Tuesday, December 23, 2008

The Cost of Going Green

Driving around Stanford and the neighboring upscale suburbs brings to mind the 1978 film, “Invasion of the Body Snatchers,” in which alien pods replaced earthlings as they slept. As we sleep, Hybrid Priuses are gradually replacing every other make and model of car, including Volvos, the long, venerated, automotive symbol of socialist Sweden. A Prius, which gets over 45 miles per gallon, is the ultimate green symbol.

What’s the cost of going green?

A comparison between two different Toyota models, the Prius and the non-hybrid but otherwise somewhat comparable Corolla, reveals the cost. The basic 2009 Corolla can be purchased for $16,150 plus sales tax; in California, that brings the price to about $17,525. The stripped-down Prius sells for about $22,000; with tax, $23,870. The difference in the initial purchase price is $6,345.

The web site, automotive.com, presents data on the cost of ownership over a five-year period. For the 2008 models, the estimated costs of ownership, which include depreciation, financing, insurance, repair, state fees, maintenance, and fuel, amount to $23,372 for the Corolla, and $24,083 for the Prius. The comparison presumes mileage of 15,000 per year. Prius does better on fuel: $368 in savings with gasoline at $2 a gallon; $552 at $3/gallon; and $736 at $4/gallon. The savings rise as miles driven and the price of gasoline increases. But the Corolla is less costly for all other elements of ownership.

The data on used car prices fluctuate wildly, depending on mileage and condition. An internet search of 2001 Priuses reveals prices ranging between $8,000-12,000, with comparable Corollas ranging between $6,000-9,000. Using a rough average, Prius owners recover about $2,500 more than Corolla owners in resale value.

All in all, the cost of going green is on the order of $1,000 a year. But these numbers apply during normal times.

In December 2008, with a glut of cars in dealers’ lots, a 2009 Corolla is available for about $14,000, while a similarly discounted Prius, available only for the top-of-the-line model, goes for about $24,500. The puts the annual cost of going green at about $1,200. An extra $100 or so a month is small change to the average affluent resident of the mid-peninsula Bay Area.

Merry Christmas (and/or Happy Chanukah) to all, and if you want to keep your current car, be sure to leave the garage lights on all night!

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