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Hybrids the Real Payback
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Hybrids, like the Camry and Prius, cost no more than the LX or LXE editions that hundreds of thousands are buying every year. And the price keeps going down, the premium the public pays for one. EV technology is advancing at such a rapid pace, I see non cart-like ones at dealerships within the next 5 years.
I hardly think it is the "wealthy" buying Hybrids. And the available data reflects that. Mostly middle class people. And the retired, fixed income set.
But I do see lots of hourly wage earners, who most consider low-income people, like Bell men at hotels, and valet car parkers, driving top of the line, leather seated, chrome wheeled Altima's, Maxima's, and the like. Those cost thousands more than a Prius.
All automobile purchases are net losses. If one can pay a couple of thousand more, save on gasoline, and have it, after five years, cost them no more than a ICE, and save 70% of the emissions, that is hardly a financial burden.
You are saying you grew up in the industry - so tell me what represents a bigger profit for a typical high-volume dealership - is it the new car sales or used car sales or their service department?
If you can put percentages to each, what would you put?
I'm talking profits - not gross volume.
“Hybrid car drivers have a level of education higher than any group of car drivers that I’ve ever seen,” says Walter McManus, director of the Office for the Study of Automotive Transportation at the University of Michigan. McManus further describes these drivers:
They have higher income, much higher than the average car buyer—approximately $100,000 a year
http://www.bls.gov/cew/state2002.txt
http://stats.bls.gov/news.release/empsit.t16.htm
A poster had accused the manufacturer not the dealer, of milking warranty work, etc.
What I said was manufacturers don't derive extra income from warranty work. Does that explain my post better :confuse:
I kind of disagree. EVs were coming along fine until the rug was pulled out from under them. Someone in power decided that hybrids would be a better compromise and not cut out the oil companies completely as EVs were poised to do. Hybrids have used existing technology much of which came from EV research. HSD is from a marine hybrid design. NIMH was a result of GM building the EV-1. so in essence the hybrid set us back a quite a few years with its compromise with the oil companies. The first hybrid being tested was a Chrysler diesel hybrid. It was a 70+ MPG vehicle that Chrysler scrapped. Chrysler could not believe people were gullible enough to pay the premium.
If you buy your first car and keep it 10 years. You make payments to the creditor the first 5 years and to yourself the last five years. Then you never have to pay interest on a car again. And you have money in the bank for that rainy day.
Granted the gas savings typically does not pay for the hybrid premium. So what? Does the upgraded sound system, alloy wheels, sun roof, etc... pay for themselves? Its all about the individual assigning value to a feature. If an individual values saving gas beyond the purely monetary level that is no more irrational than paying extra for most of the other options that a vehicle can be equipped with.
I don't think that is an accurate interpretation because I didn't state any of these decisions were actually irrational. I stated paying extra for a hybrid was no more irrational. There's a difference. But I'll go along with your logic, which means you agree that these other options that a vehicle can be equipped with represent irrational purchases.
And so should you.
Re-read post#21 - which was my first response to your post - which I started off by saying
"You are right - it's not very profitable for the manufacturers".
But the service department represents 90%+ of the total profits of a new car dealership. This allows manufacturers to take a much higher percentage of each new car's price for themselves. That's why the dealerships still stay in business and make profit.
Get it. If not you need a course in car business 101 - nothing to do with economics.
Yes, I read where you got snippy, once before, and said all this had nothing to do with economics.
What purpose does your posting about this once again serve? I responded to a statement that was made saying MANUFACTURERS loved doing warranty work, because it made them rich.
My post merely said that was incorrect because it was dealers, not NISSAN or TOYOTA, whatever manufacturer, didn't make money on warranty work.
You either agree or disagree that MANUFACTURERS love making warranty repairs, or you don't. You have made up some argument out of nothing. Everything to do with buying and selling; service, purchase, maintenance of anything, anywhere, is economics, btw.
There isn't any conspiracy, as some suggest. We are all free to have warranty work done at shops other than those of dealers. In most locations service prices are what they are due to Union workers, expensive equipment and general overhead. I am not saying, never once said, that DEALERSHIPS don't make money off of service. You have somehow taken my one statement about MANUFACTURERS not making money off warranties, and run it into a rant about DEALERS.
Please, lets move on.
In my mind, since I work damn hard to get the money I do, ANYTHING I want, insofar as electronics, that brings me pleasure or entertainment, is always a rational decision. So long as it doesn't infringe upon others, or is a safety issue.
We are getting away from the thread topic here in discussing wide-ranging psychological and life-style issues, no?
Nitpicking needs to stop.
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I am all for the Prius, as many of you know. I think it is great that it uses less gas. Today, right now, the top story on Yahoo site is the 10 most fuel efficient vehicles ...with Prius hybrid being number one.
However, I do admit that it costs more energy and gasoline and other nonrenewable resources, to make the hybrid in the first place. Plus , at the end of the lifespan of the car, it would cost more energy to properly dispose of the car , than say a regular car.
They have to bring the price down, so that more needy folks, the commoners, the blue collar and working class, can afford such a vehicle....IMHO.
I considered the hybrid...but could not stomach the price differential compared to a non hybrid, so I went diesel.
I think hybrids are good....but we should also encourage completely electric vehicles and other vehicles that run on renewable fuels...
A small car ( Prius sized) can be had for under $18,000, but even a used Prius goes over $24,000 !! True cost to own is way up there...
plus if you add in time saved by not going to the gas station, then you should also factor in time wasted to change the batteries, cost of new batteries, cost of society to properly recycle those batteries, etc....
just my opinion....
please show me why I am wrong.??
This surprised the hell out of me, but when you think about it, most of the Hybrids, especially the Camry and Highlander, are equipped at the same level as the ICE top-of-the-lines. Until I saw what they were paying, I had always assumed, based upon what I had read, that the premium for them was much larger....
Payback on Mercury Mariner Hybrid= NEVER or 344,153 miles whichever comes first.
What I was posting about was Toyota's, in their prices paid threads here.
I can't really see any purpose in just posting again and again, that you beleive there isn't any justification or payback in buying a Hybrid. I think everyone got your point.
her husband otoh, a bit more.
to me, it should be compared to the camry, not a corolla unless the only criteria is a driver only for commuting.
1. The media machine, somehow made people think hybrids will have greater depreciation than non-hybrids, when the opposite has shown to be true, and a lower depreciation rate is very important to the value/price equation of the car.
2. Batteries have a life of at least 150,000 miles, if not more, before you reach that point however, your going to want to covert your hybrid to a plug in, and you are going to swap out the battery pack anyway, this is only going to cost you $3000 for this new plug in li-ion battery pack(once it is mainstream), it'll be an upgrade, that will pay it self off quickly
3. The gas these cars are saving may not on paper show a payback for the purchaser, however it is very close with tax breaks, and reduced depreciation. But the fact that these cars are saving millions of gallons of gas is causing a reduction in demand for oil, which in turn depresses gas prices for EVERYBODY, not to mention less money going towards oil controling countries, and least of all the thing everybody dreds, clean air.
4. It is a fact that hybrid batteries are 100% recyclable
I think these 4+ points are enough to take into consideration for this post. I, myself do not own a hybrid, I will not buy a new car until it is an american hybrid that gets 50 MPG combined, and has the looks and utility that I desire at that time, or a full electric. In the meantime I'll drive old reliable used cars that barely contribute to the auto industry (only the autoparts industry benifits, and oil companies of course) But I won't support companies that won't deliver what I want at the price I want. Vote with your dollars, they speak the loudest.
Unfortunately, we have a poorly informed, unthinking, and emotional electorate.
The problem with plug-in hybrid conversions is that they were not originally designed with this in mind. While you can upgrade the battery pack and change the software the electric motors are still going to be rather anemic as a primary source of power.
I'm waiting for an all EV and I agree, vote with your wallet. The problem is that my candidate isn't on the ballot.
I think you have made it clear that the payback for you is not enough to get into your wallet.
I think that the Li-Ion battery situation is far from being realized. The major player in plug in hybrids is CalCars. They are still not selling the $12k packages promised in 2004. They are evidently in financial difficulty as they are asking for donations to keep afloat. There is nothing that would lead me to believe that you will ever see a plug-in hybrid with only a $3k premium. Even the $12k add on only gained you 30 miles at under 34 MPH.
A simple EV is more likely to become mainstream than a PHEV. I don't think it will be built in America. Keep voting with your Dollars. That makes the most sense. Keeping an older car running good is the most environmentally friendly thing you can do. Other than riding a bike.
For our overall society there were and are to us benefits. What sense is there in a cost of $2.25/gallon for gasoline (with all the complexity it takes to bring it to our tank) when compared to $3.50 or more for a gallon of milk that comes from a farm an hour drive away? I'd suggest that there are hidden costs and ways to redistribute our overall dollars (not wanting to get political here but let's be honest in a global marketplace) that influence that cost of a gallon of gas, and might be different if our country took a different view on gasoline-powered vehicles from, say Europe, where gas is much more expensive and things like public transportation are much more accessible and affordable. And yes, the early adopters tend to be those with more wealth (a relative term, we're by no means wealthy) which helps in a market economy to move a product segment that eventually results in lower costs. It's so with any technology - 20 years ago (and trust me, in those days lower-middle class would have been a good way to describe my family) we paid over $4,500 for a computer and laser printer that today would cost $800. DVD players that will no doubt be $30 again this year in holiday buying season cost $400+ when they first came out. People who wanted them or could afford them bought and the price came down. Payback? Only part of the equation. If we see return on investment as strictly the $$ in our pocket at the end of the day payback is one thing. Some also consider this in a different way - what is our investment doing for others or to improve the lot of all? Like our relatively green vehicle, we also have paid extra to purchase 100% wind-generated electricity, we donate to all range of charities with no expectation of a return on investment in our bank account, etc. Again, a complex equation.
Now, specific to the topic, we have calculated that if we keep the HH as long as it runs (our intention in the first place, we've tended to do this with all our vehicles) with gas prices fluctuating all over the place, we will probably about break even if we consider TCO of the HH compared to a _similar_ ICE vehicle. (We could have also just kept the Corolla but it was too small for our overall family needs.) Over that lifespan when compared to the vehicle it replaced we'd save about 2,800 gallons of gas, pollute less and drive those miles in a safer vehicle. And the HH was what was available at the time when we were ready to purchase. In another 135,000 miles (or maybe more, maybe less) we'll be given the choice again. Who knows? - John
61 % are men
71 % are age 35 or older
56 % are college graduates
35 % have an annual household income under $50,000
75 % are Caucasian
83 % are considering a Toyota
61 % are considering a Honda
--Above data is a compilation of results from AutoVIBES October 2003 through December 2003
I find it particularly curious that more than a third have annual incomes less than $50k even though the cheapest hybrid is more than $20K!!
I don't think any of those $50k per year households will be buying the latest from Toyota. The LS600h at over $100k.
Employees of mine making far less than $50K per year are driving brand new, Maxima's, Impala's, Avalon's and the like, top of the line models, leather seats, and surely costing as much as, if not more than $25,000. Go figure.
1) It is not comparable to the Corolla/Civic/Accent because it's bigger inside and has far more features than any of these others. Actually it is exactly the same size as the Jetta, both of which are in between the compact and midsized vehicles.
2) There is no non-hybrid counterpart to the Prius. To compare it you have to look at a lesser vehicle or a greater vehicle.
3) For basic transportation the Prius is not the right choice unless you want to drive the least polluting vehicle in mass production. A pre-owned vehicle is better for basic transportation.
4) Batteries: There was a huge thread on this subject all of last year. There is no need to replace them at any specified interval. They are expected to last the life of the vehicle ( new technology ). Therefore there is no cost to the owner.
5) The NiMH batteries are not in any way similar to the well-known lead-acid batteries in environmental concerns. In fact they have the footprint of a washing machine. The materials in them are non-toxic. But for good PR and to ensure proper disposal/recycling Toyota will pay a $200 bounty for every returned battery pack.
Those are the reasons why you are wrong
I am talking about twenty/30-somethings, some married with kids, most singles.
One, who is making $42,000, married, one kid, just bought a new Z. Was complaining about the damn payments, lol. :P
Many of them lease, and just turn it back in 36 months for another!
That may or may not have been the smartest move by Toyota. The way the TCH is selling I would say it was not a great move. The Camry has an audience of previous owners that seem pretty loyal. Selling them a hybrid version does not seem all that difficult. If Toyota builds up to the demand of the TCH, I would say it could surpass the Prius in one year. The Prius appeals to a very narrow audience. From reports there are many Prii sitting on lots since the incentive was cut in half. Sales at or near invoice are not uncommon. I think it is safe to say it has nearly run its course. Without the big tax credit and HOV stickers not many buyers are interested. The dealer I talked to about the new Tundra said his TCHs are all presold. He did have a Prius if I was interested.
The goal last year was 100,000 ... 107,000 sold
The goal this year is 100,000 ... on track I believe
The goal next year is 115,000?... TBD
But one thing is certain there are a lot of current owners chomping at the bit to see what the next iteration will be in Oct 2008.
The TCH should match the Prius numbers next year at about 8-10,000 units a month ( KY + Japan ). If the demand pushed it to 200,000 units, why not? They are looking to add 200,000 units of capacity at the Subaru plant in Indiana. This could be all standard CE/LE models with all the hybrids staying in KY.