why i won't be buying a hybrid any time soon

Some interesting discussion on whether holding out for a later model hybrid is worth it. The 2010 Prius is expected to get 50 MPG, which is widely considered a major benchmark. Upon reflection I'm not really sure why.

Setting aside the "feel-good factor" (which some people are certainly willing to pay for--witness the success of "fair trade coffee"), if you look at the raw money-saving potential of marginal increases in gas efficiency, it is worth considering that the relationship between miles per gallon and money out of pocket is non-linear. You can do the math yourself if you don't believe me, but here's a graph that assumes one drives 200 miles a week (this is about what I drive these days) and gas costs $2 per gallon (which is what I pay, to one significant figure.)

If the shape of the curve seems non-intuitive, what you need to keep in mind is that to get dollars/week, you have to multiply miles driven by gallons per mile (the reciprocal of miles per gallon) by the price of gas. (Remember dimensional analysis kids?)

So if I were to trade in my trusty old Jeep, which gets 16-17 MPG for pretty much any late model Japanese 4-cylinder car (which generally get about 30 MPG, at least on the highway), I would save $12.67 per week on gas. Not bad! But if I were to get the 2010 Prius, I would save...$17.00 per week. In other words, the difference between the Prius and the old-fashioned 4-banger is only $4 a week, or a little over $200 per year.

Of course, if the gas price jumps back to this year's high of ~$4 per gallon, you can multiply all of those figures by 2. In my opinion, still not worth it for the hybrid, but almost certainly worth looking into losing the Jeep for a 30 MPG used car of some sort.

Similarly, aggregate demand for fossil fuels could be reduced much, much more by getting all the vehicles that currently get less than 20 MPG (mostly trucks, SUVs, sports cars, and larger sedans) up to 25 or 30 than by getting the 2-door coupe already at 30 up to 50.


Gino said...

factor in the price difference tween a 4-banger v a prius, also, to figure out how many weeks you have to drive the prius to break even

Anonymous said...

See www.mpgillusion.com for a detailed argument along the same lines.

Brian said...

Gino--haven't done that, but I'm pretty sure it would be on the order of 10 years, if not more.

KeepDurhamDifferent! said...

You're forgetting another way to make money. I bought my 2004 Prius new in 2005 when gas was low, then sold it for more than I paid for it when gas was $4. Drove the Miata @35mpg.

Last week I bought a 2008 model, Toyota is so desparate to move them they are practically giving them away. Hopefully I can do this again.

Also, I don't get the 50mpg milestone. I used to routinely get 52 mpg on my 2004 model in the summer, and about 46 mpg in the winter.

Dave said...

I ran the same rough calculation for installing a solar pre-heater for my hot-water heater. Even when tax advantages are considered, it would still take approx 7 years before the savings in electricity/natural gas would compensate for the up-front cost of the solar system. So it doesn't seem to make much sense to "go green" because it isn't economical. Of course, your boy Obama would seek to make equipment like the prius or solar heaters economical not by reducing the cost of the equipment but by using the power of government to artificially raise the cost of utilities. So I hope you feel good about that change.

chris said...

I went through all of these calculations when I was buying a car last April. Of course, I needed cargo space and was trying to see if something like the Ford Escape Hybrid was worth the extra cash. With the loaded AWD Honda CR-V as a comparison, it took 6-7 years to make up the difference in price with gas at almost $4 a gallon. Longer now that prices have dipped so sharply. Also, the batteries have an expected replacement at about 100k miles according to the sales guy and those are anything but cheap for hybrids. Combined with current gas prices, it pretty much justifies my decision to go with the non-hybrid Honda.

If anyone is interested, Honda just put out a direct competitor to the Prius with the new Insight. It looks better than the Prius IMO, which is ironic considering that I always thought that the Prius was a design rip-off of the former Insight.

chris said...

You forgot that another good reason to buy a hybrid is because you enjoy the smell of your own farts, at least according to South Park.