Consumer Reports Admits Error

Another Analysis of Hybrid vs. Conventional Vehicle Costs…

Consumer Reports mistakenly computed the 5-year hybrid vehicle costs in their April 2006 issue, and these mistakes were particularly egregious for the Prius and Civic hybrids. However even the “corrected†figures now noted on the Consumer Reports website are still seriously and significantly flawed with very questionable assumptions negative to the hybrid evaluation.

Basically what is the comparison vehicle of conventional power for a Prius? What the comparison vehicle to a Honda Civic hybrid is totally obvious—it is the conventional powered Civic. But the Prius is a special total package, and it is a MID-size car not a compact. It seats 3 adults in the back with reasonable leg room and it has a sizeable cargo capacity even with adults in the rear seats. Thus a most reasonable comparison vehicle for the Prius is not the Toyota Corolla (a compact car) but the Toyota Camry (a mid-size car too).

Taking the Camry as the comparison vehicle produces the following major difference:

Toyota Prius (2006) Camry LE (2006) Hybrid(=/-)
Cost: $22,305 20,955 (both with automatic) -1350
Sales tax -108
Insurance -300
Maintenance -300
Extra finance cost -200

Federal Tax Credit $3150
Fuel Savings (60/51mpg ratings) (24/34 mpg ratings) @ $2.50/gal $4126
Depreciation (2004 Prius vs 2004 Camry LE/auto, Kelley BB) $7826

Total………………………………………………………………………………..$12,843

Thus with just a different “comparison base†vehicle, the Prius comes out ahead over a 5 year period by OVER $12,800.

Clearly Consumer Reports and their Vincentric consulting service opted to present the most potentially negative view of actual Prius hybrid costs, and while the fuel savings of comparing 24mpg for a Camry to the 51 mpg rating of the Prius might be somewhat too high, at least a $3000 savings for that category would be seen by any Prius owner. The Federal Tax Credit is a “hard†figure, and the depreciation value herein computed for only two years so strongly favors the value holding quality of the Prius hybrid that it would sustain much of that pattern across the additional 3 years of a 5-year ownership pattern.

The battery replacement cost with any hybrid is of no concern economically within the time frame of these projections as such are covered for 8 years under general warranty and 10 years for vehicles sold in California (the state where these cost figures are modeled).

So, are hybrids “good value?†Clearly the Prius is a stellar value in terms of operating costs and ultimate real “total costs.†And reducing our use of a finite energy source can only be a positive act whose value cannot even be estimated.
George
Sacramento, CA.

 

Regarding:

Toyota Prius (2006) Camry LE (2006) Hybrid(=/-)
Cost: $22,305 20,955 (both with automatic) -1350
Sales tax -108
Insurance -300
Maintenance -300
Extra finance cost -200

Federal Tax Credit $3150
Fuel Savings (60/51mpg ratings) (24/34 mpg ratings) @ $2.50/gal $4126
Depreciation (2004 Prius vs 2004 Camry LE/auto, Kelley BB) $7826

Total………………………………………………………………………………..$12,843

Thus with just a different “comparison base†vehicle, the Prius comes out ahead over a 5 year period by OVER $12,800.

++++++++++++++++++++++++

I'd say three things about this analysis:
1) I doubt a similarly-priced Camry will depreciate almost $8,000 more than a Prius by the end of 5 years (what, the Camry will be worth $11K and the Prius will be worth $20K - I don't think so).

2) I think the comarison of the Prius to the Camry isn't apples-to-apples, just like the comparison of a Prius to a Corolla. You'd need to compare a Camry to a hybrid Camry for a good comparison (or a Civic to a hybrid Civic). I personally would consider the Prius to be "half-way" between a Corolla and a Camry with some funky extra features - but that's just my opinion.

3) Yes - A Prius will of course be cheaper than a similarly-priced Camry mostly due to the federal tax credit and gas savings. The Prius will be "about the same cost" as a Corolla due to its higher purchase price being offset by the federal tax credit and gas savings.

Also, if you are using sticker prices above, the Camry is likely to sell below sticker, but not the Prius.