Post by
RicerX »
https://forums.nicoclub.com/ricerx-u125542.html
Fri Feb 22, 2013 10:02 am
Here's the problem with this entire thing - the ideal thing is to double your fuel economy. How many people will really do that?
Realistically, for people to achieve this, they need to start trading their Dodge Ram for a Toyota Prius. NO ONE is doing that. People that need a full size truck for their daily driver MIGHT move from 14 MPG city to 16 or 18 MPG city.
Back to the argument - is the extra $2,600 worth it? Let's break down the realistic scenario - average Joe upgrades his old Dodge Ram for a new Dodge Ram.
Let's say the average ownership duration is 5 years, and the average joe drives 15,000 miles a year in his Dodge Ram.
Let's say Joe has an older Ram, making roughly 14 MPG city. The new one makes say 18 MPG city. (this obviously isn't exact but it gives us an idea). The same truck for the same truck basically, but the new one is the extra $2,600.
Let's use $5 a gallon for simple math. All things equal - at 14MPG and $5/gallon, driving 15k miles a year means you require roughly 1071.5 gallons of fuel per year, costing ~$5356 annually. Over 5 years, you spend ~$26,785 on fuel.
Substitute for 18MPG - 833.33 gallons of fuel per year, $4166.66 annually. Over 5 years - $20,833.33.
Basically, to recoup the cost and start seeing savings, you need to keep the vehicle for at least 2.5 years. Average Joe will probably keep it 5 years, but the illusion of the cost savings with the MPG sticker doesn't really take into account the fact that several other things will impede that savings for longer than 2.5 years, such as potentially higher insurance rates for a newer car as well as higher registration fees due to overall higher vehicle value.
That's given averages for everything. I would assume there are extreme cases where Joe needs to keep his vehicle for 5 years. Given the obvious increase in car payment and all these other things, trading up for a couple more miles per gallon is obviously not worth the expense.
Joe decides to give up his construction business and grab a Prius, then that extra $2,600 won't even matter in a year.