Re: The Drive-a-Toyota Act
- From: "Mike Hunter" <mikehunt2@xxxxxxxxxxxx>
- Date: Wed, 1 Aug 2007 14:22:07 -0400
Perhaps but what part of 'Assume two buyers buy exactly the same $25,000
car,' they BOTH buy Toyotas ;)
"DH" <dh@xxxxxxxxxxxx> wrote in message
"Mike Hunter" <mikehunt2@xxxxxxxxxxxx> wrote in message
If one wants to calculate the TRUE annual cost of ownership, one must
take into consideration the total cost of acquiring a vehicle, insuring,
maintaining, repairing and operating that vehicle and at some point the
replacement cost for another new vehicle.
Assume two buyers buy exactly the same $25,000 car. One buyer is the
average American new car buyer who replaces their car in three to four
years. The other buys a new car every ten years. The average person in
the US drives 15,000 miles per year. For a 3, 4, and ten year old cars
that will 45K, 60K and 150K miles. The average deprecation in 3 years is
20%, in four 30%, in ten year 95% For the purpose of calculation,
assume the cars have four year 60K warranties and the owners are covered
by equal insurance policies, at the same cost, both cars use the same
amount of fuel, each vehicle needs an annual state inspection at $75,
every owner performs all of the required normal preventive 5K
maintenance, that averages $50, as well as the required 15K maintenance
that averages $400, each has a major repair $1,500 and a new vehicle goes
up $1,000 a year. You can set you own average shop rate and part prices
to make the comparison. Assume warranty covered repairs, the 45K, 60K and
150 maintenance need not be added in, since the owners will be replacing
In ten years, after they both have purchased another new car and the
cycle begins again, who will have spent the most money per year?
The guy that didn't buy the Toyota.
Are you surprised ?
Not at all.
The average depreciation for three years is NOT 20%, it will be much
larger than that, 20% for the first year would be a start (and it's often
higher even than that) and the average depreciation for 10 years is NOT
95%, 70-80% is probably more in line, even for American cars (my 7 year
old Toyotas are worth about half their original purchase price). And
those are simply estimates, anyway. One does not include the cost of a
replacement vehicle in figuring out the lifecycle cost of the first
vehicle; one uses the trade value or private party sale proceeds from that
first vehicle to determine the actual depreciation. For planning
purposes, you can use an estimate. When you get to the end of the 3, 4 or
10 year ownership, you use the actual figure to determine what the real
operating cost was.
It's also important to the buyer who keeps his vehicle 10 years to choose
his new vehicle wisely. I am not spending $400 in maintenance very year
on my Toyotas and I have yet to see a $1,500 repair bill on any of them.
They are 6, 7, 7 and 8 years old at the moment. They start immediately
under all conditions, the engines are nearly silent in operation, there's
no detectable loss of power and *ALL* of the accessories work (including
the windows go up and down at full speed).
Also, for planning purposes, I have noticed that high mileage appears to
dramatically drive down the value of a car. If you don't drive much, your
depreciation expense on older cars can be greatly reduced by lower mileage
(especially if it's a relatively desirable car), so keeping them longer
may look more attractive.
"Nza" <thenza@xxxxxxxxx> wrote in message
On Jul 3, 3:54 pm, "Cathy F." <clfrc...@xxxxxxxxxxxx> wrote:
I just checked the Toyota's site: the hybrid battery's warranty is for
years/100K miles. I tend to keep my cars a while, & the longest I've
kept one has been 8 years, the shortest was 4, and usually it's 6
personally wouldn't even begin to factor in the possible eventual cost
new battery when deciding on purchasing a hybrid.
Let's say someone buys the car used after 5 years and the battery
immediately fails. Is the warranty going to cover the new owner?
The last time I bought a battery for my 1979 Celica, it was a generic
Advance Auto cheapie battery. It was a 24 month battery, but it is
still good. It cost about $60. The toyota cost me $400 from Ebay,
$140 in diesel fuel to drive 1000 miles round trip to get it (it was
in 2000), and $50 for an "in-town" trailer rental..
Once I got the car, I found that the motor needed freshening. I put ~
$800 into the motor and parts for it. I have had to spend $450 on six
tires so far. Replaced the brake master cylinder ($40 ebay), the
clutch master ($25 ebay), the transmission (brother ran it out of
fluid) with one from another parts car (labor only). Replaced the
pitman arm ($30 ebay) and the idler arm ($25 ebay).
Total that and it's $2020. I have no idea what i've spent on gas
over the last 45,000 miles I've put on it in the last 5 years (didn't
drive it for two when i first had it), but around town it gets around
18 - 20 mpg and on the road it gets 28 - 30 mpg at 75 - 80 mph all day
I can't understand why someone would *want* a new car..
Let's just say all those miles were in town, getting 20 mpg, with gas
at $3,00 per gallon. (although i know that more than half of the miles
were highway and significantly LESS than $3,00 a gallon)
45,000 / 20 = 2250 gallons.
2250 * 3 = $6750
$6750 + $2020 = $8770
45,000 miles / $8770 = ~ 5.13 cents per mile.
Now *THAT* is what I call an economy car. I challenge *anyone* with a
new car to come up with an operating cost that low.
Stick that in your tailpipe and smoke it.
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- Re: The Drive-a-Toyota Act
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