walkitout (walkitout) wrote,
walkitout
walkitout

still more gas math

And it is math this time, but first, an interesting bit of commentary.

http://www.thetruthaboutcars.com/suv-and-pickup-truck-buyers-now-owners-for-life/

Conclusion: "Now that the wealthy (who can afford the beating) and the quick-movers (who have already glutted the market) are in their Civics, Camrys and Accords; consumers in full-size trucks and SUVs are pretty much owners-for-life." That's not _my_ punctuation. I copied and pasted. But this is more or less the conclusion I was slowly working my way around to; kudos to this person for putting it so succinctly.

I put together a spreadsheet assuming a person buys a car new and drives it to 100K miles (which is a nice round number, and fairly close to a 7 year loan driven the current average number of miles throughout the lifetime of the vehicle). I was interested in comparing the lifetime gas cost of the vehicle under this scenario, so I put in average mpg price points starting at 10 and topping out at 50. Then I figured the number of gallons consumed based on that average mpg, and total dollars spent on fuel at $2, $4.5 and $10 (no one thinks we're going back below the first number, the second is close to current, and no one wants to talk about any number higher than the third number).

Here are some fairly obvious conclusions:

Someone who could afford to run a 10 mpg vehicle at $2/gallon can afford to run a 50 mpg vehicle at $10/gallon -- it's the same gas cost (that's straight up algebra).

At $4.5, over the lifetime of the vehicle, the 10 mpg car will consume enough gas to buy 2 Priuses.
The Prius, at $4.5, will cost a little less than half its initial value in gas, over its lifetime.
At $10, the 10 mpg car will consume enough gas to buy 5 Priuses (or close to).
The Prius, at $10, will consume almost as much in gas as it cost to buy.

I did it straight nominal dollars, so you can complain at will about that. But I still think the resulting numbers are kinda interesting. These days, when you buy a car, what you are really buying is your gas bill (well, and your insurance premium, licensing, blah, blah, blah). Kind of like, when you buy into DVC, what you are really buying is a stream of maintenance bills. There are a surprising number of things in life exactly like this (for example, you have to buy _very expensive bookcases_ and _very cheap books_ for the value of the case to exceed the value of the books when the bookcase is full). Emphasis on surprising. I had known, for a very long time, that those contests in which you "win a car!" were contests in which you _really_ wanted to take the cash equivalent if it was something like a Porsche, because if you cannot afford to fork out for the Porsche, you probably can't afford all the trips to the mechanic that will be involved, never mind the insurance premium. Turns out you can't probably afford a free car that gets 10 mpg anymore, either. No wonder the lots can't move 'em.
Subscribe
  • Post a new comment

    Error

    default userpic

    Your reply will be screened

    Your IP address will be recorded 

    When you submit the form an invisible reCAPTCHA check will be performed.
    You must follow the Privacy Policy and Google Terms of use.
  • 0 comments