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Are Hybrid Vehicles worth the extra cost?

Are Hybrid Vehicles worth the extra cost?. Ryan Pietropaolo NCSSM January 2012. Goal. Compare costs of Hybrids with non-hybrid vehicles. Compare environmental impacts i.e. oil use Cost of owning a vehicle. Brain-Storm Variables. i nitial cost m iles per gallon f inancing rates

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Are Hybrid Vehicles worth the extra cost?

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  1. Are Hybrid Vehicles worth the extra cost? Ryan Pietropaolo NCSSM January 2012

  2. Goal • Compare costs of Hybrids with non-hybrid vehicles. • Compare environmental impacts i.e. oil use • Cost of owning a vehicle.

  3. Brain-Storm Variables • initial cost • miles per gallon • financing rates • gas prices • tax rate • maintenance • repairs • average lifespan • insurance cost • depreciation value

  4. apples-to-apples comparison • 2012 Honda Civic Sedan • Hybrid vs. LX

  5. Basic Assumptions • Driving habits: 15,000 miles per year; 50/50 city/highway • Purchased in North Carolina (Durham County) • Inflation 3% per year • Insurance: same coverage, based on car value • Equal Maintenance costs

  6. Initial Costs and Financing • Hybrid: $24,050; LX: $18,655 • no money down • 48 month loan on initial cost only • 4% annual interest, compounded monthly

  7. Monthly Payment

  8. monthly payment cont.

  9. Repayment Cost • Annual Cost: Hybrid- $6516 LX- $5054

  10. Fuel Costs • Hybrid: 44 miles/gal (combined city/hwy) • LX: 33.5 miles/gal (combined city/hwy) • Current gas price: $3.35 (inc. 3%/year)

  11. Cumulative Fuel Cost

  12. Tax • New car tax rate – 7.3% (North Carolina) • Yearly Property Tax Rate- 1.2481% (Durham) • Depreciation Rate:

  13. Cumulative Tax Cost

  14. Yearly Maintenance Costs • 5-year estimates based on previous models • Increase 3% each year after year 5

  15. Yearly Repair Costs • 5-year estimates based on previous models • Increase 10% each year after year 5 • Repairs same for both models • Battery Packs generally last the life of the vehicle and reduce engine wear. (.2% F.R.)

  16. Yearly Insurance Costs • Liability insurance costs are equivalent for both vehicles. ($450 per year) • Non-liability costs are determined on the depreciated value of the car. (3% per year) • Owners only carry liability insurance after the ninth year.

  17. Oil Conversions • 42 gallons of oil per barrel • 45% of oil becomes usable gasoline • Super Tanker carries 2 million barrels of oil • 21,000 Honda Hybrids sold in United States last year

  18. Extensions • What current gas price would make it cost effective to buy a hybrid? • At what point should you sell your SUV and buy a hybrid? • Comparisons involving Electric and Diesel. • When is it cost-effective to build light-rail transit? • What is the impact of the CAFE standards on oil dependence?

  19. Questions / Comments Ryan Pietropaolo NCSSM pietropaolo@ncssm.edu

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