Monday, February 14, 2011

Valentine's day car

Saw an advertisement from a car company suggesting that having a cool car loaded with features might impress your first date. Yes, it's Valentine's Day. Of course, St. Valentine had nothing to do with sex.

My first date (in a car) was with a Lincoln Continental Mark iv. Quiet, smooth, electric sun roof, and with a 7.5 liter v8. The family Lincolns actually had climate control, not a silly blend door control. We'd set the thermostat to 72 year round, and it'd turn on the a/c or heat as needed. But my date was disappointed. She knew i had access to a real beater: an F-250 with three quarters of a ton of character. No tail gate, an electric bench seat taken from a Buick - not even bolted to the floor, AM radio, starter motor on it's last legs, and zero fear of dirt. Every ride was an adventure, with no cell phone to call for help. What more could one want?

And these days, my car is a stripped down 2000 Saturn. It's a 4 door sedan with a 1.9 liter straight four, front wheel drive and 5 speed manual. It's got 285k miles now, and has averaged over 43 MPG. The 12 gallon tank costs $36 to fill at $3 a gallon. Sure, it only goes 500 miles on a tank. When the wife and i go somewhere, it's not in her much younger, more comfortable vehicle. We keep the excitement going.

A USA Today article says that the Ford Escape hybrid is $7,600 more than the Ford Escape non-hybrid. It gets 9 more miles per gallon (MPG) - 32 MPG vs 23 MPG combined. The obvious question is how many miles before the hybrid breaks even on cost?

$7600 / (($3/g / 23m/g) - ($3 / 32m/g)) = 207,170 miles.

This assumes that maintenance for the hybrid will be zero. That's probably not true. But it also assumes that gas will be $3 a gallon for the life of the car. My guess is that gas will go up. It was $4 a gallon in 2008. Math is a powerful tool, if used to inform. But it's important to know what the math is telling you, and what it doesn't say.

I did this math for the Escape in 2008. The answer was 270k miles. Gas was $4 then. My car at the time had 295k miles, so it seemed at least a possible win. But, given that the break even cost is lower now, at least Ford is making headway towards making hybrids worthwhile economically. That's encouraging. Hybrids make more sense for people with lots of city miles, like taxi drivers. I drive lots of highway. I don't expect a hybrid in my near future. Turbo diesel might be nice.

There's more math. If $7,600 makes such a big difference that it takes 200k miles to make it up, clearly, the purchase costs dominate. Since i didn't get a car that's bigger than i needed, i saved huge amounts up front. And i bought it used, saving most of that. I spent less than 10% of the $23k non-hybrid Escape. And, since it's smaller, it gets better economy too. What have i spent my money on? Well, mostly on family essentials.

The total dollars aren't the only concern. There's also capability. My current favorite new car on the market is the Fiesta. I don't happen to know if my telescope will fit in it. I'd like a vehicle that can tow a boat. I've got a boat. The Fiesta won't do it. One cheap way is to get an old body-on-frame car. I've got the car. It needs an engine. I expect to come out ahead compared with buying a truck. It'll get 30 MPG when not towing.

I remain convinced that cars are not a good investment. It often makes sense to put money in an old car even if the resale value is lower. Invest in your own comfort. Realize that comfort is ephemeral. What's the cheapest way to get what you want for the longest time? Buying another junk can set you up for expensive diagnostic costs. Taxes devalue other vehicles compared to yours. I'm glad that people buy new cars, though. Please buy a new Fiesta so that in a few years when my Saturn dies at 350k miles, i can buy it from you. I'd like the smallest engine, turbo if you can get it, with the manual transmission, please.

1 comment:

DQKennard said...

We put about 7500 miles on my car per year, and about 6000 on my wife's. And we've only done that much in the last few years.

I'm not going to be making that 200k break-even point.

It's not just that a hybrid makes no sense for me, it's that mileage ratings and gas prices don't really mean much to me. The vehicle criteria that mean something to me: Does it do what I need it to do? Is it cheap to acquire? Is it likely to be cheap to maintain and repair, with long-term reliability?

I have a 2002 Ford Focus Wagon, with 55k miles on it. When I bought it 3(?) years ago, I asked my then 10-year-old daughter if she liked it. She shrugged and supposed it was OK. I said that was good, because my goal is that in another couple of years it will still be reliable enough to be her first car.