Discussion in 'Economics, Business, and Taxes' started by justoffal, Mar 22, 2012.
That depends on how long you keep it and how high gas prices go.
As you point out the Doble was a luxoury vehicle, that's a fickle market. The Volt actually could well pay for itself if most (90%) of your driving is city driving. If you really are looking for economics in that setting, a car of any sort is the wrong thing to buy. Because it's cheaper to take mass transit and rent a car for long hauls.
I hadn't heard of the "number of fasteners" angle, but it makes perfect sense. The measure I've heard in the past, was "man hours to build" (or something like that). Back in the 90's when the Ford Taurus was all the profitable rage, I remember reading a comparison between it and Chevy's competitor - the Lumina. It was said that it took around 30 man hours to build the Taurus and 65 to build the Lumina. Of course it makes sense that the product requiring fewer man hours would be more profitable. But, the equally critical point was that fewer man hours - as a result of more thoughtful engineering, made for a better finished product as well.
So as to fasteners, I remember having to - in the same week - remove the driver's door panel on my '91 Nissan 240SX and a friend's '91 Mitsubishi Eclipse. The difference was dramatic. The Nissan panel had (2) fasteners and came off and went back on, in one big piece. You couldn't help but put it back on perfectly. The Mitsubishi on the other hand, had at least (10) fasteners. In order to put that one back on, you had to carefully align each piece - sometimes just guessing as to the proper alignment - and carefully torque each screw to non-rattle tightness, but not so tight that you distorted or broke something.
That Nissan was one of the best cars I've ever owned. I wish I could find another, but the kids have turned 'em all into drifters. The Mitsubishi on the other hand, was a falling-apart rattletrap, after about 60,000 miles.
Fasteners drives Man Hours to build... vs. the other way around. That was part of what the CPDA study found. That even in a car that had more assembly time but fewer fasteners, the reliability numbers were higher.
In addition to fasteners, there have been leaps and bounds in valve-spring technology that have vastly improved engine reliability, especially for high-RPM small motors. Little things do indeed mean a lot.
Daily drivers are up to 10 years .
But again that's not accurate. Because if you drive it 75% in the city "short haul". That means that 75% of the time you don't use Gasoline at all since you are 100% EV. and 25% of the time you get 90MPG (highway). So your annual cost is 5,000 miles at 90 mpg = 56 gallons or $222. Times 7 $1,555 For a savings of $10,600. And with $7,500 tax rebate ($13,500 if you live in CA) you are within $3k of breaking even.
And if you hold the cars for 10 years - which is more of what people are doing today - your Cruze milage goes up to 150k with a gas cost of $16,666 (and its really going to average more like $5/gal over 10 years so that really is $20,000). Using your 93 mpg calc that puts you at $6,451 in gas costs for a $10,221 savings PLUS $7,500 in tax rebate and you just about broke even. At $5/gal AVERAGE over 10 years (its going up like it or not) using your calcs your gas cost is $8,064 for a cost savings of $11,936 Plus $7,500 in tax rebate, puts you within $500 of break even
And if your driving is 75% urban the numbers go even higher. Your 10 year 150,000 milage gas costs are between $1,111 and $1,390. Vs $16,666 - $20,000 for the Cruze. that's a savings of between $15,555 and $18,610. Plus the $7,500 rebate and you are IN THE BLACK by between $3,000 and $6,000
Yeah it does pay off.
Well except that Chevy et. al. didn't start to take advantage of that until the late 1990s. By then their reputations were pretty much shot.
Another place we may steer ourselves wrong in terms of comparing the cost-efficiency of one automotive technology with another, is that we tend to assume that for the sake of our proximate argument, cost is dispositive. For instance above, we see a comparison between a Volt and a Cruze. Elsewhere in the past, we've seen similar comparisons between the likes of Corolla and a Prius.
When we compare costs in this manner, we accept it as a given that the consumer "must" make the cost/rational choice. But of course, consumers of cars have NEVER been constrained by pure efficiency considerations. If they were, there'd be no Lexus, or BMW, or Lincoln. Nobody "needs" these tatted-up marques and none represents the most efficient alternative. YET...consumers buy millions of them.
That's an excellent point FS. Because if car buying was purely an economic exercise, Porsche, BMW, Lexus and Audi would be out of business.
Degs -- no argument there. GM went downhill badly from the late 70s until at least the late 1990s. They make great cars now, but it's hard to regain a lost reputation.
I may buy a 1967 El Dorado or Toranado. Front wheel drive, 350 horspower, and air conditioning to chill a meat locker.
See I would like to believe that. I really would. But I drove SOOO many sh!tbox GMs from Avis over the last 20 years, and my experieince with my '89 Suburban was so crappy (no other vehicle did what it did, but the quality SUCKED) that I just have a hard time getting over that. (See I'm not rational all the time either). My GF has a Toyota Rav4. And its the classic Toyota. A bit noisy, rattles a bit, but all sorts of things about it are nice and it JUSK FVCKING WORKS.
Every marque and every model, goes through "cycles". There are points in the cycle where the manufacturer's imperative is sell the brand and points where having sold the brand, it can "rest on its laurels" and seek to wring more profit out of the brand. It behooves the auto consumer to know where the car he's considering buying, is in that cycle.
I'll suggest that the likes of GM, Chrysler, and Hyundai are in the "proving themselves cycle". Therefore, (depending on the model) their offerings may be good buys. In order to reestablish their brand, or in the case of Hyundai, to establish their brand, they need to offer somewhat more value than their competitors.
Other marques, like say...Toyota, Honda, and VW are in more of a "resting on their laurels" phase. That doesn't mean they're BAD values. It just means that they don't need to be quite the values of some of their competitors.
For a useful illustration of these cycles that most would be familiar with, we can track the up-down-up life cycle of the Ford Mustang, from 1964-1/2 to 2013.
Separate names with a comma.