Your Hybrid Car Is A Waste Of Money

Your Hybrid Car Is A Waste Of Money

Hybrid Car

Hybrid cars are an amazing invention and an important step toward reducing waste in a world filled with 10 MPG, gas-guzzling hunks of metal. I appreciate the engineering and technology that goes into creating a vehicle that can quietly hum along and get over 50 MPG. But there is something seriously wrong with how people seem to approach the hybrid car purchase….

And that something is math.

How People Decide To Buy Hybrid Cars

I have been around a few of these conversations. Everyone involved is always so well-intentioned, the sincerity almost passes it off as an intelligent conversation. But there is always something amiss:

Person 1: “You see that new Toyota Prius, it gets like 50 MPG’s and doesn’t even need an emissions test because it’s so green.”

Person 2: “Yeah, I can’t believe how efficient that is. I mean, you could cut your gas bill in half or less with a sweet ride like that.”

Person 1: “Yeah, that’s what I’m thinking. I get like 18-22 MPG’s or something on my current ride. If I got 50 MPG, I would be saving so much money, the car would practically pay for itself.”

Person 2: “Yeah, I mean, the payment is what, like $400 a month? If you’re saving like $250 a month or something in gas, the car is practically free. Sounds like a no-brainer to me.”

Person 1: “Yeah, I’ve got a test drive scheduled for this afternoon. It’s crazy how getting a fuel efficient car can really save you a ton of money. Heck, I can probably afford to go on that awesome vacation to Hawaii now! Thanks Toyota Prius!”

Person 2: “Totally jealous. I wonder if I could trade in my car and get a Prius too? Probably worth it. Heck, they could even roll my old loan into the new one….”

The Math

Now, that conversation may seem pretty normal to some of you. It sounds like a well-justified decision to get rid of the low-MPG ride and pick up a hybrid at little cost after factoring in the gas savings. I know many people who have done this very thing. But let’s run the numbers on this hypothetical scenario and see if this person is truly getting half off a hybrid car, or actually just wasting money.

Let’s say he trades in his old “clunker” for $3,000 (even though he could get $6,000+ private sale)

The new Prius costs $24,000 – $3,000 down = $21,000 x 60 months at 3.68% = $400 per month

After 60 months, he’ll have paid about $2,000 in interest, bringing the total purchase price to $26,000.

BUT, don’t forget that with a car loan, comprehensive insurance coverage is REQUIRED. So that means his $60 a month is now $120 a month for auto insurance. Over a 5 year period, that’s an additional $3,600.

So the total car price is $29,600.

Exciting.

Now let’s talk about what his car in NOW worth.

Edmunds.com has some great stuff on it, and a little gem I found over there is this infographic on how much a new car depreciates. The numbers could make a grown, hybrid-owning man cry (not that it would take much) and are always tough to look at, knowing how many NEW cars I see on the road on a daily basis. Let’s apply this to our example above.

After 5 years, a NEW car is worth 37% of its original value.

The $24,000 Prius is now worth $8,880.

But, What About The Gas Savings?!

“You’re totally missing the point here. Gas is stupid expensive, haven’t you been watching the news? The Prius cut the gas bill in half, OR MORE! The savings is in the 50 MPG’s!”

You’re right, I was being unfair. Let’s calculate the gas savings. But since people always seem to make this calculation wrong, let me show you the RIGHT way to do it.

People always seem to compare their current car with the new, hybrid car. WRONG. They’re buying a new car anyway, so they need to compare the new hybrid with a good, used high-MPG car, because their current car is irrelevant. We will compare the cost of the Prius and the cost of a good, used car with High MPG’s, the Honda Civic.

Toyota Prius – 50 MPG on average.

2000 Honda Civic HX – 33 MPG on average.

Let’s say the average mileage on these cars is 10,000 annually. And gas costs $3.50 per gallon on average.

Total Annual Cost

Toyota Prius annual gas cost – $686

2000 Honda Civic HX annual gas cost – $1,060

Current car at 18 MPG – $1,944

Totals Over 5 years

Toyota Prius – $3,430

2000 Honda Civic HX – $5,300 ($1,870 more than Prius)

Current car at 18 MPG – $9,720 ($6,290 more than Prius)

Conclusion: The Toyota Prius saved $1,870 in gas over 5 years compared to the Honda Civic. $6,290 savings over the current 18 MPG vehicle.

Bottom Line

I know I just threw around a lot of numbers. But here’s the bottom line:

YOU WILL SPEND $30,000 ON A CAR ONLY WORTH $8,900 TO SAVE $1,870 IN GAS OVER 5 YEARS.

If that doesn’t look like a good deal it’s because it isn’t. In fact, it’s a complete waste of $19,000. Buying a new, hybrid car is like taking a can of gasoline and book of matches to $19,000 of your hard-earned money. But it’s even worse than you think.

Opportunity Cost. That $19,000 is not just a pile of cash buried in the backyard. It’s real money that could have been put to work. Here’s how much that $19,000 would be invested at 7% for 5 years:

$26,650 Wasted

I’ll leave it at that. And just remember, this is the BEST case scenario when buying a new car. There are still many people who by low MPG cars and are not saving ANY gas money. It only gets worse from here. Bottom line: You don’t need a new car.

Comments: Have you justified get a hybrid based on the “great MPGs”? Did you ever do an ROI on that purchase? Does the math make you reconsider that purchase? How many people out there are currently driving a hybrid?

photo credit: Toyota UK via photopin cc

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Comments

  1. This is actually incorrect. Though the gas savings portion is accurate, the resale value of a hybrid car, especially that of a Prius, does not depreciate at the same rate as other cars.. I had an 8 year old Prius with 170,000 miles on it that still sold at $8500. After 8 years. If you look at many used hybrid cars for sale, they still cost a lot of money–more than standard cars– long into their use. The infographic referenced is not inclusive of hybrid cars and is therefore irrelevant.

    • Terry, let’s use your assumption of 63% depreciation over 8 years instead of 5. That only saves another $1,200. You are still FAR, FAR behind on the ROI.

      • Hybrid Dood says:

        If you invest in the 15 year old Honda, you’d probably get 5 years out of it. So lets say you drive the Prius until it’s 20 years old too, and you had to buy four 15 year old Hondas in the mean time. Then factor 20 years worth of gas savings. Ready GO!

        • I’ve had my 15 year old Honda (now 21 year old) for 7 years, still going strong. No major repairs yet 🙂

          Here’s the deal, you’re still missing the loss in value of the Prius. The Honda won’t lose much value, and you can sell and buy up if you do it right. You can drive used cars for almost free forever using this method. Will write about it soon 🙂 I call it the “used car ladder”

  2. While there are a ton of reasonable assumptions made in this post, I agree with the basic premise: there aren’t many ways you can justify buying a brand new car, and gas mileage definitely isn’t one of them. So how about a 8-year-old hybrid instead of an 8-year-old civic? That’s a comparison I’d be curious to see!
    FI Pilgrim recently posted..FI 101: Two Stages Of DebtMy Profile

  3. There is something to be said for having a new car, and a 2000 honda civic isn’t all that exciting. What about a 5 year old honda civic? I bet you’d still save a lot, but now quite as much as with the 14 year old car with well over 100,000 mileson it and will need much more maintenance.
    Daniel recently posted..Learn From Your Mistakes: LLC FeesMy Profile

    • That is a post for another time, but I have found 10+ year old civic’s don’t depreciate much, and hold their value steady for the rest of it’s useful life. And maintenance is nil, or less compared to newer cars, due to availability of parts, simplicity of design, etc. Personally, the cars I buy don’t depreciate, I get 5-10 years out of them, and then sell them for what I bought ’em for. Best way to buy cars, period.

      For further reading, check out my guest post on buying a used car here

  4. Preach on 🙂 Totally agree!

  5. Well why don’t you just go punch Mother Nature in the face then?

    I think you’re not comparing like things here.

    Yes, you HAVE to buy comprehensive coverage w/a car loan, but you also GET comprehensive coverage. Maybe it’s not worth the difference, but it’s not just setting money on fire.

    You’re also comparing a new Prius with an older Civic. The right thing to do here would be to either compare a new Prius with a new Corolla (or maybe even Camry…it’s somewhere in the middle, size- and amenity-wise, no?) or more realistically, compare that older Civic with an older Prius. They’ve been making them since 1997, after all.

    Also, tax credits and the uncountable benefit of getting to drive in carpool lanes and so forth.

    ALL that said, even if you were including everything, I suspect you’d still be right that buying an older gas car would be better (an older diesel might be even better). Any time cars have a “status” attached to them, there’s always premium for them. I doubt it would be different in this case.

    Hope all is well, bud
    Debt BLAG recently posted..My plan to spend less than $100 on Christmas giftsMy Profile

    • Thanks for chiming in! I compared to a good used car, because the reason Person 1 wants a NEW car is MPG’s, and most go straight to the dealership and get a NEW car, not a used one. I wanted to show that going used is a MUCH better, thus the comparison.

      Looks like the Prius plug-in tax credit is $2,500, which is pretty awesome. But again, that’s on a 2012 or newer model. You’re still forced to buy a NEW car, and thus are burning all that money in depreciation.

      And I agree, the “status” thing kills me. But it kills new car buyer’s pocket books even more.

  6. Prius driver here. 🙂 We have over 100k on our 2006 Prius. We justified the purchase based on reliability and gas mileage was a bonus. Out Corolla gets 30 MPGs, so the 40 MPGs doesn’t save us a ton. We bought it 3 years used, too, so that mitigated the highest depreciation drop.
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  7. I’m a bigger fan of “clean” diesel. Great mileage and pretty much anyone can fix a diesel. We just decided the pollute too much here. It is also a shame that they cost more here versus a regular gas vehicle too.

    Of course you forgot to mention one of your favorite points… buying something for a tax deduction! I think the Prius is out of tax credits, but many other hybrids still offer them.

  8. My dad bought a hybrid back in 2002 and he did the full ROI calculation and figured out it was 7 year breakeven point given the gas prices at that time and the tax breaks available. Of course if you’re comparing any new car to a used car the new car is going to look like a terrible investment, but some people (like my parents) are just not going to buy any more used cars because of their terrible experiences with them so it’s more realistic to compare to their alternative purchase, a new car. Anyway, the big selling point for the hybrid for my dad was the ability to drive in the HOV lane. As he was a megacommuter at the time, that was a huge perk. Cutting his commute time plus the 7 year breakeven point pushed him to buying it, and I think it was a good decision. They still drive the car 11 years later, though they no longer have the HOV perk.
    Emily @ evolvingPF recently posted..The Thinking Person’s Guide to Dave Ramsey: Reasonable Baby Step ModificationsMy Profile

    • I would say it’s more realistic for your parents to compare with a newer car because they have decided they will not choose to save money by buying a used car. And honestly, with good reason, because they had more than one terrible experience. But in all fairness to everyone else, I am going to present the option of a 2000 Honda Civic, because that is the BEST option when looking for good MPG’s and cost savings (well…other than a mid-90’s civic or accord…but that may be a bit extreme for most).

      And nice work getting to cost savings with the Prius, and continuing to drive it should prove to keep their gas bill incredibly low.

      • Believe me, I’ve tried to convince them of the superior value of used cars, but they really have proven that they are miserable at picking them out! I am very happy with my 2002 Toyota, purchased in 2008. And I think I’ll bypass the hybrid class and go straight for an electric car when we finally purchase another vehicle. 🙂

        My point was that my dad did the calcs for their specific situation, reticence about used cars factored in, and that something other than the savings ended up being most important (the commute reduction). Then they also chose to keep the car long enough to make the initial capital investment worthwhile.
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  9. Should global warming play any role in our purchase decisions?
    Kurt @ Money Counselor recently posted..Opt Out of Credit OffersMy Profile

    • Great question. Yes. You should not buy an 8 MPG gas hog if possible. You should consider your car’s emissions and make sure it’s tune up for maximum efficiency and minimum pollution.

      But don’t waste $20k to help the environment just a LITTLE bit unless you have the cash lying around. And in that case, peobably more proactive things you could do with it to help….like plant a TON of trees…..and still drive around a low-emission, 30 MPG civic or something.

  10. James Brown says:

    As the song says “It ain’t necessarily so”

    A lot can depend on the circumstances, and what you are doing with the vehicle. I bought my Prius new in 2007, and it generated a metric boatload of income for me over 4-ish years.

    I’ll note upfront that this is an atypical situation: In a lot of ways, I drive for a living. I work as a repair tech servicing equipment in small towns and out of the way places. I put an average of 5000km/month for work, which is 60,000km/year, or in USican, somewhere north of 36,000 miles per year, with personal driving on top of that. So, not the average.

    I was being paid a vehicle allowance, with a per km rate beyond a base amount, and ended up clearing a thousand or more above operating costs (not depreciation) every month.

    The Prius is a great, low-maintenance vehicle with plenty of cargo space. It’s just about ideal as a high-mileage work vehicle, which is why in many places the words “taxi” and “Prius” are nearly synonymous. But for the typical commuter, I absolutely agree with you. When people ask me if they should buy a Prius because of the gas savings, I tell them to buy a used 2-door hatchback with a good reputation. The mileage is almost as good, and it costs a lot less.

    • Sounds like you worked the numbers well for your situation. And I agree, seeing the thread of 300k+ Prius cars shows they are very reliable.

      And I give the same advice. A good, used Honda or Toyota with 30 MPG will save them more than any hybrid.

      10 years from now, though….these cars will be SUPER cheap, and hopefully electric will be even cheaper.

      Though, there’s always the possibility of teleportation….

  11. With so many cars now getting MPG in 30’s, a hybrid isn’t worth it to most. Saving on gas doesn’t add up over the life of the car. Plus, I’ve read stories about how states are bringing in less money from gas taxes because of hybrid and electric cars. A few states are talking about adding an annual fee for these cars since they avoid the gas tax. The stories have said it will be between $100-$200 a year.
    Jon @ MoneySmartGuides recently posted..Saving Money With IbottaMy Profile

    • Wow, didn’t know about that. Interesting.

      My commuter cars have always gotten 30+ MPG and I don’t spend more than $2,000 on any of them. I don’t need to spend $15k+ to “save” $400 a year.

  12. I don’t understand the electric vehicle/hybrid argument. Yes, they save you in fuel, but do you know how much environmental toll it takes to produce the batteries for these cars? Look into it, it is not good!
    Grayson @ Debt Roundup recently posted..Barclaycard Arrival World MasterCard ReviewMy Profile

    • I’ve never looked that up before, interesting. I care about the environment a great deal as well, but I don’t have the money to throw at a Prius right now. Maybe in 5 – 7 years when the prices for down below $4k…?

  13. Really,It is very useful post about Hybrid car. I was finding this kind of article since 2 to 4 weeks but this is the first one which gave entire information of Hybrid car. Thanks for sharing this informatics blog.

  14. Interesting…. Thanks for the post. I’ve always wanted to run the numbers like this, but never got around to it. Thanks again.
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    • No prob. Peter. I had heard about it so much and people seem to think it’s some sort of investment. Cars are depreciating assets, 99.99% of people are losing with their car purchase. I recommend buying a car that won’t depreciate at all (if possible), and then upgrading every 5 years or so. Keeps if fun, and makes your car ownership not a financial loser 🙂

  15. Jacob,
    Again – another excellent post!

    Seriously, are there STILL college students (morons) buying into the al gore b.s. of global warming? OMG! I was a “liberal arts” major and even I am not buying that bs (or a prius)!

  16. I’m not sure this is really an accurate picture. We’re currently considering buying a (used) Prius. We have an expanding family (about to have a second kid plus a large dog) and want some way to fit two car seats, a dog, and luggage. A hatchback gives us that option via putting the dog in the hatch. So that’s my background. For us, the math looks something like this:

    Current vehicle: 2009 Hyundai Sonata, 83k miles, 27 mpg (combined). KBB says I can sell it private party for around $8500.

    Potential vehicle: 2010 Prius, 40k miles, 50 mpg (combined). Currently listed on craigslist for $15100, so let’s just say $15k.

    Difference in price: $6500. I would sell my current car, then use profits + savings to pay cash for the Prius, so no comprehensive insurance.

    Also, I think for most of us, 5 years is too short of a time horizon to evaluate savings over. We should be shooting for 10 years w/cars (unless you have a changing family situation like we do). Assuming 12k per year for mileage & gas at $3.50/gallon, that gives gas costs of

    Sonata: $1555
    Prius: $840
    Difference: $715 (savings)

    So in this case, I will make back the extra $6500 I paid for the Prius in 9.1 years. In addition, at the end of the 9 years, I’ll have a car with 160k miles (the Prius) vs. a Sonata with 200k miles on it, meaning I should be able to get an extra few years of continued gas savings out of the Prius vs. having to replace the Sonata (assuming a lifetime of 200k miles).

    So it’s not always so clear cut, I don’t think.

    • The fact that you’re buying a 3 (almost 4) year old car is saving you a TON, which is awesome. I still think you can save a LOT more by getting a used Wagon or hatchback. Honda Civic hatchbacks are incredibly cheap (like $3-4k with under 100k miles), get like 33 MPG’s and you’d come out way ahead. If you need a 4-door, the Honda Fit can be had for $8k or less with 100k miles and gets 31 MPG. Both of these cars will last longer than 200k with proper maintenance. Heck, my ’94 Accord is at 298,500 and my daily driver. Paid $1,600 and have put almost 100k miles on it.

      The point of the post is to show that depreciation is a financial killer, and MPG’s is only a SMALL savings unless you are a MEGA-commuter. Good, used cars that are 5-7 years old AT LEAST will give you the most savings with the least financial hit over the years.

      • @Jacob You’re right that we could save more money w/a Fit or Civic. The dilemna for us though is that even though the Prius is relatively small, those cars (Fit/Civic) are just slightly smaller…and make getting both car seats in there problematic (infant car set is too long). W/both car seats in those cars, one of the riders in the front is riding w/knees in their chin. So they’re out (Fit has 1.5″ less of backseat legroom than a Prius; Civic is another 1.5″ less than that). Basically we’ve come to the conclusion that the Prius is the smallest hatchback that we can fit our carseats + dog in (plus some luggage). Of comparably sized hatchbacks, it seems like the best/cheapest option. Certainly better than an SUV or minivan which is what all our friends try to convince us to get.

        I’m generally with you, though. I’m still driving a ’96 Nissan Maxima with 184k miles on it. I’ve had it since high school and will proudly drive it into my 30s (next year) and plan on driving it for several more years. Thanks for all the good work! I discovered you through your guest post over at MrMoneyMustache.

        • We have a 2nd kid on the way, I totally sympathize. We have a 4runner currently, terrible MPG’s, but we don’t drive it much (5k-8k annually). We’ll still come out ahead because the car was purchase for $2,800, and in 5 years, will be worth more than that. They key is to avoid depreciation. Gas savings is insignificant compared to the loss in depreciation new cars take.

          That said, it sounds like you’re ok with the loss of value, because you’ll be putting on 15k miles annually, and have already done the math, so I say you’re good to go.

          And thanks for dropping by from MMM! You may see me around there a bit more in the coming months 🙂

  17. Wow. Mind blown. We have a 32 mpg car that cost 12k, but because we drive in the city, we see ZERO gas savings considering all traffic is stop and go. We wont fall for the same mistake next time.
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    • Yeah, the new car thing is definitely a HUGE trap, and the bait is always “SAVINGS SAVINGS SAVINGS!” Whether it’s MPG’s or some financing junk, it’s NEVER the best deal.

  18. Jacob is my math off here? If you look at it year by year
    1 year 19k*7%=1330
    2 year 21,330*7=1493.10
    3 Year 22,823.10*7%=1597
    4 year 24,420.10%*7%=1709.40
    5 Year 26,129*7%=1829.03
    27,958

  19. I’ve done the gas savings calculation before and I’ve always been surprised at how little it mattered. It depends what kind of jump you’re making (18 to 50 mpg is HUGE), but even then it’s quickly outpaced by the costs of actually buying a new car. This kind of math is one of the things that kept me from replacing my car for so long, even though it kept needing repairs. The cost of replacing it is so high that it often outweighs everything else.
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  20. Thanks for the article, I just paid off a 22mpg car I was happy to buy a year ago, but my financial mindset has changed drastically. So I’ll probably sell it.

    I’ve been doing the math with older Priuses (2004-7) and after 5 or 6 years they pretty much come out even with several-thousand dollar less expensive cars. But I’m no use car expert, so….

    You seem to have a mental shortlist of reliable older cars; would you mind sharing that list?

    Thanks again for the article and for the discussion.

    Cheers!

    L.R.

  21. Thank you! I mean we’re pretty lucky as is with our 35 mpg ’04 civic that we only spent about $7500 for. We love the idea of a hybrid but until they’re not so new and have quality used options that have absorbed a lot of the depreciation, it makes no sense. If you can afford to pay in full and you really want the car for more reason than saving gas money I’m not against it. To each their own with car choices, but I agree the gas alone argument is not justifiable. Great post.
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  22. Not suggesting your analysis arrives at the wrong conclusion, but it’s worth noting that a Prius gets 50+ mpg CITY while the Civic is more likely to deliver 25 mpg CITY. I have been able to hit 48 mpg HIGHWAY with my ’03 Civic LX and careful driving habits, but that is less than 20% of my overall driving.
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  23. Right on man! People always look at me like I have two heads when I tell them I want to own an old ’91 Geo Metro getting 50 mpg. Would would I spend 10x as much on a car that gets the same mileage?

  24. For a lot of folks it depends on what your need is. Going from an 18mpg truck to a 50mpg hybrid sound unlikely since you’re radically changing vehicle types. My wife drives a 2003 Focus which we bought used in 2005 for $16k with financing. It gets up to 34mpg. We still have it (and it just broke 100k miles). I was getting an oil change the other day and looked at the 2014 Focus hybrid on the showroom floor. It was close to $35k while the normal 2014 Focus was $18k. For an extra 20-30mpg you’d be buying twice the car. I was shocked that the Focus hybrid was so damn expensive, and equally amused that the price point for a new conventional Focus has essentially stayed the same for a decade.

  25. You keep talking about how little the Prius will be worth after 5 yrs. But so won’t the other car you would buy if you didn’t go for the Prius. A value drop to 40 % after 5 years is even considered a very small drop, as I get value drops to 45 % already on a 3 year lease.

    So both the Prius and the Civic would drop to about 40 % of their original value, but one would save you money on gas at least.

    And what is the deal with mixing in other costs that are not exactly relevant to gas saving. What if you have to take a bad loan on the whole price of the car, or steal the money to buy the Prius, then you would sit in jail half the time of those first 5 years – please calculate loss of salary for 2,5 yrs… Not relevant to the gas math which is what matters to people.

  26. You know whats cheaper? Walking or using a bicycle no insurance no taxes no gas LOL!!!! Hybrids are no for everyone for some people that drive a lot they probably will save money for other probably not, there is no comparation between driving a new hybrid than an old ugly car with similar mpg, i would rather pay more to drive a decent car than be driving an old ugly car!!!! I just bought and electric for 11500 cost pert mile 0.02 cents while it will take 10 years to pay off by it self i dont really care i love the car is much more confortable than my old car!!!!

    • Exactly, as long as you KNOW you are paying a premium so you don’t have to “drive an old, ugly car”, then it’s all good. I just hate the excuse that people are “saving money” by buying a hybrid, because the numbers speak for themselves. They are choosing more luxury, and trying to lessen the impact by getting better MPG, but in reality the depreciation eats all the savings and more. I think the best middle ground will be when Hybrid and electric cars are $5k and less, and the depreciation curve flattens out.

  27. And what about how much it costs to charge up that baby and replace the battery every few years!

  28. Who are you and how do you know about the HX? 🙂 I had always tried to purchase small, economical cars, but since I am 6’2″, the old Civic was too small for me. When I came home from Active Duty, Dad sold me his third Focus, but two weeks later, someone totaled it while it was parked. I had always used AutoTrader. I did not like Craigslist. I hardly saw any cars, so I ended up with a 1999 Forester, which I never really appreciated, especially at the pump! I tried to figure out how to save gas, found Ecomodder.com, and bought an Ultragauge. It really helps to see your instant fuel economy and figure out how your driving affects mileage. Based on what I read on Ecomodder, I spent several months looking for my 2000 HX, and I average 45 MPG.
    I found this page looking for hybrid ROI. Today a friend started boasting on Facebook because she traded in her Fiesta for Prius. She claimed that she used to use a quarter tank driving to work, but “didn’t use any gas this morning coming to work,” which was absolutely not possible with any kind of ICE technology.
    I have had my car almost two years and the mechanics missed some problems when I had them look at my car before I bought it. Even my then-girlfriend noticed that the lights pulsed. There was some kind of a lack of voltage regulation–when I eventually took it to Autozone they told me that I had a bad voltage regulator.
    The first time that I changed the oil, the steel bolt stripped the aluminum pan, and it had just started feeling almost tight–it is not like the crazies that tighten their lug nuts as much as possible. Then my oxygen sensor failed–kind of.
    I just had my clutch go out. I replaced the first three myself and would have swapped that myself, but it was an emergency. I think that someone forced the lock before I bought the car and they temporarily fixed it, but I needed to pay to have it fixed properly. I also had some problems replacing the oil pan, and had collateral damage. All told, I have paid $1,450 in twenty-two months in repairs. That sounds like a lot, but it is only $65.91 monthly, and it would have been less if I knew what I was doing! 🙂
    I used to work with a kid that knew everything. He was purchasing his first car and it hurt me that he insisted on buying new. I asked him to at least consider a one-year certified pre-owned model. Worst of all, he bought a Volkswagen!
    He claimed that when you purchase new, you end up paying for a new car. If, after fifteen years and 189,000 miles, my repair costs are $65.91 a month, it will be a long time before it equals a monthly payment!
    Thanks for your great post! I look forward to reading more by you! 🙂

    • Sorry, I forgot to say that I am glad that you mentioned that cars are depreciating assets, not investments, and I wanted to address the environmentalness (?) of hybrids. Batteries are not “green.” They are toxic, their creation has hazardous waste as a by-product, and they need to be handled carefully at the end of their life. Yes, some last hundreds of thousands of miles, but I imagine the average one lasts closer to 150,000 miles. That is still a great value, but if you break even at 146,000 miles (I once calculated that was what it took compared to a Corolla), then you are not getting anywhere.
      Toyota offers a bounty to make sure that their batteries are recycled and all if it is recycled, but I still do not think that the production of a hybrid is as clean as that of a normal car.
      The thing is, though, if you really want to save the world, you do not pay someone to forge a brand-new car, you get an economical used one A five year-old Toyota may outlast a new Ford, let alone a Mini, Volkswagen, or Fiat.

      • Yes, yes, and YES! Now, once the battery tech can last 300,000+ miles, I’ll be looking for a great used, Tesla for $5,000 😉

        But yeah, used cars SEEM like a hassle, but if you run the numbers, you are TENS OF THOUSANDS ahead, it’s not even close. And when you look at the opportunity cost….SCARY! 🙂

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