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Monday, June 25 2018

On buying a car (part 1)

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I recently got rid of my decrepit car, and replaced it with a 2013 Ford Fusion Hybrid.  This may surprise people. In the past, I've argued that used cars (especially 2-3 years old) were the better deal, and that hybrid technology is too immature to be cost-effective.  So, using a 2013 Ford Fusion Hybrid, a 2013 Ford Fusion (Gas), and a 2010 Ford Fusion Hybrid, let's investigate the following questions:

1) Which is a better deal, used or new?

2) Is now the time to buy a hybrid?

Let's do the analysis, on the basis of the fuel prices, alone.

 

Fuel efficiency MSRP Price premium for 2013 FFH MPG
2013 FFH 27200   47
2013 FFG 21900 5300 29
2010 FFH 20500 6700 39

1) The new car costs $6700 more than one 3 years old.  If I drive 15,000 miles per year, with the improved fuel efficiency, I breakeven in just over 15 years, if the average price of a gallon of gas over that time gets to $6.87.  It'll take a little over 17 years if the average price is around $6 (which I think is a good guess.)

2) The hybrid costs $5300 more than the gas.  Hybrid pays for itself, now, in less than 5 years.

 

So, purely on the basis of gas cost/savings, it seems that the new car *probably* doesn't pay for itself, but the hybrid does.  (Since I bought the new car, one can assume that there are other factors besides fuel savings that go into the purchase decision...)

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