Does the Prius hybrid make any cents at all?
Maybe. If everything lines up right.
The new (current generation) Prius is first of all – in my experience, at least – much more fuel-efficient in real-world driving than the earlier models. I test drove one of the first ones years ago in the same conditions – rural SW Virginia, hilly terrain, mostly higher-speed (over 50 MPH) driving and with me behind the wheel. (I do not drive in such a way as to “optimize” fuel efficiency.)
So driven, it only averaged low 30s, which I thought (and still do think) sucked. Or – to put it more seriously – wasn’t good enough to justify buying the car. I said so in my review at the time. The real-world mileage of the first-gen. model was probably never going to amortize the higher up-front costs, even if you drove it for eight-plus years. Keep in mind that back then (circa 2001) unleaded regular still only cost about $1.60.
So while the original Prius may have made cents as a city car, put-putting from block to block, if you ran one regularly on the highway at speeds above 60 MPH or actually tried to keep up with traffic on secondary roads instead of being the focal point of a rolling roadblock – well, then the only thing green about it was the money it cost you.
A conventional IC compact could do about as well – maybe better, overall – for much less coin.
But the new one (which has the benefit of several key upgrades, including more efficient batteries) really did pull the advertised 50-plus MPG. And it was capable (with me driving it, here in the mountains, and not slow) of averaging low 40s. 
Even the best of today’s compact economy sedans only average about 30 MPG.
Also, gas now costs a lot more than it did when the first Prius came out ten years ago.
Consider:
15 gallons of fuel (a “tankful” in a current medium-ish cars) costs about $51 at current prices.
In a car like the Prius that averages say, 45 MPG, that will take you about 675 miles. (This is just for purposes of illustration; the 2012 Prius actually has a smaller-than-usual 11.9 gallon tank. A non-hybrid of about the same size as the Prius will typically have a bigger tank, closer to the 15 gallons used for purposes of discussion here – for the obvious reason that it needs more fuel to go as far. EPA rates the Prius’ range on a full tank at 606 miles – which works out to 50.5 MPG, so the math in our discussion is actually a little conservative).
In a standard car that averages 30 MPG (remember, city mileage in a standard IC car is usually much lower than highway mileage; the current class-leading Ford Fiesta, for example, only rates 29 MPG city whereas the Prius rates 51 city and 48 highway ) the same 15 gallons will only take you about 450 miles.
So, the Prius gives you about 225 “extra” miles of driving per tank, relative to an IC car like the Fiesta. Which works out to a savings of about five gallons of gas (the amount of additional fuel you’d have had to buy in the standard car to cover the same distance). Or about $17 at current prices ($3.40 per gallon).
That’s not chump change in today’s economy.
Let’s assume two fill-ups per month. You’ll save about $34 a month in fuel costs relative to the 30 MPG average non-hybrid car. Times twelve, that’s about $408 a year. Over a ten-year period, your at-the-pump savings would come to $4,080 (assuming today’s gas prices remain about the same).
It sounds good. And it is good.
Now come the caveats.
The first one is that while the Prius has gotten better, so have non-hybrid new cars. It’s not so much that they’ve gotten more fuel-efficient. The big thing – the thing that matters – is that they also getting cheaper. For instance, you can buy a 2012 Nissan Versa sedan for $10,990.
The Versa sedan has almost exactly the same front and rear seat head and legroom as the Prius; in fact it actually has slightly more backseat legroom (37 inches vs. 36 inches) and only a bit less trunk/cargo space (14.8 vs. 21.6 cubic feet). True, the Versa’s gas mileage isn’t particularly spectacular – 27 city, 36 highway (so about 30 MPG average). But its MSRP is only $10,990 vs. $22,120 for the base 2012 Prius I. Don’t grab your calculator; I’ll save you some work: The difference is $11,130.
You could buy two new Versas for the cost of one new Prius. Or, you could buy (roughly) 3,200 gallons of gas at current ($3.40 per gallon) prices. Which – assuming 30 MPG average – will take you about 106,000 miles. That would be the point at which the Prius’ superior fuel economy finally catches up to the superior up-front economies of a car like the Versa.
Of course, if you drive a lot, then that 106k break-even moment may arrive sooner rather than later, in which case – viva Gorditas! – the Prius begins to make cents.
And also - gas prices could double. Not so much because there’s less of it around but because there’s more money around. Inflation could change the math again – and back in the Prius’ favor. At $7 per gallon, the Prius begins to pull ahead, financially speaking, after about 3-4 years on the road.
The bottom line is the latest Prius can ( at last) make cents …. if the variables stack up right.
That’s more than you could say about the original one.
I’d still like to see them cut the weight by about 1,00 pounds – or use a diesel instead of a gas engine for the IC side of the powertrain – which I’m betting would result in a 60-plus MPG vehicle.
Now that would make some real cents… maybe even some dollars, too!
I would think that the math would be in the Prius favor if the car was used in commuting long distances, stop and go traffic. The commute to Los Angeles for example.
Taxi cab use would be a no-brainer. Mostly in town traffic, and miles accumulate quickly. Delivery vehicle use, such as delivering legal paperwork. The station wagon version could be very useful for delivery purposes.
Generally though, I agree with your math. One concern I would have is that the more complicated a car is, the chance that something could break down and need repairs increase considerably. Hybrid vehicles would be more difficult to DYI repair. The repair bills would buy a lot of gas…..
Yeah, I’d worry about that (down the road repair costs) too. But I’m the type of guy who will drive a car until it’s very close to the end of its economically useful life – about 15 years and 200k or so. It’d be interesting to find out how long the average Prius owner keeps his car.
The other factor, of course, is the cost of fuel. It’s already high enough to work in the Prius’ favor after about 100k or so of driving. But if fuel goes to $6 or $7 per, that timeframe will narrow considerably.
PS: I have a couple of 60-plus MPG motorcycles in the garage to cover that eventuality!
I would expect that the battery and other expensive things would need replacement well before the 15 year or 200k mark. I would think about 8 years or 100k before expensive things go wrong. Then the choice would be to perform the repairs that normal cars would not need, or to sell the car early for less money than one would sell a normal car for. Either choice could mean an economic impact that a regular car would not have. That cost would have to be factored into the decision. Even a 1000 dollar repair could buy 143 gallons of gas at 7 per gallon. That could buy about 4300 miles of travel at 30 mpg in a normal car.
In the real world, the eco-yuppie that buys a Prius does not think of such things. They want to help the environment. An elderly friend of mine calls them a Pius instead of a Prius for that reason. I live in Portland, Oregon. There are lots of eco-yuppies here. The Pius is quite popular here.
I just realized that the same repair cost factors are why BMWs are worth comparatively little when they get old. The Pious and BMW repair costs become so high that a car needs to be sold at a low price if it can be sold at all, or the repair costs become so prohibitive that they go to the car graveyard when they are only middle aged.
“Pious” – love it!
On the rest: Yes indeed. It used to be that a used/older BMW was a cool car to get. You let the original owner eat the depreciation, but the cars were so well-built that provided they’d been taken care of, they could be counted on as regular daily drivers for years to come. But they’re increasingly cost-prohibitive for second/third owners to deal with. Once a recent model (probably anything much newer than circa 2000 or so) gets about 100k on the clock, you don’t want it. Not unless you have deep pockets and enjoy hassles….
I’ve done these sort of calculations before. My favorite vehicles of comparison are civic (gas) vs. civic (hybrid), but that really doesn’t matter to the method. Eric has done the same thing, but he stopped when the versa had used up the fuel to equal the off the showroom floor cost of the prius. That’s not where things catch up. The Prius has to consume fuel to get to 106K. The cost of this fuel means the versa could go further yet… then the prius consumes fuel to get that point… each round the prius will get a little closer to equal cost. When I’ve done this calculation civic to civic I just stopped around 200K when the gas car was still ahead on cost.
On to the math….
Cost difference ($3.40)
miles Versa (30mpg) Prius (50mpg)
106,000 + $7208
169,600 + $4324
207,760 + $2594
230,656 + $1557
244,394 + $ 934
252,636 + $ 560
257,582 + $ 336
260,549 + $ 201
262,329 + $ 121
263,397 + $ 72
264,038 + $ 43
264,422 + $ 26
264,653 + $ 15
264,791 + $ 9
264,874 + $ 6
264,924 + $ 3
264,954 + $ 2
So, at 265,000 miles, the two vehicles assuming $3.40/gal gasoline have had the same purchase and fuel costs.
Now of course other factors like oil changes, wear parts, and repairs may change that break even number, but we can safely assume that saving on fuel by spending more on the vehicle is not a reason to choose a prius given these conditions.
Brent, thanks for the math… It appears that the Pious is not cost efftective at current gas prices, but might br if/when gas prices double. Yet that would only be the case if both cars were kept around lnng enough.
I would expect that the Pius would rack up higher repair bills. Can someone who has owned a Pius a long time offer some real-world experience?
This has been an interesting, logical discusion!
I bought a 2004 Prius in 2009, with 110K mile, now 146K. I checked repair history of the car by Toyota dealer, nothing other than oil change and scheduled check up. I only replaced spark plug, serpentine belt. The breaks on this car is still original, since in most cases the motor plays the role of breaking, unless you break hard enough.
Many people worried about the hybrid battery’s replacement cost. But I never heard anyone’s battery fail due to aging. In Canada, a guy who use Prius as taxi reported that his Prius reached 350K kilometers (220K miles), and the battery still good. The main reason, the battery is charged between 30-70%.
BTW, Gen 2 (2004-2009) is very close to Gen 3 (2010 – ). If your priority is get the most value of the car, buy the Gen 2, but wait a couple of month until Prius inventory back up later this year.
In my case, the Prius is the best fit, because of the lower used price (I paid $8000), high mpg, low maintenance (nothing breaks so far) and my long commute(125 miles).
If you are interested in Prius, check out priuschat.com. Lots of very knowledgeable people there, and great information.
Good stuff, Allen – thanks!
So far, I haven’t heard about any problems with the Prius, either – and I’ve been covering this stuff for years…
I prevoiusly commented on my suspicion that the Pious would have expensive issues later on in its life. Based on Allens comments, the expensive issues do not occur in the cars middle age (100K) As long as the issues do not occur till the car nears the 200k mark, I guess it does not matter. If a car is engineered well enough, the expensive parts would not need to be replaced until the car is nearly worthless. At that point, any expensive part, or more than one mid-priced part, would send the car to the junk yard.
I do not mind if I learn that my previous opinion was incorrect.
There are at least several “Ifs” I can think of that apply:
* If you want a brand-new car;
* If you are a fan of the technology;
* If you drive mostly in urban, stop-and-go traffic
Then a Prius can be a reasonable choice.
But if you really want to save money on your transportation costs, then it seems to me the smartest thing to do is buy a lightly used economy car (something like Dom’s Yaris) which should be obtainable for $8,000 or less – then drive it for the next 15 years.
I have no doubt (because I’ve run the numbers) that my ’98 Nissan Frontier has cost much less to own and operate than a new Prius. I’ve had it for about eight years now; bought it used for about $7,200. It’s still worth close to $4,000. It only gets about half the mileage the Prius does – but so what? I’m still way ahead, overall. And I have 4WD for the winter, too!
Agreed, Eric
Since I like to keep costs down, I want to drive well made cars that do not break down much in the first place. An older one with low mileage is preferable to a newer one with higher mileage. The more basic cars are less of a challenge for a determined DYI guy. A Pious would mean dealing in more advanced electronics than I am comfortable with. If I were to touch unfamiliar electical parts, I could be in for a “shocking” experience.
No thanks, Doms Yaris seems more appealing.
My spare vehicle is a 1994 Nissan Hardbody pickup. It has 225,000 miles on it. My son drove it into the ground for the last 50k miles. When I got it back from him I needed to do quite a bit of work on it, including a newer interior from a Pathfinder from a junk yard. I put in Rammat sound deadening while I had the carpet out. For well less than 1000 dollars, and a lot of my own time, it is worth hanging onto for several more years.
By the way, I bought it from a family friend seven years ago for 700 dollars. It had a deep dent in the door and cab. Oh well…. That is cheap, easy to fix transportation.
I have no pride…. (for a second vehicle)
PRIDE COSTS MONEY
Amen!
That Hardbody Nissan truck is known to be almost unkillable (except for one thing – rust). My ’98 Frontier is basically the same truck, updated a bit. But very similar where it counts and (in my experience) just as durable. Out here in rural SW Virginia, one sees a lot of them. My neighbor’s son has one with 225k on it. Looks/drives like a near-new truck. I have 134k on mine – and still have the original clutch, the engine is tight (good compression, strong vacuum) and everything else – even the AC – still works perfectly. I fully expect to be driving this truck regularly for at least another 3-5 years, by which time it will be pushing 20 years old. Leaving aside gas and maintenance, the truck has already almost paid for itself and is near the point of being “free” transportation. My net cost – about $3,500 as of today (that’s the original $7k I spent to buy it less what it’s still worth now) works out to about $41 a month over the past seven years.
Even if I am spending $200 more a month on gas than I might have if I’d bought a Prius instead, I’m still ahead by probably $200 a month at the least – and that’s not factoring in the peripheral costs of new car ownership such as taxes (much higher), insurance and so on.
My biggest what if is, take the electric motor and batteries off this thing, what mileage does it get then? It would be lighter after all. Or even better, take that engine, put it in the Yaris, what would that get? I don’t even know how to get a 1.8 with 13:1 compression below 100 hp but they did it! It’s actually kinda cool, no belts sounds great.
Point being, I don’t think being a hybrid figures nearly as much as they’d have us believe into the MPG numbers. I could be wrong, I haven’t studied it much. But the new Yaris in Japan allegedly hits 60mpg. I think the diesel Polo does that, too, or better. So if the objective is getting that kind of mileage, but at 3000lbs, I’m not particularly impressed.
Fritz,
Size does matter! Prius is a midsize car, so 3000 lb is reasonable.
The main reason Toyota’s hybrid system saves gas is because of the smart design of the Power Split Device. This site illustrates its concept very well: http://eahart.com/prius/psd/
I know I’ve brought up my old CRX HF before on this site(twice now), but it highlights how we’ve gone backwards in MPG.
If you really want to save bucks try to find an old CRX HF in decent shape and save huge bucks in gas over the best the majors have to offer today.
CNN also had a good write up a few years ago going into details similar to Peters last write up, using the CRX HF as a “baseline”:
http://money.cnn.com/2007/12/17/autos/honda_civic_hf/index.htm
Btw, I had this car when I was 19…I’m ashamed to say I goofed off in it pretty bad and wrecked hit, during the actual wreck the car flipped end over end three times and slid to a stop on its roof.
I walked away with a gash on my back due to a tool box I had in the back…that was it.
The “safety” issue of lightweight cars is really a non-issue if the car in engineered properly and gov’t regs removed.
Yup.
I’ve often thought it would be a fun demonstration project to take a light car like the CRX, fit it with two things – a modern overdrive transmission and low rolling resistance tires – and gauge the result. I’m betting close to 60 MPG would be possible.
…I’m curious as to what eco-conscious peeps will thinking when all of the 500 pound batteries start needing to go to the landfill?…
Me too – but it’s an issue that’s never (as far as I have seen) raised outside of a few “serious” publications. Surf around and see. What happens to the batteries – and where the batteries come from – are two aspects of the Green Machines one almost never hears discussed…..
Well written article! We have often “weighed” the advantages of the Prius vs other economy cars. Now over 10 years old, our 2001 Prius has 145,000 miles – it is comfortable, economical, and with regular oil/filter changes, has been the best car one could ask for. The aux. battery cost $80, replaced in 2008 at about 80,000 miles. We replaced the other battery, at the cost of $2400 at 140,000. Even at that, it’s the best car ever!