We are on the market for a new car for my wife. With the gas prices near $3 here in Bay Area, we'd like to have something, you know... that will keep our gas receipts as low as possible. So, the Prius seems to be the choice...
However, with all that availability problems, wait times, and prices over MSRP made me wondered whether that purchase will justify my savings on gas.
I decided to make a simple research. The easiest way would be comparing Prius with a similar non-hybrid car ideally by the same make.
So what would be a suitable car from Toyota to compare? Corolla? Well, Prius is a hatchback and it seems more spacious, so Corolla does not look like a god candidate.
What else. Matrix? Matrix seems to be more versatile but I think is ok to use it is as a comparison tool. This fact that it is a little more functional car will make it easier later to come up with the final decision if the cars will appear so-so at the end of the research.
Now, it is obvious that to simplify calculation of price difference, it is enough to compare basic packages assuming they have the same features. All extras and options should be excluded since they will add similar premium amounts but keep the same difference.
It looks like Matrix XR shares the same set of basic features with Prius. According to Edmunds the TMV prices are the following:
Prius: $21,929 (MSRP +$400)
Matrix XR: $16,550 (MSRP -$1000)
Prius gives $2000 tax deduction I may end up saving around $600 in cash.
Matrix has currently $500 rebate from the manufacturer.
Finally we have:
------------------
Prius: $21.3K
Matrix XR: $16K
Difference: $5.3K
Average MPG (optimistic estimate):
----------------
Prius: 50
Matrix: 30
Difference: 20
Let's assume the gas prices will stay at $3 level and we drive 10K miles annually:
Annual gas cost:
------------------
Prius: $600 (10,000 / 50 * $3)
Matrix: $1000 (10,000 / 30 * $3)
Difference: $400
Time to pay off the price difference:
------------------------------------------
~ 13 year (5,300 / 400)
or
~130K miles
Are we going to keep Prius for that long? Not likely.
Even if an average price of gas will be $6 per gallon it will still require more than 6 years of savings to justify the cost.
And again, Matrix is a more functional and powerful car.
So, the decision seems very simple on the paper...
Now, is there any flaw in my logic? Should I still buy Prius to save the Earth and PAY the premium out of my pocket for saving the Earth?
However, with all that availability problems, wait times, and prices over MSRP made me wondered whether that purchase will justify my savings on gas.
I decided to make a simple research. The easiest way would be comparing Prius with a similar non-hybrid car ideally by the same make.
So what would be a suitable car from Toyota to compare? Corolla? Well, Prius is a hatchback and it seems more spacious, so Corolla does not look like a god candidate.
What else. Matrix? Matrix seems to be more versatile but I think is ok to use it is as a comparison tool. This fact that it is a little more functional car will make it easier later to come up with the final decision if the cars will appear so-so at the end of the research.
Now, it is obvious that to simplify calculation of price difference, it is enough to compare basic packages assuming they have the same features. All extras and options should be excluded since they will add similar premium amounts but keep the same difference.
It looks like Matrix XR shares the same set of basic features with Prius. According to Edmunds the TMV prices are the following:
Prius: $21,929 (MSRP +$400)
Matrix XR: $16,550 (MSRP -$1000)
Prius gives $2000 tax deduction I may end up saving around $600 in cash.
Matrix has currently $500 rebate from the manufacturer.
Finally we have:
------------------
Prius: $21.3K
Matrix XR: $16K
Difference: $5.3K
Average MPG (optimistic estimate):
----------------
Prius: 50
Matrix: 30
Difference: 20
Let's assume the gas prices will stay at $3 level and we drive 10K miles annually:
Annual gas cost:
------------------
Prius: $600 (10,000 / 50 * $3)
Matrix: $1000 (10,000 / 30 * $3)
Difference: $400
Time to pay off the price difference:
------------------------------------------
~ 13 year (5,300 / 400)
or
~130K miles
Are we going to keep Prius for that long? Not likely.
Even if an average price of gas will be $6 per gallon it will still require more than 6 years of savings to justify the cost.
And again, Matrix is a more functional and powerful car.
So, the decision seems very simple on the paper...
Now, is there any flaw in my logic? Should I still buy Prius to save the Earth and PAY the premium out of my pocket for saving the Earth?