Quote:
Originally Posted by itr1275
I would suggest to buy the hybrid if you like it, but you are highly unlikely to save money with today's hybrid technology. There are some gov't rebates that can offset this, but it depends on where you are at and what the incentive is. Even with incentives you are likely to loose money in the end.
Warning Math Below
The Rav 4 Hybrid option is $2400 and gets you a 33% increase in mileage. 30 MPG->40MPG. The option is about 1/2 the price of the original Prius vs Echo and a larger increase in MPG. So it's going the right direction.
The Rav 4 Hybrid can save $375/year, driving 15K miles with gas at $3/gal. That puts the break even at 6.4 years or 77 months. Assuming you don't drive like a bat out of hell.
I'm also not including the interest paid (est $200-$500) on the extra $2400 over the life the loan. Not to mention the extra taxes, insurance, and DMV fees for a more expensive car. All that will eat up another years worth of savings.
The average owner keeps their car 71 months. This means that the average person won't have the car long enough to recoup the cost of the hybrid option.
If you keep it longer than 77 months (6.4 years) you are ahead by $375/year. However, you will need to replace the Hybrid batteries between 8-10 years (or 100K miles) and cost can be $3K-$8K. BTW the replacement interval works out to 10K-12.5K miles per year, which is below my estimated 15K miles above. This would make net zero time between 7.7 and 9.5 years which is smack dab in the middle of the battery replacement interval.
Let's say you get 10 years on the batteries and a low ball replacement cost of $3K. $375*3.6yrs is $1350 in the bank. Best case your are still out of pocket $1650.
Of course this can change and has changed. I did the same calculation for the original Prius and the cost of ownership was about 3 or 4x this.
We used have several cars that go 50+ MPG in the 80s. They were not fast but they were in expensive and fun to drive.
Here are a few: Honda CRX HF
Chevy Sprint 3 cylinder
Geo Metro XFi
However, the where low cost cars and the profits were low for everyone and they went away. |
The assumptions are wrong because you're comparing 2wd Rav4 with the awd hybrid. AWD LE vs AWD LE hybrid is a more accurate comparison IMO. When you do the math with objective assumptions not seeking a predetermined outcome - the hybrid wins in almost any scenario.
The Rav4 hybrid option currently is $575. You can compare this yourself. Rav4LE AWD is $27,775. Rav4 LE hybrid AWD is $28,350.
MPG difference is 30mpg combined for the LE 40mpg combined for the LE hybrid.
The break even formula for miles driven is fuel cost per mile of the non hybrid equal to fuel cost per mile of the hybrid plus the cost difference.
In this case .03333(fuel price)(miles) = [.025(fuel price)(miles) + $575]
In this case if fuel is set to $2.50/gal the result is 27,600 miles to break even on new vehicle cost difference.
The batteries are warrantied for 10 years and 150k miles on all Toyota hybrids. So 10 years is a minimum no cost life, but typically they've been replaced around 20 years or 300k miles in actual service in larger fleets (taxi service). Generally they are never replaced in most hybrids. A reasonable actuarial value that I'd assign is let's say 5% chance of battery replacement at 10 years. Or risk adjusted value of $150 on a new vehicle.
Given that you'll save approximately $3125 in fuel during the warranty period, in the unlikely event you need a battery at that point, you're still very close to breaking even. But on a risk adjusted basis - your way ahead with the hybrid. Now - if you assume average fuel cost of $4, you're $5k ahead by that point so even with a battery replacement at year 10, it's still lower cost.
Assuming you keep it less than 10 years - the hybrid will break even with current pricing in about 2 years on fuel vs cost difference. And it'll resell for quite a bit more as well.
Using KBB - I priced two identical 3 year old Rav4 LE models. One hybrid. The other non-hybrid. The values were 22,327 vs 20,177. That's a difference in value at 3 years of $2,150. Resale value of the hybrid is significantly more than the new cost differential.
The cost to own the hybrid Rav4 is cheaper under almost every scenario when you use what I would consider the most reasonable unbiased assumptions - meaning the actual difference in price new of comparable models and value differential of resale along with a probability weighted battery replacement value.
The unknown is the actual price difference you'd pay for a new one. My guess is non-hybrids have bigger discounts anywhere that there is a supply constraint. Places where the supply is available of both are in the range of 70% or more taking the hybrid. I think the only reason not to choose a hybrid rav4 would be if you wanted the adventure model or similar that has a more capable awd system - the hybrid is not so great in more challenging terrain. - but... it's a rav4 who cares if it's good off road?
What system the 4Runner will get will probably be pretty obvious when the Tundra hybrid is finally released. Just for fun if the 4Runner were to have a hybrid that could bump it from 17mpg combined to 25mpg combined (I think very reasonable target, although I'd bet 30 is what it actually comes out as) you'd save $4700 over the first 100k miles on fuel at $2.50/gal and more like $7,500 at $4/gal. If it adds 100hp and 100ft/lbs of torque across the board, the ability to ford streams at any depth, and the ability to run as a generator at camp and use the battery for your fridge - I think the answer will be that i'll be very popular. OTOH if it's a NA 2.5L and weak hybrid with 240hp combined - I'm guessing it'll sell about as well as the 4cyl 2010 4runner did.
Side note:
The low cost fuel efficient cars went away for a few reasons.
Safety made them heavier.
And emissions requirements do not allow for lean burn engines anymore. That's what those were. A 3 way catalyitic converter requires a fuel ratio richer than stoichiometric to provide the un-burned fuel for the catalytic converter required for the NOx reductions. Use of ethanol based fuel makes this much worse. For the reaction to work properly ethanol based fuels must run approximately 30% rich. e85 for example wastes a ton of fuel to run the catalytic converter. The plus side is that the final emissions are much cleaner than the old lean-burn cars despite burning more fuel.
Dirty cheap fun cars are never coming back. But - I think cheap fun EVs are coming. And I'm guessing a few years down the road there will be some very fast cheap EVs available.
