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Discussion Starter #1
Ok, I've put my name down on two waiting lists. But I still have to justify the Prius financially.

Say at an average 20,000 miles a year, I live in OC/LA, and an average of 20 mpg in a convetional car, thats 1,000 a year at $2/gal = $2,000 a year in gas.

The prices are: Prius = $21,000, Camry = $16,000, Scion xB = $14,000. The extra money I pay now for the Prius can buy me a lot of gas for the next few years.

I know, I know, it's not just the gas, you are driving an environmentally-friendly car. I'm just thinking this is why hybrid cars are not more popular, and car makers aren't really interested in making or selling hybrids.
 

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You also get a tax-break on the Prius. I believe they've lowered the tax deduction from $2000 to $1500 or $1800 now (I can't remember).

Look at it this way, it's one of the most fully-loaded affordable cars out there. I have looked at cars that were comparable in price, and I can't find any with Bluetooth and Navigation. Secondly, the Toyota line is really reliable. My little '95 Tercel is almost 10 years old now with 145,000 miles on it. It still runs wonderfully. It's a little worse for wear, but that is more my fault than the Toyota's.

Just the same, the money you will save in gas, the tax-deduction and the piece of mind of a environment-friendly vehicle are all very good reasons for purchasing.

I have yet to own my first Prius, but it will be within the year.

-Jen
 

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Discussion Starter #3
Thanks for reminding me about the tax break, it's $1500 for 2004, and it's only $1000 in 2005, by the time you get your car.

And I agree Toyota is a reliable line. You may notice that I compared to the Camry and the Scion. The Scion xB is fully loaded with ABS and VSC, you can add navigation for about $1500, and the total cost is still less than $17,000. The Prius with the top package is over $25000, not counting any over-MSRP premium. The difference will buy a lot of gas.
 

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http://www.irs.gov/newsroom/article/0,, ... 49,00.html for tax info. If you take ownership in 2004, you get a $1500 dedution from your taxable income, so depending on your tax bracket you could save as much as
$525 (I think 35% is the current highest bracket). In 2005 the deduction drops to $1000.

I did the math like you did, and for me it worked out to 10 years of savings to justify the Prius over a Camry just on gas savings (I drive fewer miles each year than you). However, I bought the Prius anyway. There are other reasons to buy the Prius and these were more important to me than the financial costs or savings.

Picking mine up in 5 hours and 35 minutes (but who is counting)!
 

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Discussion Starter #6
Thanks for sharing your thoughts.

My tax bracket is 28% so the savings are less. I used 20,000 miles for simplicity, it's more like 12,000, so that makes it more difficult to justify.

I know it's right to do the sensible thing, even if we have to pay a little extra for it; but charity begins at home, I need to take care of myself first in order to have the resources and the energy to save the world.
 

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vegas1 said:
Ok, I've put my name down on two waiting lists. But I still have to justify the Prius financially.
I'm interested - why do you have to justify it financially? You've put your name down for one which presumably means you have made the decision based on a complex of factors, including the economic ones. Why do you now have to revisit your decision to be sure that it is justified on economics alone?

But, if it is really important to know the economics, I would be interested in your findings. As a driver, you are ultimately responsible for whatever damage you do to the air quality. What economic value have you put on the cleaner air that you and your children will breathe as a result of the 90% less pollution your Prius will contribute to it? Your purchase will support clean hybrid technology resulting in less pollution by others - what value have you put on that? What costs will result from global warming, and what would your share be with another car vs the Prius? What is the economic value of the species that are going extinct daily, and what is your share of that cost for various vehicle choices?

Of course these are unquantifiable, intangible factors that are never factored into any economic decision. If they had been rigorously factored into our past economy, we would find that many of our activities would be far too costly, but we would also be living in a very different, and ecologically richer world today.

I think your decision to purchase a Prius was a wise one, but there again, what is the economic value of wisdom?
 

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The environmental factor, to be honest, is my #1 reason. I understand our need for oil and the means by which we need to get it (I mean the drilling aspect, not the political aspect, that's a whole other discussion). For ages, I have been preaching alternative automobiles (I'm only 25, and I've thought about it for a long time).

I think that the US Gov't should sign a bill that makes every car a hybird by 20xx. I don't know what year would be appropriate, but I think that it should be that way. There are other cars I wouldn't mind having but each time I even contemplate another vehicle, I go back to my convictions about hybrid technology. I have to practice what I preach :D Who can take me seriously otherwise?

-Jen
 

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Discussion Starter #10
Thanks again for the wise thoughts. Yes, I agree if everyone would think a little bit more about these things, the world would be a better place.

I watched a TV program where Greenland is installing hydrogen stations and promoting fuel-cell cars in a big way. I wish we have that mentality here in the U.S.

What I didn't say, didn't want to say, was that I've been out of work for a long time, and even $100 is a huge amount of money to me right now. I just found a job so I need to buy a car regardless, getting the Prius is what I'd like to do. It may be all academic since it's unlikely that I can buy a Prius within the next 2 weeks. I'm lamenting the fact that it's difficult to do the right thing.
 

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Money is always an issue, which is why mine is not going to be purchased for at least eight months. I could not afford one if the dealer came up to me right now and offered me 2% financing...okay, maybe i'd get a second job if that were the case... :D Anyhow, have you looked into any used Priuses? I know these aren't as fun as getting one fresh from the factory, but at least you could maybe get it for a few years then upgrade when you've saved up enough money to do so?

I don't know what the used market is like for Priuses, but it is worth a look if you can't get into a new one anytime soon.

-Jen
 

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vegas1:

To use your own figures, the difference between your selected Prius and Camry is $5000. Or, $4750 after the tax break. Let's assume you will own the car for 5 years.

If you leave the $5000 in your savings account for 5 years, it will earn $250 (1% APY) Using your fuel economy figures, 20 MPG vs a conservative 40 MPG in the Prius. you will save about 500 gallons of fuel per year. At $2.00 per gallon, you will save $5000 over 5 years.

With these figures, in 5 years, you end up in about same place with either car, though it's worth noting that you won't earn the full $250 in interest, as you will slowly be depleting that money to spend on fuel.

Now, taking a more agressive look at the same 5 years. 20 MPG vs 45 MPG = 550 gal per year difference. Assume fuel prices will increase by 20% over the next 5 years... (5% each year after the first)

Year 1 saves you $1100
Year 2 saves you $1155
Year 3 saves you $1210
Year 4 saves you $1265
Year 5 saves you $1320

Now, the Prius is clearly in the lead by about $800 over the Camry & Savings Account.

Lastly, you can find information on the net that would indicate that the world is approaching a production limit when it comes to oil, and that it could possibly happen in the next 5 years. If so, then you can expect much more than 20% increase in fuel prices, and your savings would increase appropriately.

And if you need yet another convincing reason... I own one, and you want to be just like Me! :)

Cheers
 

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Discussion Starter #13
Very good and convincing arguments!

I just talked to 3 dealers. All want $3000 over MSRP on a fully-optioned car, available within 2 weeks, that's slightly over $30,000. Else it's a 4-12 months wait.

Here in Southern California, there is no used Prius market to speak of. May be when the novelty factor wears off and the celebrities start selling off their cars, we'll see some.
 

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...and you are living in lala land if you think gasoline will stay at $2 per gallon. I fully expect it to hit at least $4 by 2008 because:

1. World consumption has passed world production
2. China is modernizing by the second and sucking gasoline off the world market at unprecedented rates... and they have access to the mideast pipelines, and no "stick in your eye" attitude towards Muslims like we have.
3. We refuse to conserve (as a nation) and instead build huge houses, commute endless miles, and buy outlandishly piggy autos with tax breaks compliments of an administration owned and operated by big oil.
 

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You cannot justify the purchase of any new car financially. If finances are the issue, a recent-year used Toyota or Honda will cost you much less over the life of the car, even if it burns twice as much gas as the Prius.

In my opinion, the Prius is the best value for the money of any car on the road. But only you can decide if the cost would put a crimp in your budget or make you go without something else that's necessary or important to you. You'll probably save 200 or 300 dollars a year on gas, if you drive 15,000 miles a year.

If money's an issue, buy a used Camry. If you can afford the Prius, it's worth every cent.
 

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Please don't forget to factor in the value of the cars you consider when you sell or trade. I would bet that the value of an 04 Prius will be much higher in 5 years than the Camry, Scion, or Corolla, say $2000 to $3000. And although it's hard to quantify in economic terms, the air quality in So. Cal could sure stand to benefit from lots of folks buying a hybrid, what price could such a contribution be worth!
 

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Why I bought a Prius

The Prius has great MPG and low emissions and I guess these are important by themselves. But there is another reason that I bought my Prius.

I want more people to buy them, so more will get made; so more money will be spent on making them better. The “Big Three” will make it if they believe we will buy it. So this is my small attempt to affect the market, to affect demand.

The Japanese automakers have proven that if they make a highly efficient car, customers would come. And not only buy one, but wait in line for months to get one. In the 80’s, the “Big Three” lost market share to the Japanese who had a product that America wanted, and the “Big Three” scrambled to catch up. It may just be happening again.

And with more production there will be more research. Already, the Prius battery is less than half the size it was 5 years ago and significantly more powerful, lighter and cheaper.

So I buy this car in hopes that others will as well. And with numbers will come more numbers. And at some point enough money will be spent that will get that battery down to 1/10 it’s current size and maybe just somewhere someone will have the money to make that device that will help us get rid of fossil fuel once and for all.

I care about this country and I care about this world. I lost a lot of money buying my Prius on the trade it, but I decided that it was time to really do something and money is only money.

Changing the world, one household at a time. And that is why I drive a Prius.
 

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don't forget state taxes

Several people have written in about the Federal Tax deduction that is allowed for the Prius, but I'd also recommend looking into state and/or local tax codes as well. I'm not sure what it's like in other states, but out here in Oregon, there is a tax credit of something like $1500 in the year you put the car on the road. This credit is dollar-for-dollar, as I understand it, which makes it substantially more valuable than the federal deduction of $1500 for tax year 2004. It's even possible that some local tax codes provide incentives for hybrids.
 

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I also thought that it came off of your adjusted gross income, but it is not. As patience said it is a tax credit. When I did my taxes for ’04 I was expecting a refund of around $500 to my surprise I got back around $2500. When the dealer called on December 29 that my Prius was in, I am glad I picked it up the next day.
 
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