20 November 2005

Is the Prius Worth It?

OmniNerd tries to look at the economics of buying a new Prius and fails.

His biggest problem:

(1) He looks at differences in car payments for a Prius v. alternatives, rather than at fuel consumption for the life of the vehicle. A typical car loan is for 3-10 years. Cars often last longer. The easier way to measure fuel cost savings is to look at savings over say 135,000 miles, the useful life of the car. The fuels savings is about 2,500 gallons of gas over the life of the car. At $2.50 a gallon, this is a $6,250 savings, and realistically, over the life of the car, gas prices are more likely to go up than down.

(2) He compares cars of different sizes. A Prius is a bigger car than most economy cars. It is comparable, so owners say, to a Camry or Accord, not a Civic or Corolla or VW New Beetle. The price difference between a conventional vehicle and a Prius is less than $4,000, and the Prius retains its value substantially better.

(3) He compares buying a new car to keeping an old car with no payments. But, the realistic time to look at a Prius is when you are deciding whether to buy, e.g. a Prius v. a new Honda Accord.

In short, even with current economics, a Prius is worth it.

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