Are hybrid vehicles worth the extra cost
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Are Hybrid Vehicles worth the extra cost?. Ryan Pietropaolo NCSSM January 2012. Goal. Compare costs of Hybrids with non-hybrid vehicles. Compare environmental impacts i.e. oil use Cost of owning a vehicle. Brain-Storm Variables. i nitial cost m iles per gallon f inancing rates

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Are Hybrid Vehicles worth the extra cost?

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Are hybrid vehicles worth the extra cost

Are Hybrid Vehicles worth the extra cost?

Ryan Pietropaolo

NCSSM

January 2012


Are hybrid vehicles worth the extra cost

Goal

  • Compare costs of Hybrids with non-hybrid vehicles.

  • Compare environmental impacts i.e. oil use

  • Cost of owning a vehicle.


Brain storm variables

Brain-Storm Variables

  • initial cost

  • miles per gallon

  • financing rates

  • gas prices

  • tax rate

  • maintenance

  • repairs

  • average lifespan

  • insurance cost

  • depreciation value


Apples to apples comparison

apples-to-apples comparison

  • 2012 Honda Civic Sedan

  • Hybrid vs. LX


Basic assumptions

Basic Assumptions

  • Driving habits: 15,000 miles per year; 50/50 city/highway

  • Purchased in North Carolina (Durham County)

  • Inflation 3% per year

  • Insurance: same coverage, based on car value

  • Equal Maintenance costs


Initial costs and financing

Initial Costs and Financing

  • Hybrid: $24,050; LX: $18,655

  • no money down

  • 48 month loan on initial cost only

  • 4% annual interest, compounded monthly


Monthly payment

Monthly Payment


Monthly payment cont

monthly payment cont.


Repayment cost

Repayment Cost

  • Annual Cost:

    Hybrid- $6516LX- $5054


Fuel costs

Fuel Costs

  • Hybrid: 44 miles/gal (combined city/hwy)

  • LX: 33.5 miles/gal (combined city/hwy)

  • Current gas price: $3.35 (inc. 3%/year)


Cumulative fuel cost

Cumulative Fuel Cost


Are hybrid vehicles worth the extra cost

Tax

  • New car tax rate – 7.3% (North Carolina)

  • Yearly Property Tax Rate- 1.2481% (Durham)

  • Depreciation Rate:


Cumulative tax cost

Cumulative Tax Cost


Yearly maintenance costs

Yearly Maintenance Costs

  • 5-year estimates based on previous models

  • Increase 3% each year after year 5


Yearly repair costs

Yearly Repair Costs

  • 5-year estimates based on previous models

  • Increase 10% each year after year 5

  • Repairs same for both models

  • Battery Packs generally last the life of the vehicle and reduce engine wear. (.2% F.R.)


Yearly insurance costs

Yearly Insurance Costs

  • Liability insurance costs are equivalent for both vehicles. ($450 per year)

  • Non-liability costs are determined on the depreciated value of the car. (3% per year)

  • Owners only carry liability insurance after the ninth year.


Oil conversions

Oil Conversions

  • 42 gallons of oil per barrel

  • 45% of oil becomes usable gasoline

  • Super Tanker carries 2 million barrels of oil

  • 21,000 Honda Hybrids sold in United States last year


Extensions

Extensions

  • What current gas price would make it cost effective to buy a hybrid?

  • At what point should you sell your SUV and buy a hybrid?

  • Comparisons involving Electric and Diesel.

  • When is it cost-effective to build light-rail transit?

  • What is the impact of the CAFE standards on oil dependence?


Questions comments

Questions / Comments

Ryan Pietropaolo

NCSSM

[email protected]


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