Secrets to better gas mileage - see how much money you save by raising your MPG

[Markmysite]

When I was shopping for a more fuel efficient car, I made an Excel program to factor in all the costs, do MPG comparisons, decide whether a new hybrid made sense for me, etc. I figured this would be helpful to others to use as well. You can figure out whether or not spending money on a modification is worth the investment, see what kind of money you could save if you got a certain MPG, and whether or not buying that new more fuel efficient car makes sense financially. Below is an example of what it looks like and a link that goes to an active spreadsheet program. You can make changes to it to for your needs. It's very easy to use, just follow the 4 steps and it will do all the math for you. You can also save it to your own computer by clicking the "export" button at the top right area.Click here to view the program "Secrets to Better Gas Mileage" I'm also going to put this on Digg.com to get more awareness out there. Please make sure to digg it here: CLICK HERE TO DIGG THIS ARTICLE AND RAISE AWARENESS

[Whelan]

I realize many are still penny pinching about fuel, but I have kinda sped up a bit again. Mileage is not in the 260s instead of 280-300 per tank. Gas is now under $4 a gallon. Around me it is as low as $3.74 some places. It's amazing what hanging out in the $3 range for so long does to ya, it seems like a bargain. I'm back down to low $40 fillup.

[joatmon]

Looks like it might be a useful tool for a potential car buyer. Two questions though1. It appears that the tool indicates the secret to better gas mileage (from the thread title) is to buy a car that gets better gas mileage. Probably just an AR semantics thing about the thread title. Is there some way that the tool can help improve gas mileage that doesn't involve buying a new car? Since I'm not going to buy a new car, and the Vibe is paid for, it would take a huge gas savings to make it more economical to replace it. 2. If the tool shows that the Honda Fit would save you money, why did you buy the Vibe instead?I wonder what the difference is in cost to insure a Prius vs. a Vibe. Or the projected differences in annual maintenance costs. Or forecasted resale value at the end of the loan period.

[Markmysite]

Whelan, yeah it is nice that it's back under $4... but only barely here. When hypermiling I'm getting about 450 miles out of a tank before I refuel (leaving less than a gallon in tank). It's crazy to get this type of mileage when I was driving a Durango or my 300C SRT8. They had bigger tanks of course and less than half the mileage... heh~~~~~~~~~~~~~~~~~~~joatmon, actually if you click the page link it goes to an active spreadsheet. You can then change values and see how much money you would save if you used better driving techniques, etc. At the bottom on that page there are some of the Hypermiling techniques that I use.I got a used 2007 Vibe with only 7,000 miles on it for $11,800 (when they are going for $15-$16K). I was considering the Fit, but I liked the Vibe's looks better, and it has more storage room. I haul large items for work and the Fit would be just a tad small for it all. The insurance costs are only a little more for new Prius to new Vibe, but the maintenance costs would be higher with a Prius in the long run I bet. The resale value on the Vibe is not good as we all know (even compared to the Matrix just bacause it says Toyota on it). Used 2007 Prius's are going for well over book value currently. The craziest example right now would be the SmartforTwo. They list price at around $11,000 - $16,000 and they are selling for $21-$25K on eBay because the wait list for a new one is 18 months. I just don't get it. They are so small, have no luggage space and can only hold 2 people.... heck, you can't even recline the driver seat back ... 40mpg is nice ... but for $25 grand ... ouch!

[joatmon]

it's a crap shoot to guess what resale values will be five years from now, However, your calculations don't take that into account. You are using a five year cycle for the loan, when the loan is paid off you have the capital asset of the used vehicle, and the value of that asset needs to be part of the comparison. Not knowing what resale values will be five years from now, lets assume that the value of both vehicles drops the same amount (say $5K, doesn't matter, if they both drop the same amount), then the only real non-mileage (and non-maintenance) cost difference is the extra interest paid on the higher prinicpal Prius loan, about $1500 more interest on the prius than the Vibe. Using the miles and $/gallon in the pic you posted, it would take only two years at $63/month for the Prius to break even compared to the Vibe, the other three years woud all be profit, and at the end of the 5 year cycle, the Prius would end up saving you about $2300 compared to the Vibe, not costing $6K extra as your pic shows That is a significant difference.

[Markmysite]

True, after 5 years you own the vehicles and if you don't plan to sell them ever them the residual value is pointless. But you would not net a $2,300 savings with a Prius. The break even point on a Vibe vs. a Prius would be seven years at aprox. 15,000 miles per year. The gas savings you had on the Prius will catch up 2 years after the vehicle is paid off. The Prius would be almost $6,000 more in cost at the end of the loan (5 years in my example). However, we're still not taking into account the higher insurance premiums on the Prius for those 7 years, the maintenance costs, etc.Most any financial expert always uses a 5 year proforma for a capital expenditure, which is why I picked 5 years. You could do it at 7 or 10 year too.

[engineertwin2]

Actually, maintenance costs for the fiancee's '03 Prius have been on par with my '04 Vibe GT. Further research shows that if your premise is based on battery replacement, the batteries on the Prius are getting significantly longer than warranted and to date under 200 Prius' have had their batteries replaced. To further allay the costs, Toyota recently dropped the cost of battery replacement nearly in half.Also, I'm not sure that your numbers are accurate for the costs of the vehicle. I didn't see any indication as to what options/accessories were priced to ensure an "apples to apples" comparison.Most financial experts take into account life-cycle costs and net value of capital assets to perform a NPV analysis. That's what you need.

[joatmon]

I thnk that by ignoring the value of the asset after the loan is paid off allows the results to be skewed in favor of a desired result, to show that the hybrid is not worth the higher purchase price. It assumes that at the end of the loan period all cars have zero value. Another data point is that I have owned my Vibe for a little over five years now, the price of gas has gone up 300% since I bought it. What will the average price of gas be over the next five years? You could make a lot of money if you knew that answer, but if you took the last five years as an example and extrapolated, then maybe a price of $6, or $8/gallon would be more realistic. Terrible to contemplate, but as the price of gas goes up, the Prius gets to be a better deal, even if you assume the car is worthless after five years.At 6 or 8 per gallon, the Prius is likely to depreciate a lot less than the Vibe, could be that total loan cost minues the resale value of the prius will put you money ahead of the Vibe, even if you ignore monthly fuel costs. Then again, in five years, there may be new fuels or new technology that make the Vibe a dinosaur, or the hybrid system in the Prius seem primitive, and nobody will want to buy either. Or, since the Mayan calendar ends on winter solstice of 2012, doing a 5 year cost comparison in 2008 is pointless because the world will end before the five years are up.

[Markmysite]

I used the same website to pull (base) model costs before adding extra options. The Prius does include way more options standard to be fair.The whole point of this spreadsheet is to let people go onto an active page (the link.... not just this picture shown here). You can then do the math on any 3 cars you are looking at, or just see how much money you can save if you improve your driving habits with your current car.I had the Fit, Prius and Vibe on there because that's what I was shopping for (had narrowed it down to those for hatchback reasons and needing the storage space and rear deck height for work purposes).

[Markmysite]

joatmon brings up a good point. If gas were to go up considerably the Prius will certainly be more favorable (but you can use this spreadsheet to see just that ... that's the whole point of it). And if you drive a lot more the Prius is more favorable.I didn't assume that the value of the cars will be zero at the end of 5 years. I actually did a comparison of a Prius and a Corolla on another web forum for someone.....~~~~~~~~~~~~~~~~~Here was the response from someone on gassavers.org and my reply:Quote, originally posted by R.I.D.E.;115226 »Check the resale values of high mileage cars of the types you are considering.Would you rather have a Corolla with 125k, or a Prius?You may be surprized at the value comparison.regardsgaryA very good point Gary. Anyone buying a car who plans to sell or trade it in ... within 3 years or so should factor that in.My sister (who works in auto finance) wanted me to buy a Matrix because they hold their value better just because it says Toyota vs. GM. For me, I know I will put a ton of miles on this car since I got it for work and will drive 30-40K miles per year on it for work alone. Resale wasn't a factor for me, but true it is for most people.Your upfront purchase cost, whether buying a new at sticker or getting a good discount, or buying a used car at over book value ... as in the case of many fuel efficient cars on lots right now vs. buying one under book value all would affect a 5 year return on investment. Many dealers are charging up to $7K over MSRP for a Prius because they can due to demand.I thought about all of that but it is tough to integrate into a spreadsheet like this without doing every single type of car to be fair.But to answer your question, I personally would rather buy a used Corolla with 125K miles than a Prius with 125K miles. Why? The residual value on the Prius will be higher and it will be quite a bit more than a Corolla would. The Corolla engine is very proven and I wouldn't be surprised to see over 300K on this engine. The gas engine part of a Prius ... I'm not sure how long they last to be honest.... not enough data out there yet.NADA Values2001 Prius w/ 125K miles = $8,850 (EPA = 41mpg combined)2001 Corolla w/ 125K = $6,050 (EPA = 31mpg combined)Autotrader search2001 Prius (within 300 miles of me), with over 100K milesAverage Asking Price: $9,359 (only 4 of them listed)2001 Corolla (within 300 miles of me), with over 100K milesAverage Asking Price: $5932 (over 39 of them)Using calculator to compare:It would also be much, much harder to find a used Prius than the Corolla, and most dealer lots would charge over book value for the Prius, but under book for the Corolla. I also worry about the batteries long term. I know there are some Prius cars out there with big miles on them and the batteries are still working ... but are they holding the charge good still at 200K miles without dropping FE ... I find it doubtful? I just had to replace my electric golf cart batteries after only 5 years. They are NiMH also and I use an auto charger system. "Toyota says that for the best service life, the Prius battery likes to be kept at about a 60 percent charge. In normal operation, the system usually lets the charge level vary only 10-15 percentage points. Therefore, the battery is rarely more than 75 percent charged, or less than 45 percent charged." So, Toyota claims the lifespan of their batteries will be longer than that of a regular NiMH battery because they keep an optimal state of charge on them. So does my golf cart ... still had to replace them... lol.~~~~~~~~~~~~~Keep in mind above that the original MSRP of the 2001 Corolla was $12,568 and the MSRP of the 2001 Prius was $19,995. So they both depreciated about the same ... Corolla 52.8% and the Prius about 53.2% by my math. But if I was buying a used car I'd go for the Corolla because it would be cheaper.... unless gas was at like $8 per gallon like joatmon says ... but then again the Prius value would go way up so it would be a good time to sell one if you had it.

[ryan04gt]

its funny how lots of people that used to buy them for the environment, didnt realize how much worse for the environment the manufacturing of a prius was, compared to any other car. yeah, you save lots of gas compared to a h2, but the environmental impact of manufacturing (and operating) a prius is 3 times worse than making a hummer h2.