Hybrid Vehicles Not Best Value According to Edmunds.com

[doh]

http://biz.yahoo.com/bw/080625/20080625005404.html?.v=1

Chevrolet Aveo is Cheapest to Own Over Five Years; No Hybrids Rank in Top Ten


SANTA MONICA, Calif.--(BUSINESS WIRE)--High gas prices, the housing crisis and general economic uncertainty are motivating consumers to look for the least expensive cars to own and operate. A new study by Edmunds.com, the premier online resource for automotive information, indicates that many compact and subcompact vehicles are actually better choices than hybrids for consumers looking to save money. The data also suggests that only one hybrid, the Honda Civic Hybrid, would break into the top ten least expensive vehicles if gas prices were to increase to $5 per gallon. The results are based on Edmunds.com’s True Cost to OwnSM data, which accounts for total vehicle costs over a five-year period.

Unlike some other analyses that look only at fuel economy and sticker price, including one released by Consumer Reports last week, the True Cost to OwnSM study incorporates projected model-specific average vehicle ownership costs, consisting of depreciation, financing, taxes, fees, insurance premiums, fuel costs, maintenance and repairs. When all of the factors are considered, some popular vehicles look considerably less appealing on a cost-per-mile basis than their fuel economy would suggest.

“When consumers think about cars that will save them money, hybrids are typically top of mind because of their fuel efficiency,” said Jesse Toprak, Edmunds.com Executive Director of Industry Analysis. “But when you take a look at the real-world costs of car ownership, you realize that many subcompact and compact cars are actually a much better value proposition.”

The study evaluated the True Cost to OwnSM of vehicles assuming gas prices of $4.06 (the national average on June 23), $5 and $6. With gas prices at $4.06 per gallon, the standard model Toyota Prius costs owners $0.50 per mile -- ranking 33rd among all vehicles. The top-seeded Chevrolet Aveo, on the other hand, costs $0.42 per mile, resulting in annual savings of $1,200 to consumers who choose the Aveo over a Prius. In the event gas prices rise to $5 or $6 per gallon, the Aveo remains in the top spot and the Prius moves to positions 25 and 17 respectively.

The following are the 10 least expensive vehicles to own (all 2008 models):

[minnfang]

Give me a Beat!

[AMERICA 123]

Given the limitations of the model, its at least notable that the conclusions came out correctly - if possibly a little understated.


Gee, I guess the Aveo doing so well here helps explain why we 'gots' all the negativity towards it today.

[eurohazard]

This is HILARIOUS!

Who would have thought that the cheapest cars, which also are small and get good gas mileage, would be the cheapest to own over 5 years? I agree with the findings. However "cheapest" and "value" though they work together, are not the same thing.

[I-Love-Pontiac]

All right Aveo! Too bad it isn't a more exciting car.

I'd rather have a Prius than the Aveo just because it's more interesting.

[PhishPhood]

This has never been a question. The cheapest vehicles are always the best to own if minimizing TCO is most critical. In the extreme a 2003 Malibu is the better choice if one is only concerned about driving it for 5 yrs and miminizing TCO.

It's hard to beat a good reliable used vehicle if the ownership period is limited to about 5-7 yrs. Especially when it can be bought for 25-40% of original Selling Price.

Hardly shocking finding by Edmunds.

[doh]

I started selling cars in 1990, the dealership had just been sold to my new boss, but the old and long time owner stuck around to get my boss on his feet. (and secure his finacvial involvement)

When he left the scene in 1993, he purchased a 93 Fire Fly for $8999 and put a 5 year warranty on it. He said (and I rember till today) if it lasts 5 years @ 2000 depre/year he is ahead of the game.

He took it on a trip from Canada to Texas on $48 worth of fuel.

I can't wait for Ford's B class car, not saying that I will get rid of my truck/Windstar but there are many driving situations that I could save on.

[F14CRAZY]

Do the vehicles on the list beat out the Cobalt XFE because of their lower selling price?

[K-1]

Originally Posted by PhishPhood

This has never been a question. The cheapest vehicles are always the best to own if minimizing TCO is most critical. In the extreme a 2003 Malibu is the better choice if one is only concerned about driving it for 5 yrs and miminizing TCO.

What is the #1 reason people are moving to hybrids? To save money on gas. What good is saving money on gas if you're paying out the wazoo in financing and depreciation? People don't look at the big picture.

[PhishPhood]

Originally Posted by K-1

What is the #1 reason people are moving to hybrids? To save money on gas. What good is saving money on gas if you're paying out the wazoo in financing and depreciation? People don't look at the big picture.

Here is the other side of the real world situation that this article doesn't address directly but they do leave it for the reader to decipher.

It has never been a question that buying the least expensive vehicle on the lot is the best way to save money from a TCO point of view. This article reconfirms that fact.

But... the buying public is not monolithic. Neither a well off person who has driving a small BMW for the last 14 years nor a soon-to-be-retired couple that has been in one of the first Lexus RX300s in 1999 are going to even consider buying an Aveo or Yaris or some other basic transport. They are looking for a more economical vehicle, with fuel economy equal to or better than a Yaris or Aveo, but with features near to what they had on the nicer vehicles that they're getting out of.

This is a HUGE and varied market which for the past 20+ years has supported sales of premium and semi-luxury vehicles costing $25000 to $50000+. These buyers expect something better than 4 wheels and 4 doors. But they are not immune to the need to save fuel. They however will never even look at the least expensive vehicle on the lot. They are in fact looking for the most expensive vehicle that saves fuel. A $25000 priced vehicle is on the low side of what these buyers normally spend on transportation.

On the other end. For the young struggling couple or recent HS or College grad that has little or no money and for whom the price of fuel is a HUGE burden on their initial incomes the basic transportation is the way to go.

This in three paragraphs is the marketing success of the hybrids. Recognizing this diversity of incomes of the buying public has allowed Toyota and Ford and Honda to tap into a solid vein of comfortable to well-to-do buyers who still don't like spending excess money on fuel. It has little to do with greenness or enviro-consciousness, it's mostly dollars and cents while maintaining a certain level of amenities. It's bang for the buck with regard to fuel economy, amenities and price.

The amenities factor is specifically left out of the JD Power and the Edmunds articles recently because the buying public knows its own tastes and requirements. The Yaris, Fit and Aveo will never be considered at any time by a former Lexus owner. He or she will just cross the basic ones off the list. But that's all personal there's no way to quantify it.

[eurohazard]

^ Good post Phish. I agree 100%

[motorman]

Originally Posted by I-Love-Pontiac

All right Aveo! Too bad it isn't a more exciting car.

I'd rather have a Prius than the Aveo just because it's more interesting.

if you want cheap transportation you get a aveo,if you want excitement you buy a corvette.

[Geotpf]

The Prius is a high tech midsize. The Aveo is bare bones subcompact. These studies are never apples to apples comparisons, when you look at all the real world variabiles.

If your only goal is to save money, buy a $500 clunker. Or a bus pass.

[tgunnd39]

Originally Posted by doh

http://biz.yahoo.com/bw/080625/20080625005404.html?.v=1


“When consumers think about cars that will save them money, hybrids are typically top of mind because of their fuel efficiency,” said Jesse Toprak, Edmunds.com Executive Director of Industry Analysis. “But when you take a look at the real-world costs of car ownership, you realize that many subcompact and compact cars are actually a much better value proposition.”

Wow, you mean perception and personal belief are not actually fact?!

I am shocked!

[AMERICA 123]

Well, there is that difference as well, - the more important one would be those two versus reality -which upon rereading your post I realise you have correctly id'ed - we agree.

Imagine that. The Prius shot down by the Aveo.

Who could have known ?