I woke up this morning around 5am (usually I get up around 6:45) and couldn't fall back asleep. Why, you ask? Because for some reason I had to figure out how long a person, who spends approx. $10,000 more on a 35mpg fuel efficient car than on a regular 20mpg car/truck, would have to own that car in order to pay off the difference assuming $4.00 gas and 14,000 miles/year driving.
I haven't checked it on paper, but in my head I got about 8 years, 4 months. I was satisfied and hapily went back to sleep.
I really don't think the average American keeps their car for more than 8 years, nor do they pay straight up cash for them. There are a few approximations in the calculations, but it appears that it's better to just keep whatever gas guzzler you already have.
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2 comments:
I get the same number, assuming you paid cash for your car and gas stays at $4/gal (unlikely), and neglecting inflation. One difference is that you paid cash; it seems most people finance their cars, which adds cost. Of course, not to be a downer, but yours is probably more expensive to insure and/or repair, making it take slightly longer to recover the cost. But here's another one: If gas prices go up, which we're all assuming they will do, then in years to come your car will be more in-demand and will therefore have retained more of its value than the less fuel-efficient model, and it will have had a higher starting value, so you recoup more of the $10K when you sell the car. So overall it's probably not that bad.
And it's just that kind of "creative but plausible" analysis you'll need to do well on the prelim. Good luck, man. :-)
You did, however, neglect the tax benefits of a hybrid vehicle. Depending on what car you bought and when, you can realize a $2k-$5k tax credit for the purchase and then an ongoing credit for ownership.
Also, concept cars that are supposed to hit production around 2010 are supposed to be seeing far better gas mileage. I think the volt plugs in at home and only uses gas if the battery runs low after about 40 miles. I would rarely ever use gas if that is true. Others are claiming 100+ mpg.
You may be better off still with this. http://lasvegas.craigslist.org/bik/848547128.html.
Sweet dreams. ;)
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