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Hybrid vs. Gas: Choosing the Best Option for Personal Transportation

Discover whether a hybrid or gasoline vehicle is more cost-effective for personal transportation over 5 years. Analyze the total cash flow and make an informed decision based on facts and figures. The study compares a 2005 Honda Civic Hybrid and a 2005 Honda Civic Sedan EX, considering various factors such as purchase price, fuel efficiency, and maintenance costs. Find out which option comes out as the better choice based on the calculations provided.

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Hybrid vs. Gas: Choosing the Best Option for Personal Transportation

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  1. Hybrid vs. GasWhich is the best option? Team 10 Daniel Cerna Juan Gaspar Duane San Juan Sadia Tarannum

  2. Assumptions • Analysis Period of 5 Years • 5 Year Loan at 6.50% APR • No Down Payment • Constant Maintenance Cost for 5 Years • 15,000 Miles Driven/Yr • Miles Driven are 50% City & 50% Highway • Standard Driving Conditions • Not Reselling Car After 5 Years

  3. Scenario • For personal transportation is it best to purchase a vehicle that runs on : • Hybrid – 2005 Honda Civic Hybrid • Gasoline – 2005 Honda Civic

  4. Honda Civic Sedan DX (Hybrid) • Purchase Price: $21,450 • Variable Speed Automatic • MPG (City): 48 • MPG (Highway): 47

  5. Honda Civic Sedan Ex • Purchase Price: $19,310 • 4 Speed Automatic • MPG (City): 31 • MPG (Highway): 38

  6. Annual Cash Flow Analysis Results • EUAC of Civic Hybrid = $7,901.80 • EUAC of Civic EX (Gas) = $7,737.29 • EUAC of Civic Hybrid is greater than EUAC of Civic EX (Gas) • Therefore, Choose Civic EX (Gas)

  7. Sensitivity: Avg. Cost of Fuel $3.98

  8. Sensitivity: Miles Driven/Yr 22,541 Miles

  9. Sensitivity: Civic Hybrid Maintenance Cost/Yr $365.11

  10. Sensitivity Results • Lowest EUAC – Honda Civic Ex • Hybrid fuel savings does not offset higher purchase price • Cases where Civic Hybrid costs less: • Avg. Cost of Fuel Over $3.98 • Miles Driven/Yr Over 22,541 Miles • Civic Hybrid Maintenance Cost/Yr Below $365.11

  11. Resources • Hybrid Vehicle Cost Calculator Tool: http://fcvt.nrel.gov/cleancities/hev/calculator/single.php • Calculates Present Value of Annuity with Interpretation: • Investopedia.com • Mortgage Payment Calculator: • Connel.net • Loan Payment Calculator: • Bankrate.com

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