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Car Corner
Gas Mileage... For The New Car Buyer

April 1, 2009
By Scott Lewis

I have visited gas mileage a number of times. This month I decided to do something a little different. I was inspired by the new Honda Insight and the updated Toyota Prius. These two cars will probably be the mileage champs for a family car. Both are going to target people looking for 4 or 5 passenger cars that get great mileage.

The Toyota Prius is a larger car, and will cost more than the Honda Insight. This may mean they don't compete directly against each other. You could think of it like someone shopping for a Honda Civic looking at a Camry, or a Corolla buyer looking at an Accord. Because of this it may be hard to compare these cars directly. But I will try.

Also, I want to take a look at a few other cars that get decent, if not great, gas mileage. I created a spreadsheet that I can enter the EPA mileage for a car, the price of the car, and the price of gasoline. The results will show how much money you spend over the course of 5 years with one car or another.

This spreadsheet will assume 8,000 highway miles and 4,000 city miles per year, for a combined mileage of 12,000 which still seems to be a good average. The spreadsheet is easily modified so you could enter your own annual mileage to see if one car is more economical over the life of the car.

I am even going to include the interest on the loan. That's right, when people pay more for something up front they rarely think beyond the purchase price. But when that bigger investment is compounded with interest it impacts the bottom line, and should effect your decision.

Download Spreadsheet Here

Please look at the spreadsheet (and save it for yourself). Now let's look at the numbers. It should become immediately obvious that the hybrids cost more to buy and fill with gas over the long run than a comparable "full" gasoline automobile.

I also added in the Volkswagen Jetta in gas and diesel versions. Diesel prices are more than gasoline, so this becomes a more difficult thing to gauge. In the spreadsheet I set the price of gasoline and diesel to $2.00. You should plug in the prices near you to make this all accurate.

What is interesting about the spreadsheet is what happens when you increase the price of gas. You would expect the hybrids to get closer to the non-hybrids in total money spent. In comparing the Honda Insight to a Honda Civic, the price of gas would have to go over $5.12/gal. to break even on the hybrid over a 5 year ownership.

The Toyota Prius is worse. In comparison to the Corolla, gasoline would have to exceed $24.62/gal to cover the different in price between the two cars. The Prius is a larger car than the Corolla, and this might not be fair. But, if you were in the market for a high mileage, 4 door sedan these two cars fit that bill. The Camry is clearly in a class above these cars (and has its own hybrid version).

The price difference between the Honda Insight and Toyota Prius puts a major advantage to Honda. Granted, the Prius gets better mileage in the city than the highway. The Honda is more traditional in getting better highway mileage. Maybe you think that is an unfair advantage in my spreadsheet. Not so. I tried switching the mileage to 4000 highway/8000 city and the Honda cost less to own over 5 years than if gasoline was well over $50.00 per gallon.

The oil burner Jetta doesn't pay for itself even if diesel fuel costs the same as gasoline. Gasoline and diesel would have to go well over $10/gal. to justify a diesel. Diesels are starting to loose some of their appeal.

Details

There are some issues here. For starters, the Jettas had to have their prices bumped by $1,100 each to cover the cost of an automatic transmission. Like it or not, all the hybrids are automatic, and I wanted to level the playing field. Besides, the vast majority of cars on a lot are equipped with slush boxes.

I compared the Prius to a Corolla LE and the Insight to the Civic LX, which may not be accurate. It is hard to tell what trim level one car should be compared to another. But the spreadsheet is just that... a spreadsheet. If you want to plug in numbers of your own you can do that. In fact, I would recommend that you visit the manufacturer's web sites and "build your car" on their site. Get prices for cars equipped the way you want them and plug them into the spreadsheet. Compare any vehicles you want that way.

Of course, we left out the one long term issue with hybrids... batteries. If you really drive a hybrid for 5 years at 12,000 miles per year, you could be looking at a large maintenance cost after those 60K miles. Maybe you will trade it in before the batteries go bad. Which is possible, and why I wouldn't contaminate this spreadsheet with that unknown variable.

In the end the spreadsheet does not lie. Use it as a tool to determine if you are saving money in the long run.

Conclusion

Buying a hybrid is not cost effective... even when gas is $4.00/gal. It makes it nearly impossible to justify the expensive of hybrid technology for gas savings alone. Don't buy a hybrid to save money. Buy a hybrid to save gas. It will cost you more in the long run, but you will be helping this country reduce its dependency on foreign oil (thought not in any great numbers).

I would love to know how to use this spreadsheet on the upcoming Chevy Volt... assuming Chevrolet (and GM) are still a viable car company and the Volt becomes a production vehicle. Since the Volt can go a reasonable distance without gasoline, it is possible you could commute in it and never buy gas. I can't as I my daily commute is twice the range of the Volt on battery power. So I would have to use the gasoline "generator" for the trip home everyday. I wonder how smart the software will be to know to use as little gasoline as possible to provide just enough electricity for me to make it home.

That can't be put into the spreadsheet.

Until next time.

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