reliability, how do you suggest they do it? Ask the manufacturers for troube reports? They don't publish any vehicle without a statistically significant sample. You can always argue it's not a representative sample unless they ask everyone. The US Census tries to do that and they're criticized too.

I don't know why this article is such a big deal anyway. We all know hybrids from existing models, like Accord, Escape,etc. cost more. Prius doesn't have as easy of a comparison. Haven't we all stiuplated there are better economic choices than buying a Prius, like a much cheaper used car with good mileage?

 

Well ..

I bought the car to advance and encourage this hybrid technology that I think is brilliant.
That it has turned out to be a smart money decision, is just icing on the cake.

Barring accident, I hope for 500,000 miles (including mod to plug-in down the road).

Then, I'll sell it as a 'classic'

 

CR has a severe calculation error in their cost comparison of all-gas vs. hybrid cars. I just got the mag today and notified them of this error. They are double-counting the price premium of hybrids over the all-gas counterparts (adding in depreciation variances AS WELL as the price premium diference). Correcting for this, the Prius and Civic hybrid are moderately less expensive than their all-gas counterparts. Other hybrids are still more expensive than their all-gas counterparts though. I would have expected better from CR :-(

 

They are also assuming EVERYONE pays a premium. Most of the dealerships I contacted (outside of Austin, where Prius' are at a premium) sell for MSRP. That's what I paid for mine - carrying in my Toyota.com build-you-own car sheet when I went to pay and pick up. There's no way CR's numbers can be correct unless they are really using "fuzzy math" and/or focusing on markets where the prices are jacked-up.

 

PS - Do they really think gas is only going to go up $1-2 FOUR years from now? They're not smoking hash, they're smoking crack!

 

Right now here in Central Fl, I just filled up my prius it cost me $22.00 for 11gal.
and $37.00 in my tundra, thank god I only fill it once a month at SAMS..

the cheapest I have seen it was at a little independant shop & rob $2.34.9 per gal.

 

The "premium" to which CR is referring is the premiun of a hybrid purchase price over the purchase price of an all-gas counterpart - not necessarily a premium over the MSRP (sticker) price of a hybrid. For instance, the MSRP for a Civic hybrid model is several thousand dollars more then the MSRP for an all-gas Civic. Same is true for the Prius compared the the Corolla (which I know is not the best comparison, but those are the two models CR compares). And, hybrids tend to sell for MSRP but all-gas models tend to sell for below their MSRP, making the hybrid cost premium over their all-gas counterparts even more than the difference getween the MSRPs. Here's more detail on CR's calculation error:

They are in essence double counting the purchase price premium when they take the increased depreciation as a cost as well, instead of using the residual value. The Prius and Civic hybrids are actually less expensive than their all-gas counterparts once this error is corrected. For other models, the hybrid versions are still more expensive than their all-gas counterparts. I would hate for people to be dissuaded from purchasing hybrids based on this calculation error. Also in California, include the value of your time saved by using carpool lanes (for the time being) and you've definitely got to get a Prius or Civic hybrid, based solely on financial considerations.

Here's an example showing how Consumer Reports' numbers are incorrect for the Prius (numbers are similarly off for the other models in their comparisons):

Their incorrect numbers for the hybrid Prius vs. all-gas Corolla:
Purchase Price Premium -$5,700
Extra Sales Tax -$400
Hybrid Tax Credit $3,150
Fuel Savings $2,300
Extra Insurance Cost -$300
Extra Maintenance Cost -$300
Extra Depreciation Cost -$3,200
Extra Financing Cost -$800
Total Extra Cost -$5,250

This calculation is incorrect! So let me get this straight, not only am I getting hit with the entire cost of the purchase price premium of $5,700, but I am also getting hit with an additional $3,200 in depreciation on top of that cost - I think not!

Here's the correct calculation:
Purchase Price Premium -$5,700
Extra Sales Tax -$400
Hybrid Tax Credit $3,150
Fuel Savings $2,300
Extra Insurance Cost -$300
Extra Maintenance Cost -$300
Extra Residual Value $2,500
Extra Financing Cost -$800
Total Cost SAVINGS $450

Notice how I replaced the extra depreciation cost line item with the extra residual value line item instead. This is saying the Prius will initially cost $5,700 more than it's gas counter-part, but the resale value at the end of five years will be only $2,500 more. The difference between these two numbers is the $3,200 which CR is calling extra depreciation cost, but they are treating this number incorrectly.

 

Hi Marc:

I think you are on to something. I thought through the calc assuming equal percentage depreciation, but different purchase prices. Assuming equal 40% depreciation over 5 years for both cars, 15K corolla, and 20K Prius, I get:

6K depreciation on the Corolla, so capital cost $9K
8K depreciation on the Prius, so capital cost $12K
So at this point, the Prius costs $3K more.

Then, subtract the $3150 Prius credit, petrol savings, maintenence, and insurance, and the Prius is quite a bit cheaper.

I am too lazy to figure out what kind of depreciation difference would be required to break even cost wise, but it looks on the face of it to be pretty substantial.

Cheers -- Eric

Addendum: depreciation numbers error fixed

 

we're currently paying the converted cost of $3.06 US per US gallon for regular 87 octane. So I guess I'm not saving anything by owning a Prius. The highest we had it here was $3.88 US for a US gallon last fall. I'd expect it to be that by mid summer again this year.

 

I originally started looking at the Prius a few years ago after reading good thing about it in CR. I believe that in this article they have made glaring errors but they do still recommend the Prius. I bought the car for more than simply saving money.

However, if I don't stop ordering mods the article may end up being correct in my case.

 

I finally had a chance to read the article this weekend and I was appalled. They make it sound like I should invest money in Corollas not the stock market. The issue isn't even consistant. The Prius is the most reliable... but it will cost you more; it holds its value the best... but it depriciates more... WHAT NONSNESE IS THIS?!?!? This from the publication that charges itself with informing and educating the consumer for he or her protection. Are they transforming themselves into a supermarket tabloid? Does anyone know of an unbiased product review mag? Clearly CR isn't. Almost $6K more expensive than the high-end Corolla, please. Good thing they included the tax break, otherwise it would be $9K! Boy, I sure would like to find the dealership that is giving (and I mean giving) them loaded Corollas for $8-9K a pop -- I would invest. Who really wrote this article, GM?

 

I thought EVERYTHING CR writes could be booked as gospel.

Maybe this was the first time they had the end in mind before they wrote the article.

Maybe this was the first time they had an agenda and wrote an article to fulfill that agenda.

Maybe they just made some glaring errors in compiling their figures.

Maybe I have a bridge or two i would like to sell you.

 

No, most of us tend to research the "facts" and draw our own conclusions. Perhaps that is why most of us have some sort of advanced degree. You're confusing us with GM owners.

The best thing about my 2000 GMC Sierra? Getting rid of that POS.

 

Jayman would you rate the Prius as the most reliable car on the road?

When you say research the "facts", what exactly are the "facts" that CR publishes? I am interested to see a list of the "facts" you gather out of CR?

 

Harsh, Jayman. Harsh

I, for instance, do not have ONE SINGLE THING bad to say about GM cars I have owned.
And I am confident it will stay that way in the future, too.

 

Oh please, grow up. CR makes up a very small percentage of research I do when looking at a new vehicle. I go to my local library and look up statistics on recalls, accident and theft loss rates, used book retention values, etc.

Actually, the only time I bought a vehicle by ignoring that research was with my 2000 GMC Sierra. I got burned. Never again.

 

You're entitled to your opinion, and I'm entitled to mine. Perhaps my GM ownership experience was far different than yours:

First week of ownership: puddle of gear oil on the garage floor. A bad rear pinion seal from the factory.

Many problems with the AutoTrak transfer case, actually with the mode select switch on the dash. I used to have a cabin at the end of a logging road, so I *needed* a 4wd to get in and back out. The first time, after 5 months of ownership, I pressed "Auto 4WD" while leaving my cabin, all the LED's on the mode select cluster went blank, and "SERVICE 4WD" appeared in the Driver Information Center in scary amber letters.

It turns out when there is a fault with the AutoTrak, it reverts into 2wd mode. I got stuck on the first steep hill. After getting a tow out, the dealer determined it was a bad front reluctor speed sensor *and* a bad switch. The switch failed a couple more times in warranty, and once out of warranty.

I had finally had it with my GMC Truck dealer and went to another dealer. The mechanic took me back to my truck and pointed to the connector for the switch: the previous "repair" attempts had buggered up the connector, that was why the switch kept failing.

What else? Those "drum in hat" parking brakes needed to be adjusted every 4-6 months or they wouldn't hold the empty truck, let alone the trailer hooked up. Just off warranty I was told they needed replacing. They also conveniently found leaking rear axle seals, around $900 for that job.

The motor picked up a rough idle, to the point the whole truck would shake at a red light. There was a TSB out that required a reflash, but the first time the idle became *worse.* It took them a couple of tries.

My Vortec 5.3 started that infamous "piston slap" - or whatever they call it now - at 5,000km. I could never get more than 3,000km per quart of oil, GM Canada claimed 800km/litre was "normal."

I was sweeping out the stepside box at my hobby farm and made the mistake of standing on the open tailgate. One of the cables let go and I fell down, landing on my tailbone and buggering up my back for a couple of weeks. About 2 months later I received a recall notice for defective tailgate cables. My 1984 Ford F-150 has the original tailgate cables, and they still seem strong

The weatherstrip on the driver side rear suicide door started leaking, took them a couple of tries to fix. Those DRL bulbs never lasted more than 8 months.

So unless I had the only junky GMC Sierra ever made, I doubt I'm being too harsh. Especially when you consider the $45,000 MSRP Cdn of that truck, it was nothing but garbage. I had old clunkers in college that were way more reliable.