Mar 8, 2009 0
Mar 4, 2009 7
New Cars are Expensive
Out of curiousity, I did some calculating to see how much it would cost to buy a new 2009 Toyota Prius vs. a used 2006 Volvo S80. The two cars are obviously not in the same class — the Prius being a compact sedan and the Volvo being a large Midsize sedan — the Volvo also being a much nicer car in terms of interior, etc… The Prius would come with 0 miles on it, and the Volvo somewhere around 40,000 miles. I’m very comfortable though buying a used car with < 50,000 miles on it.
I compared payments after $4000 down, with a 36 month term on the loan, at 4.75% (realistic numbers if I were in the market for a car today). I looked at scenarios where I’m driving 10,000, 12,000, 14,000, 16,000, 18,000, and 20,000 miles per year, where gas is at $2, $4, and $6 per gallon.
The Prius gets 46 miles per gallon, while the Volvo gets 22 miles per gallon, on average, according to Edmunds.
The results? It’s more expensive for me, on a monthly basis, to buy the new Prius than it is to buy the used Volvo in almost every scenario. The only case in which the fuel economy of the Prius actually saves money overall is if I’m driving more than 18,000 miles per year, and gas is $6 per gallon.
Monthly Payment + Gas, Prius vs. Volvo
And yes, I am a total yuppie for doing a spreadsheet cost comparison between a Prius and a Volvo at 1:30am. I make no apologies.
