Economics of buying a hybrid vehicle

[Cornish Steve]

This week, I spent a couple of days with my older daughter and her fiance looking at cars. As always, I follow a very specific process so we get a good price, and it takes a while. Still, I had fun looking at some of the power vehicles, for example the 5-litre Ford Mustang and the Chevy Corvette.

It was interesting to note that these vehicles are now subject to a 'gas guzzler' tax of about $2,000 - quite a hefty premium. This, of course, is the stick approach. On the other hand, those who buy hybrid vehicles (and there are a lot of them about these days) receive a break on their annual taxes (a couple of hundred dollars, I think). Plus, they save on the cost of fuel. This is the carrot approach.

This morning, a consumer guy on the radio explained the results of a financial analysis he ran: How long does it take to break even when paying the extra cost for a hybrid vehicle? The most common hybrid on the road (by far) is the Toyota Prius, and the payback period is 17 years! 17 years! Why would anyone buy a Prius with such a long payback period? On the other hand, the payback period for hybrids made by other companies (e.g., Ford and General Motors) is between 4 and 5 years. This is still a long time, but maybe it will tip the balance for some people.

For me, this is just another example of how much more the auto industry is going to have to improve existing hybrid technologies before it makes economic sense for consumers to change their habits. Gas guzzler taxes and tax rebates may help, but the more fundamental issue is developing the right technology before introducing such carrot and stick policies. There's no point forcing people to buy inferior technologies (as mentioned previously in the discussion of light bulbs) because that will only cause a backlash.

(And I would have loved to buy one of those power vehicles. :) )

[Subbynet]

I know the Prius isn't so good as its made out - but I seriously doubt those figures given Ford and GM are selling off assets left, right and center and playing catch-up while Toyota is set to become the world largest motor manufacturer in 2008/09.

[sirearl]

We have been here before Steve I don't know the cost of Diesel in the US ,but here in most of Europe changing to small diesel cars is an immediate 100% improvement in fuel efficiency,and quite a few manufacturers do not charge a premium for diesel power.

There are plenty of diesel powered cars capable of 70 mpg,with the added benefits of lower carbon emmisions and greater power than the equivalant petrol powered vehicle.

The problem with hybrid vehicles is that the manufactures do not seriously want to launch them to the general public,as there profit margins will be affected.

example a £36,000 merc costs £7,000 to make a toyota hybrid probably £10,000.

Earl

[Cornish Steve]

I know the Prius isn't so good as its made out - but I seriously doubt those figures given Ford and GM are selling off assets left, right and center and playing catch-up while Toyota is set to become the world largest motor manufacturer in 2008/09.
Here are the numbers. They are posted at edmunds.com, which is far and away the most credible US website about cars: http://www.edmunds.com/advice/fueleconomy/articles/116513/article.html

It seems I remembered the numbers wrongly - sorry. The payback period for the Prius is not 17 years but 13.6 years, but the point is still valid.

[Subbynet]

Well, that shows why the US car makers are facing the wall. 7 of the 12 comparisons include cars from Toyota or Lexus (owned by Toyota).

Its not as clear as you say. The study you link too for a start is over a year old - and if I'm not mistaken the US was paying no where near the same as the rest of the world for "gas" (Petrol). Given that Petrol costs have gone up and up ever since - the break even point has then been dropping.

Next... keeping to the Prius. That 13.6 yrs is a load of nonsense.

They compared this car to a budget poor spec'd Toyota Corolla LE as to come to the 13.6 yrs figure. When the Prius is compared to the equality equipped Camry LE - now the Break Even Point is 2.1 yrs. (Given petrol price rises its no doubt broke even now)

For an emerging technology, thats very good!

Next - whats this 60,000 tax cap all about? Giving G.Bush some credit, apparently he has asked Congress for this to be raised - but you guys won't find the B.E.P any better by limiting the number of cars available with tax benefits. By all news reports the Prius has (had) been flying out the door and receives great reviews from owners - and I even read a few on that Edmunds website. (I bet the Toyota Corolla never did!)

The 07 Prius has even better mileage. (as does the 08 and lined up 09 models)

[sirearl]

Well, that shows why the US car makers are facing the wall. 7 of the 12 comparisons include cars from Toyota or Lexus (owned by Toyota).

Its not as clear as you say. The study you link too for a start is over a year old - and if I'm not mistaken the US was paying no where near the same as the rest of the world for "gas" (Petrol). Given that Petrol costs have gone up and up ever since - the break even point has then been dropping.

Next... keeping to the Prius. That 13.6 yrs is a load of nonsense.

They compared this car to a budget poor spec'd Toyota Corolla LE as to come to the 13.6 yrs figure. When the Prius is compared to the equality equipped Camry LE - now the Break Even Point is 2.1 yrs. (Given petrol price rises its no doubt broke even now)



er you may have missed out battery replacement every 2 years £ k's

oops belay that http://www.cleangreencar.co.nz/page/prius-battery-pack

Earl

[Subbynet]

er you may have missed out battery replacement every 2 years £ k's

oops belay that http://www.cleangreencar.co.nz/page/prius-battery-pack

Earl

It lasts a lifetime according to your link.

How long does the battery last in the Prius, and how much will it cost to replace?

The Prius battery is designed to last the lifetime of the vehicle and considering that the Prius is designed to be as durable as any other Toyota, and considering Toyota’s reputation, that is a pretty long time. Toyota have lab data showing the Prius battery can do 290,000km of normal driving with absolutely no degradation of the battery’s performance.

[RedEvo]

From a running cost point of view - and a smaller carbon footprint whatever that is - I've found LPG to be very effective.

d

[sirearl]

From a running cost point of view - and a smaller carbon footprint whatever that is - I've found LPG to be very effective.

d

To true cobber you should try putting some in your car to.:p

Earl

[RedEvo]

To true cobber you should try putting some in your car to.:p

Earl

I was talking about the car. I'd never run the house on it, it's horribly expensive compared to the alternatives.

d

[sirearl]

I was talking about the car. I'd never run the house on it, it's horribly expensive compared to the alternatives.

d

I was talking about a substitute for those funny fags you like puffing:)

[RedEvo]

I was talking about a substitute for those funny fags you like puffing:)

I can't afford that stuff.

d

[Tony P]

Hi all,

I worked for an emissions testing facility for a while.

And each type of vehicle has its positive and negative.

Hybrid Vehicles do have a better mpg therefore reducing overall carbon emissions, but this all depends on how the vehicle is driven. Just like any vehicle if you drive it with a heavy foot you will never get close to themanufacturers MPG. but I do agree the hybrid surcharge is huge and this is an issue the manufacturers should look at, perhaps a bit of better competition is required.

Diesal vehicles do have a better CO2 and MPG, but there is a sucharge there for having a diesal vehicle compared to the petrol equivelant. also diesal is more expensive at the pump in the UK. So many diesal owners will have to drive several years before they see the savings.
In addition diesal is cleaner than petrol vehicles on CO2 but is substantially worst on NOX and Particulates, which is basicalt dirt&soot which are the main causes of respirtory illnesses. That is why diesal is difficut to meet californian regulations and no real diesal is available in california.

LPG vehicles the fuel is cheaper but yet again the other costs you must consider are running costs, LPG is more corrosive than normal fuels and so engine maintainence will be higher, If this is not maintained especially the CAT on the exhaust the emissions are VERY poor. In many cases I have seen LPG emissions on a vehicle which is no more than 3 years old is worst than any petrol equivelant for CO2 and also Diesal on NOX and Particulates.


Overall UK has a pretty easy system on vehicles, MOT is not required until after 3 years, and even then the actual MOT is not that difficult to pass.
Many countries have a harder type of test to pass also the cost is substantially higher than the UK MOT.

Overall the greenhouse gas issue in the UK is just a political issue, if they were serious there would be pressure on manufacturers to produce low emission vehicles at affordable prices and not charge so substantially for the envirmnmentally concious consumer.

Also consider this, the emission from a 10 year old Ford Mondeo is the equivelant of about 10 new Mondeos with the same engine size.

[Marko]

Lease the car! Payback is much shorter,... vw have some great new low C02 engines called Blue Motion! Leasing rental, fuel and taxation are unbelievably low... www car partners co uk