- Bargaineering - http://www.bargaineering.com/articles -

Buying A Prius Is An Emotional Decision

Have you seen all the Toyota Prius commercials lately? The ones with the people dressed up as foliage and climbing on top of one another? It was to highlight how “green” the vehicles are and announce that Prius was launching another generation of the hugely popular hybrid-electric. At first, my wife didn’t even realize they were people and I, to this day, think it’s just a little bit creepy. 🙂

However, despite the creepiness of the ads and the whole slew of new hybrid-electric cars [3], I still would love to have a Prius (or a Tesla [4]!). The only problem I have is that it’s not a financially sound decision. It’s an emotional one (which is fine too!).

The distinction may seem unnecessary, right? People buy cars for emotional reasons all the time. You buy one type of vehicle over another, in part, because of what you think it says about you (which is fine!).

Buying a car for emotional reasons is perfectly fine… as long as you know that’s what you’re doing.

Making an emotional decision is perfectly acceptable! It is your money, you earned it, you can spend it however you like. You can buy a car because you like new car smells or because you want to make a statement. You did the work, you get the spoils! The point of this post is that it’s important to recognize when you’re making an emotional decision and not to trick yourself into believing it’s a financial one.

The Prius

If you really want fuel economy, there are plenty of cars that give you similar performance without the toxic battery and with a stick price under $22,000 starting price. If you look at the third generation Prius [5], you’ll see that the estimated MPG is 51 city, 48 highway. Those are pretty good numbers right?

The Smart Fortwo

Take a look at the Smart Fortwo, a tiny little vehicle that has the ability to get up to 45.9 miles per gallon with a starting price of $12,000. Ben at Ecomodder took the Smart Fortwo on a test drive [6] where he listed the pro’s and con’s of the Fortwo.

The Difference

From a strictly financial perspective, the Smart Fortwo is a better value than a Prius. Assuming all other financial costs are the same, which is a huge assumption given the Prius’ battery and the Fortwo’s diminutive size, gas would need to be $5 a gallon for 26 months before the Prius’ fuel-sipping hybrid premium would “pay off.”

While 26 months doesn’t seem like a long time, $5 a gallon gasoline is also really really expensive. Last year, the average retail gas price peaked at $4.054 during the week of July 14th, 2008. California, known for ridiculously high gas prices, peaked at $4.588 during the week of June 16th, 2008. (Gas prices data [7] provided by the Energy Information Administration)

So while a Prius is nice and does conserve fuel, it’s important that we understand it’s an emotional decision and not a financial one. Too bad we don’t have a clunker [8] we can trade in. 🙂

(Photo: MaryMactavish [9])