10 December 2009

Prius vs. BMW

I bought a 1998 BMW 323is about nine months ago for $7,000. Although I never considered buying a Prius (ugly! non-performance!), I've always thought that I never WOULD have, given the cost-benefit of price versus improved mileage.

Let's actually work out the numbers.

Since I bought the BMW (which actually has a 2.5 liter engine), I've got about 28mpg. According to the Feds, a 2007 Prius gets about 46mpg; according to AutoTrader, it will cost about $20,000. (This lets us ignore the impact of "demand for new cars" on the environment.)

So, with gas at $4/gallon, $13,000 of price difference, 18mpg of economy difference, and about 6,000 miles/year (I've driven 4,000 miles in 8 months), it would take me about 39 years to recover my initial higher investment (if I bought the Prius) in terms of saved fuel economy. If I drove 24,000 miles/year, breakeven would arrive in just under ten years.

Oh, and that's ignoring all the benefits of living with an "ultimate driving machine" :)

Bottom Line Some people buy a Prius to save money; some people must have other reasons.

16 comments:

  1. jfc - Gas is $4/gallon in California?!?!?!

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  2. Twenty grand for a Prius is waaaay overpriced.

    For a more accurate comparison, you'd have to compare similar years, mileage (for used cars), & warranties.

    I can get a used 2005 Prius in Sacramento (Prius heaven) for around $15K. What 2005 BMW should we compare this to?

    Actually, I'd prefer the Escape Hybrid. 36 mpg with 4wd. Right now, bargain-shopping, one can find it for around 18K, still too high, but getting to around break-even (I calculate around $15K) for the type of driving I do.

    I calculate things like, total miles driven (I drive 30+k per year), terrain and utility of the vehicle (about 80/20 onroad/offroad).

    Of course, it's all out of reach right now. But, our two cars (Subaru Forester and Nissan Sentra) both have over 200k miles on them, and run beautifully.

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  3. 1) You're driving at least 1/3 less per year than what's typically assumed for the average American driver (and a lot of estimates actually assume 15k miles, not 12k).

    2) The feds list the mileage estimates for the 1998 323i as 18 city, 27 highway, 21 combined, so you must be doing only highway driving.

    3) You're clearly not thinking about repair and maintenance costs. A BMW's costs will clearly outpace that of a Toyota.

    Bottom line: For a more typical driver that doesn't just drive on the highway, a Prius, shockingly enough, is cheaper than a luxury vehicle. And it's better for the environment.

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  4. Yah, I researched Kelly Blue Book value for an excellent condition 2001 Prius, and it is just under $7k. So your above analysis changed to reflect that similar aged cars would have similar prices, puts the Prius ahead.

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  5. You can pick up a used 2000 or 2001 Prius (more comparable with your decade-old BMW) for maybe $8K on craigslist. If you drive conservatively, you might get 55mpg. Gas is more like $3/gal (I just filled up for $2.73/gal near the Bay Area)...

    For an extra thousand bucks, it looks like crimpin' your style might be worth some big money!

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  6. @All -- your comments are accurate, but I'd MUCH rather drive a 10 yo BMW than Toyota (workmanship).

    Further, my point is also directed at the "cash for clunkers" rhetoric that we should trade in a used (but decent) car for a "high efficiency" new one. I didn't make that clear.

    Finally, I'd never trade this in for a Prius -- merely b/c I drive so seldom (as was pointed out, but is also part of MY calculus) and b/c I drive freeway so often.

    Oh, and my commuter vehicle is my bike :)

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  7. Great you picked the week of Copenhagen to tell smarm us! If you used the feds numbers for your car, lets suppose the BMW gets 23 and the Prius gets 46. So you can pollute 2X as much carbon per year as a prius driver. Now if only all Americans would think this out as clearly as you have..

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  8. yeah -- I've got this thing nailed. Now, can the average American drive 6k miles?

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  9. Dude, I don't believe you. I believe you've been sold on BMW the brand-name and status, hence your reference to:
    workmanship, even though Toyota quality has only been challenged in the past three years, and by that I mean challenged for the most reliable car on the planet, bar none; it still jockeys for first, & BMW doesn't;
    an advertisement slogan (the ultimate driving machine).

    Bimmers drive smooth, and Priuses aren't sports cars, so the feel is very different, but mileage and impact + reliability go hands-down to the Toyota.

    As for Cash 4 Clunkers, the long-term effects of removing a less-efficient chunk of equipment are going to be good. The new C4C vehicles will drive a long, long time, and will less competition from less efficient cars, will improve the used-car market within a year or two. I think I've read something on Kahn's blog about the negative effects of well-running, but dirty equipment.

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  10. @Josh -- I've driven both, and I prefer the BMW.

    As for impact, I think that DESTOYING RUNNING CARS (per CfC) was just about the stupidest waste of resources I've ever seen. If you want sustainable car use, check out the Cubans (by force) or any poor person (by necessity).

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  11. I made the used BMW / new Prius comparison myself in 2001. I opted for a 1995 BMW 318ti, so David's choice seems right to me. I never would have gotten the pay back on the higher cost of the Prius in fuel savings as I drive less than the average driver too. The ti averages 26 - 27 mpg in normal driving. My kids are still driving the car.

    Based on the low used car prices for Prius' quoted above you would have to add depreciation to the cost of driving. The battery pack wil also likely need to be replaced before the rest of the car wears out. The batteries are not cheap, and the nickle metal hydride batteries are not without environmental impact. The true impacts and costs are harder to see becuase of the long supply chain for batteries and the subsidies that hybrid cars get make the costs less transparent.

    I owned a used Camry for my wife to drive at one time. It was very reliable, but not as fun as any of my BMW's.

    That said, I expect to own a hybrid car in the not too distant future. It would be great to have a hybrid mini van for my wife and kids.

    Bottom Line: Our utility functions are heterogeneous and the future costs are uncertain. Without certainty and homgeneous wants, I can't think of a substution for individual choice.

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  12. "I've driven both, and I prefer the BMW." That's it. Trying to convince yourself of the economic utility of a Bimmer over a Prius was a smoke-screen; you like Bimmers more than Priuses, and you were able to afford one, too. Good on ya.

    I still think Kahn's commentary about very polluting, yet long-lived equipment, is biting us in the butt.

    If everybody had to do what the Cubans do, our air would be way worse than it is now. Also, consider my comments about our cars, and you'll see that you can include me in this category, too. My dad's 86 Ford Ranger has over 500k miles on it.

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  13. @Josh -- there are always trade offs, but cheaper AND better means none for me :)

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  14. ps/look at Cuban emissions/capita. You need to adjust your scale. I am NOT saying that they are better off; I am saying they have a smaller (b/c poor) footprint.

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  15. But maybe Cubans don't drive as much as they would if they lived in Miami. Is Cuba's emission per mile driven less than in the USA? If the smaller footprint is strictly because they are poor and drive less, then the mpg of the car is a separate matter.

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  16. They have a smaller footprint because they are dirt poor. They are also often hungrier and sweatier per capita than we are, and far more susceptible from dying from things like the weather.

    As for the Bimmer, I don't mind when a person really likes something because it appeals to them. Just don't pretend there's an economically viable reason for it; admit you were swayed by the commercials and the fact that it is a luxury car, like you did in the first sentence of the blog post.

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