JRP3
Hyperactive Member
Yes if people were logical that would hold true, and certainly some are. However many people don't really think ahead, which is obvious when you see how many purchased an over sized SUV and complain about the price of gas.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
I agree, I know someone right now who's criticizing my purchase. I'm looking at around $700/month including electricity when all is said and done. The person in question is paying MORE if they factor in their gas costs, but they don't consider that.
Completly agree.
I attempted to answer the questions from this thread in my ICE vs EV comparison spreadsheet that I attached to a thread a while back:
http://www.teslamotorsclub.com/showthread.php/5196-Cost-Comparison?p=60886
There is no simple equations that can be applied to get "payback" numbers.
AustinPowers
Total Smeghead
Probably, but a Volt/Ampera is a car that is comparable to a Jetta / Focus etc. in every category except for it's EV tech and hence price.
I don't know anybody who says "Hey, I've got 40K Euro to spend, let's see what car fits that prize." As far as I know people first think about what car they want to get (compact, sedan, suv, ev), then they choose their preferrred manufacturer and then they configure their vehicle of choice until it meets the price vs. feature equation.
Of course, some simple choices are made on the outset, like should it be a Micra or a Phantom :wink:
JRP3
Hyperactive Member
Maybe not consciously but I'm pretty sure when anyone looks to purchase anything they have to be able to afford it, and have an idea of how much they want to spend, and shop within those parameters. I don't know anybody who is shopping for a $20K vehicle and then decides to buy a $40K vehicle.
JRP3
Hyperactive Member
I've seen Volt reviews that compare it in fit, finish, and ride quality to much higher end cars than the Jetta and Focus.
Uh, that's how pretty much everyone I know gets their car (I guess we know different classes of people). They have a budget then go find the cars in that budget (though yes, they typically have a type of car in mind: sedan, SUV, etc). Hell, that's a pretty typical way car dealers sell to you, they find your monthly budget and then make sure you spend it all.
Maybe if someone has money laying around in bundles in their house, they can just buy whatever without thinking of budget, but most folks have a pretty well defined range of purchasing power.
You just describe two very different ways of thinking, though, and the difference is important:
- "The sticker price on my car can't be more than $XX,000."
- "My monthly budget for my car is $YYY."
#1 is bad for EVs, which have a high(er) capital cost but low(er) operating cost.
#2 is the logical way for people to select a car, but requires that they add together their monthly lease/financing cost with their expected fuel bill. People hate doing math and tend not to believe the results. This is a key communication point that Tesla and other EVs need to work on communicating at every step.
Oh, I'm very aware of that. The dealer trick is to get you thinking about monthly max as a way to get you to blow over your sticker max.
That's all a tangent though. The original point is that I disagree with AustinPower's statement that most people don't have a budget in mind for a car. Perhaps such behavior depends heavily on price range.
Last edited:
As an engineer I 100% agree with your #1 and #2 comments. Even after all my schooling I was amazed that my pipe loss and pump calculations were DEAD ON when I first started doing my work. After a few dozen of those (big project I did all the hydraulic calculations months ahead of install) and all but one of them were within 2% of actual. The one that was outside we had incorrect information given to us by the client (dynamic and static viscosity are very different things). So I believe my math results in so much that if they are wrong I go check to see if the system I modeled is working/installed properly first.
Even with years of training and it takes some actual proof for people to believe their numbers. Granted doing simple purchase price and monthly cost calculations should be simple enough to believe without proving it to yourself.
But you need to be able to relate $XX,000 to $YYY per month before you go in there. Otherwise you get what a Subaru dealer tried to do to me. And try to sell me on a 48 month lease where the monthly payments were higher than a 5 year purchase, but still was in my stated $YYY dollar range. I wasn't going to buy a car, but he was adamant on showing me the STI would fit my stated budget.
@ckessel: Interesting POV. I usually think of a car as providing a stream of services, and so think about the value of that stream, rather than thinking of the car as having "a particular value at purchase." The best way, IMO, is to think about the discounted total lifetime cost of ownership, and comparing that to the discounted value of the stream of utility/services it provides. That's how I value power plants, but it's really hard to apply to cars, given the many intangible values that one gets from a good automobile.
A car is just a one-time purchase however it's actually financed (that's true even of leases, it's just a purchase with various conditions). Like most any purchase, it provides a stream of value over a longer period.
It's not really comparable to purchasing a stream of value like an actual service though: such as home electricity, cable TV, your World of Warcraft account, etc. Auto manufacturers would love if everyone did think of it as a service. They're incredibly keen on people thinking that way since that shifts from "buying" a car to basically renting a "service" where the monthly payments never end, but with the consumer still taking all the risks of the buying (car dies/stolen/sucks/whatever).
Even if you're someone that trades cars enough to always have a monthly payment, it's still in your interested to think of paying the lowest sticker price possible since that gives you the lowest monthly cost possible. Again, since it's not really a service there is no set monthly cost like a normal service (the WoW account example), the monthly cost is derived from the sticker price.
Edit: In rereading that, it sounds like I'm arguing with Robert. Sorry, that wasn't my goal, I totally understand and agree with what he was saying. I was just trying to outline my view of the difference between paying for a service versus buying a good even if you use that good in a "service" sort of way.
Last edited:
I like Chad's idea of doing the monthly payment + fuel cost calculation and all the other commenters who have said that the only consideration most people make is what is their total monthly payment.
So as a first stab I made this chart - which shows which electric car is the same or lower cost ( monthly payment + fuel ) than the gas car you are considering.
On the left is the price you would pay for ( finance ) the gas car. Across the top is how many miles per year you drive.
The car is assumed to be financed for 6 years at 3%.
I had to simplify and make all the gas cars the same: 20mpg burning premium at $4.75 a gallon. ( Seattle area prices are actually pretty close to that )
The comparison is for the very first month of financing, so the fact that you would save a lot of money in the future as gas prices increase ( and after you have paid off the loan ) is totally ignored.
For those with access to cheaper gasoline, here is the same chart with gas at $4 a gallon.
So as a first stab I made this chart - which shows which electric car is the same or lower cost ( monthly payment + fuel ) than the gas car you are considering.
On the left is the price you would pay for ( finance ) the gas car. Across the top is how many miles per year you drive.
The car is assumed to be financed for 6 years at 3%.
I had to simplify and make all the gas cars the same: 20mpg burning premium at $4.75 a gallon. ( Seattle area prices are actually pretty close to that )
The comparison is for the very first month of financing, so the fact that you would save a lot of money in the future as gas prices increase ( and after you have paid off the loan ) is totally ignored.
For those with access to cheaper gasoline, here is the same chart with gas at $4 a gallon.
Last edited:
This is very similar to something I built. I just made mine around $35k purchase price and for 18,500 miles/year (because that is what I have driven over the past 5.5 years). But this is the sort of simple breakdown that everyone can use. I used $4.10 a gallon as that is what I last filled up at, and used 23mpg because I really get slightly worse. I just barely lost without financial incentives for the Tesla, but after $7,500 federal and $5,000 state. And the fact that I am considering my reservation payment a 'sunk cost' I come out well ahead.
Now I need to convince myself (and my bank) that Photo-voltaic cells, ground source heat pump, and maybe a battery grid storage unit (to pay off peak rates in summer) have a payback period similar to a loan term. If I can get that I would be so happy.
spatterso911
P100DL - Raven
Interesting way to put it. A simpler way is to consider equity. Services never provide true equity, as you will always have to pay for the privilege of "ownership" else the service is terminated. In addition, with a service, the quality of your service is at the mercy of the service providers whims and desires. They can change terms at will.
AustinPowers
Total Smeghead
I didn't mean to say that most people don't have a budget in mind for a car. Of course they do.
Perhaps I couldn't make myself clear enough, not being a native speaker of English after all.
What I meant was that people here (i.e. "average" German car buyers) obviously tend to think and act differently than US buyers.
By the way, hardly anyone is willing to pay a "sticker" price anyway. Most cars are configured to order, not purchased on the spot. And even if they were, (almost) no one would accept the price that the sticker (or the dealer's computer after configuration of all the options and extras) shows. It's actually become quite a sport to haggle and achieve the lowest possible price (or highest rebate if you will).
