Originally Posted by Persi & Alley
Gas only accounts for 20% of owning a car. Depreciation, interest, maintenance, insurance, etc. account for the other 80%. Thus, if gas prices went up by 50% to six dollars a gallon, the gas cost of owning a car would only go up to 30%. It's just that gas prices are so visible and we tend to forget the major costs of owning a car. With that thought in mind, DW and I are taking the Porsche a hundred mile out into the country today just for the heck of it with the full knowledge that gas prices are really only a small part of the price of our expedition.
Here's an important point. Probably the least expensive car to operate would be a used economy car, say like the Cobalt that my wife drives. Buy it used for $7,000, get 30 mpg (more on the highway), and low maintenance costs.
The next least expensive would be a cheap, used non-economy car. My MIL just sold her Lincoln Town Car for $2,000. It was 8 years old, had less than 100,000 miles on it, and got 25 mpg on the highway, 20 city. I bought a used 1978 Chevy Caprice in 1980, the last time gas got really high (in fact, gas has only now reached the same price on a time-adjusted basis). I paid $3,500 for it. It had 30,000 miles on it. I drove it another 30,000 miles in the next two years, by which time gas had gone back down and I sold it for $3,200.
If you drive a car 15,000 miles per year, and it gets 30 mpg, at current prices you would pay $1,750 per year for gas. The Cobalt listed above would only cost you $15,750 to own and drive for five years, counting just the purchase cost and gas. If you got 20 mpg, you would pay $2,625 per year, or only $875 extra. The Lincoln Town Car would cost you $13,125 for 5 years.
If you bought a Toyota Prius, which is getting about 45 mpg (I just checked several "real world" sites to find out), and costs about $22,000 new, you would spend only $1167 per year in gas, about $600 less than the Cobalt. But you would pay a total of $27,833 for five years of ownership.
All these figures assume the cars have no value at the end of five years. Obviously, the Prius would have SOME value. In checking Kelly Blue Book numbers, I would expect it to have a trade-in value of about $7,000, but it MIGHT also be due for a complete battery replacement, which costs about $5,000.
It gets really confusing, doesn't it.