Leaf buying rationale: TCO or mid-life crisis

[DaveinOlyWA]

At one point, a used Prius sold for more than new around here. Maybe we are in some kind of bubble up here, dunno.

i bought my first Prius a 2004 package 1. drove it 30,000 miles in 25 months. paid $22,414.59 out the door. (got about $800 on tax rebate back)

a lady in a crew cab F-250 pulled out in front of me and Prius was totaled in Aug 2006. her insurance company paid me $23,800. i put $1700 cash on top of that and got a 2006 Prius package 4.

so ya, sometimes resale values are crazy. i sold that same Prius last spring for $13,000 it had 54,000 miles on it. if i had waited a month, i could have gotten another $1500 to 2,000 for it after the Tsunami

 

[thankyouOB]

That gets back to my main "LEAF buying rationale": reducing the use of oil, with all its nasty geopolitical and economic consequences. For that I was willing to buy the exceedingly expensive, not remotely cost-effective, new LEAF. "Voting with my dollars", so-to-speak.

I buy some of what you are saying; I too want to pat myself on the back for being green but I also point out that I am saving money.

 

[Yodrak]

The "correct and logical" comparison for any one person depends on that person's situation. Some people prefer to buy new, some people prefer to buy used. Some people need to replace an existing car now or in the near future, others do not.

Wait a minute, Colorado, you just went all apples to oranges on us.
I thought the correct and logical TCO is new car to new car, not used to new.

You illustrate my point - not everyone is you, and what's 'right' or 'best' for you is not right or best for everyone. We each need to decide for ourselves if our situation is closer to yours, closer to dgpcolorado's, or closer to someone else.

Besides, I dont buy used.

 

[thankyouOB]

The "correct and logical" comparison for any one person depends on that person's situation. Some people prefer to buy new, some people prefer to buy used. Some people need to replace an existing car now or in the near future, others do not.

Wait a minute, Colorado, you just went all apples to oranges on us.
I thought the correct and logical TCO is new car to new car, not used to new.

You illustrate my point - not everyone is you, and what's 'right' or 'best' for you is not right or best for everyone. We each need to decide for ourselves if our situation is closer to yours, closer to dgpcolorado's, or closer to someone else.

Besides, I dont buy used.

of course, I agree, except for CO introducing the idea that TCO should compare a new Leaf to a used something else.
There are no universal TCO answers. Most of all, buying decisions are commonly a mix of the cost and personal preference.; i.e How much cost weighs in vs. how much personal pleasure trumps that, and vice versa.

I doubt any of us can say that it was purely one and not the other.

 

[Aeolus]

I did not decide on the LEAF until I had a handle on the TCO, and particularly the TCO if I installed a PV system on my roof and took advantage of Time of Use rates.

The bottom line of the dual investment was so attractive that I had to recalculate it several times, pinch myself, and ask "What's the catch?".

Including the charging station, new main panel and upgrading the power supply to my house, I basically invested $22,000 net after tax credits and rebates, to buy electricity for my home and automotive fuel for the rest of my life.

My house immediately became worth $20,000 more so I don't have to calculate some "payback".

That gives me about a 14% return on my investment, tax-free for life, protected against inflation. At 60+, the LEAF may be my last car, and the panels are guaranteed for 25 years of power production.

Without the solar, the electric car was still interesting. Without the electric car, installing the solar was much harder to justify. Increasing the size of the solar array by 25% only increased the cost of my system by around 10%, but with time of use rates, I could zero out my bill if I only generate 80% of the electricity that I use.

I had to use my wife's gas-guzzling Prius once for an unplanned quick trip to San Diego, and I'll use it again when we go camping, but here in Socal, the range and the availability of charging stations make the range just fine.

And I take great pleasure every time I drive knowing that my car is powered by fresh, clean California sunshine.

 

[dgpcolorado]

...That gets back to my main "LEAF buying rationale": reducing the use of oil, with all its nasty geopolitical and economic consequences. For that I was willing to buy the exceedingly expensive, not remotely cost-effective, new LEAF. "Voting with my dollars", so-to-speak.

Hmm, I think I've said this before, but either I've bought wisely or been very lucky. So far, over the last several new car purchases, I've been able to buy and resell several "green cars" within a couple of years of ownership in the Seattle area for remarkably close to what I bought them for. Time will tell if the Leaf holds it's value in it's niche like the hybrids and TDI's I've owned. If I can get away with it, I'll keep upgrading to newer models for only a few thousand loss each year. The tax credit also creates the possibility of somewhat bolstering the value if there are enough buyers out there that don't qualify for the credit and will therefore be more inclined to buy used. Also bolstering the used market up here, is new car buyer guilt. There are a bunch of folks up here that buy used simply because they feel guilty about the environmental impact of buying new, and they are willing to pay nearly new prices for newish used cars.

At one point, a used Prius sold for more than new around here. Maybe we are in some kind of bubble up here, dunno.

I'm wondering about resale value as well. I wouldn't mind trading in for a newer model of EV in a couple of years if there was little cost for doing so. But the resale values of a LEAF are a complete unknown at this point.

And you may well be in a weird "green vehicle" bubble there in the NW that is not applicable to other areas of the country. I've mentioned it before, but where I live "real men" drive trucks. So, green cars like Prii are fairly uncommon around here and the LEAF census is just one: mine. Hard to know if I could get a good trade-in or sale price or not. I figure I'll end up keeping the LEAF for decades, as with my previous cars.

 

[dgpcolorado]

Wait a minute, Colorado, you just went all apples to oranges on us.
I thought the correct and logical TCO is new car to new car, not used to new.
Besides, I dont buy used. I dont know the car's history. I keep cars for 10+ years unless they are in a severe accident. I want them taken care of from day one. That has worked for 35 years.

You raise an interesting point. Financial planners would disagree with you. TCO should be based on general transportation needs and used cars are almost always cheaper, ofter MUCH cheaper, to own and operate than new cars. That is probably even more true nowadays since cars are so much more reliable than they were two or three decades ago and can be expected to last at least 200K miles. Of course, it is necessary to select the used car with some care to be sure that it has been properly maintained and that it is a model with a good reliability record. But that isn't all that difficult to do.

The fact that you keep your vehicles for a long time puts you way ahead of those who trade in for a new car every few years (and essentially have car/lease payments for life). But you could improve on that a bit by buying a late-model, low-mileage used car and skip the instant depreciation one gets from driving a new car off the lot. You also would likely save money on car registration fees, sales taxes, and insurance by buying a used car versus new.

None of this would work for the LEAF because, thus far, there is no meaningful used LEAF market, nor any reliability history.

 

[dgpcolorado]

...My house immediately became worth $20,000 more so I don't have to calculate some "payback"...

I work as a volunteer at my county assessor's office and here the appraisers do not add any value to a house for PV because they can find no data that suggests it adds to house selling prices. That may be different in your area.

 

[Aeolus]

I work as a volunteer at my county assessor's office and here the appraisers do not add any value to a house for PV because they can find no data that suggests it adds to house selling prices. That may be different in your area.

http://green.blogs.nytimes.com/2011/04/21/study-finds-solar-panels-increase-home-values/

That is the conclusion of three researchers at the Lawrence Berkeley National Laboratory, who looked at home sales — both homes with photovoltaic systems and homes without — in California over an eight-and-a-half-year period ending in mid-2009. The abstract of their study states, “the analysis finds strong evidence that California homes with PV systems have sold for a premium over comparable homes without PV systems.”

There's a hot market in Socal for houses that have been upgraded with a modernist aesthetic and lots of green features like LED lights, energy star appliances, skylights, solar, fruit trees, raised garden beds, lawn-free water saving yards. It's not a huge percentage of the market, but it's a niche where the demand is bigger than the supply.

 

[tps]

Wait a minute, Colorado, you just went all apples to oranges on us.
I thought the correct and logical TCO is new car to new car, not used to new.
Besides, I dont buy used. I dont know the car's history. I keep cars for 10+ years unless they are in a severe accident. I want them taken care of from day one. That has worked for 35 years.

You raise an interesting point. Financial planners would disagree with you. TCO should be based on general transportation needs and used cars are almost always cheaper, ofter MUCH cheaper, to own and operate than new cars.

This is why, in 40 years of driving, I've never has a new car. The LEAF will be my first. If TCO was the aim in this case, I would not have gone for the new LEAF; I'd have waited until the current crop of LEAFs came off lease. But not waiting was more important. Until my LEAF arrives (hopefully in 2 weeks), the Hertz rental LEAF was the newest car I've ever driven, with 220 miles on the odometer the first time I took it out.

 

[TomT]

Yep. I had a BMW M3 that I drove for 5 years and subsequently sold for more than I bought it for new...

so ya, sometimes resale values are crazy.