Guzzler Quandary: Sell Low to Buy High?

[1sttruck]

See more people finally talking about 'gas swilling minivans', but still not much talk about sporty cars that get similar mileage.


http://www.nytimes.com/2008/08/31/automobiles/31GUZZLE.html?_r=1&ref=automobiles&oref=slogin

Guzzler Quandary: Sell Low to Buy High?

SQUEEZED by frequent fillups that approach or even exceed $100, many owners of gas-swilling S.U.V.’s, trucks and minivans are considering whether to sell their guzzlers — which may be worth much less than they thought — and buy a smaller car, or hold on and hope that resale values will inch back up.

To determine which option makes the most financial sense, experts say owners should weigh how many miles they drive, how they use their vehicles and how long they expect to keep them. If they are leasing, they need to consider the cost of breaking their contracts.

Consumers who buy a Prius instead of a 4-cylinder Toyota Camry need to own it 5.5 years to earn back the higher price, according to Edmunds.com, the automotive information Web site, which assumed annual use of 15,000 miles, a price disparity of about $5,500 and fuel at $3.69 a gallon.

It will take nearly 19 years for the owner of a Lexus GS 450h, a larger hybrid car, to recoup the premium over the purchase price of a gasoline-only Lexus GS 460, the study showed.

 

[Gary Allan]

That's why $7/gallon is the target for getting rid of the jeeps. There's no way that I can figure to "buy new" or even used and have it make sense. Even intermediate marginal used purchases are prohibitive since the cost neutralizes any fuel savings.

Finding something with 30+ mph is a multi year pay back with only $3500 as a price tag. Below that, you're into availability issues or salvage/distressed cars.

 

[Cutehumor]

at $7/gallon, it's horse and buggy time. I guess I need to buy a horse quick , they are going up in value too!!

 

[rationull]

Originally Posted By: Cutehumor
at $7/gallon, it's horse and buggy time. I guess I need to buy a horse quick , they are going up in value too!!


I'd give you my girlfriend's, but she'd probably get mad.

 

[sciphi]

I'll keep trucking in my not-quite-gashog Buick. Low-mileage used car and not a reason to get rid of it. It's a decent car for where I am at this point in my life.

Besides there are ways to squeeze a few more MPG out of these existing cars, especially the SUV's. All that mass is hard work getting up the hill, and a paid-for ride down the other side!

 

[ekpolk]

Originally Posted By: 1sttruck
...
It will take nearly 19 years for the owner of a Lexus GS 450h, a larger hybrid car, to recoup the premium over the purchase price of a gasoline-only Lexus GS 460, the study showed.


This statement reflects the commonly made, yet totally mistaken assumption that one buys a Lexus GS 450h hybrid for gas savings. The other mistaken assumption implied here is that hybrids are ONLY for fuel economy. While the hybrid GS does offer a modest comparative fuel savings at its performance level, it is designed purely as a performance hybrid. One can certainly debate whether the characteristics of a performance hybrid are for them (not many bought the argument in Accord form, as that car flopped badly). The system in the GS offers a monstrous torque boost, as well as some added horsepower. In this setting, the hybrid system is in some ways similar to a turbo, in that it boosts the performance of the gas engine to which it's grafted.

First off, you don't buy a GS for "economy" at all. Second, if you got this car's present hybrid system for economy, you'd be a fool. But then again, that's not why they're offering it...

 

[ekpolk]

And let's take it a step further and ask about the flagship Lexus hybrid, the LS-600. That car costs a whopping $40k more than the "normal" LS's base sticker of $60k. Yep, you pay a $40k premium to get the hybrid version, and pay six-figures about the car.

On the other hand, Lexus is quite open about this car's mission. It's not for mileage (it does slightly worse than the normal car), it's to simulate a V-12 car, but with only eight cylinders.

I wonder how many LS-600h owners carefully track their mpgs?

 

[ekpolk]

Originally Posted By: 1sttruck
...
Consumers who buy a Prius instead of a 4-cylinder Toyota Camry need to own it 5.5 years to earn back the higher price, according to Edmunds.com, the automotive information Web site, which assumed annual use of 15,000 miles, a price disparity of about $5,500 and fuel at $3.69 a gallon.
...


Not if you do it the way I do and get them used...

 

[1sttruck]

"First off, you don't buy a GS for "economy" at all. Second, if you got this car's present hybrid system for economy, you'd be a fool...."

Which is the point of the article.

 

[rpn453]

Originally Posted By: ekpolk
This statement reflects the commonly made, yet totally mistaken assumption that one buys a Lexus GS 450h hybrid for gas savings. The other mistaken assumption implied here is that hybrids are ONLY for fuel economy. While the hybrid GS does offer a modest comparative fuel savings at its performance level, it is designed purely as a performance hybrid. One can certainly debate whether the characteristics of a performance hybrid are for them (not many bought the argument in Accord form, as that car flopped badly). The system in the GS offers a monstrous torque boost, as well as some added horsepower. In this setting, the hybrid system is in some ways similar to a turbo, in that it boosts the performance of the gas engine to which it's grafted.


I don't think too many Lexus owners are going to notice a 0.2 second difference in 0-60!

http://www.cars.com/go/crp/research.jsp?...e=&aff=national

 

[ekpolk]

Originally Posted By: 1sttruck
"First off, you don't buy a GS for "economy" at all. Second, if you got this car's present hybrid system for economy, you'd be a fool...."

Which is the point of the article.


Then why, in your initial post, did you quote the 19 year figure for how long it would take to recover the investment? Again, no one buys these cars for their better mpgs. They get them for the performance, and probably some because of the techno-cool aspect. Another telling fact is that Lexus does not use Atkinson cycle versions of the engines in the hybird GS and LS. These hybrids get the full output, full fuel burn versions of their engines. No one, I mean absolutely no one is going to buy a Lexus GS or LS to save gas. They do go faster than their conventional counterparts.

 

[1sttruck]

"Then why, in your initial post, did you quote the 19 year figure for how long it would take to recover the investment? Again, no one buys these cars for their better mpgs. "

People do buy them for better mileage, if it's fashionable to do so.

Why did people flock to minivans like lemmings, and then a lot of people dump them and snap up SUVs ? Especially some of the high end Japanese SUVs with all of the doo dads and the extra weight and the extra height and pretty bad mileage, all with less ground clearance than common sedans ? It's merely automtive fashion, ands even if the SUV is basically non-functional it's still a status symbol so no one suggesst that it's like putting lipstick on a pig.

Now it's fashionable to have a hybrid, to be 'green' even if it's non-functional. Just a different shade of lipstick.

 

[sciphi]

Faster, faster!! They'd also benefit resale-wise from the perception that hybrids are more fuel-efficient.

 

[ekpolk]

Originally Posted By: 1sttruck
"First off, you don't buy a GS for "economy" at all. Second, if you got this car's present hybrid system for economy, you'd be a fool...."

Which is the point of the article.


Then why, in your initial post, did you quote the 19 year figure for how long it would take to recover the investment? Again, no one buys these cars for their better mpgs. They get them for the performance, and probably some because of the techno-cool aspect. Another telling fact is that Lexus does not use Atkinson cycle versions of the engines in the hybird GS and LS. These hybrids get the full output, full fuel burn versions of their engines. No one, I mean absolutely no one is going to buy a Lexus GS or LS to save gas. They do go faster than their conventional counterparts.

 

[1sttruck]

Lexus hybrid philosophy and the links to articles on their web site indicate that they are painting themselves green in part by addressing global warming issues.

http://www.lexus.com/hybriddrive/hybrid_philosophy.html

While the automotive industry is beginning to embrace hybrid technology, for Lexus this is much more than the latest trend. It's part of our philosophy. As a corporation, we've been developing and consistently improving our hybrid technology for years, allowing us to leverage our fifth generation of hybrid vehicles. With each improvement, Lexus Hybrids take even less from the world, while giving more to the driver. Our luxury hybrids are all certified as Super Ultra-Low Emission Vehicles (SULEV) and feature the luxurious amenities, attention to detail and superior craftsmanship you expect from a Lexus.

From the moment a Lexus Hybrid begins production, great care is taken at each step to try to minimize the impact on the environment. That's why Lexus Hybrids have a lightweight body design and are exceptionally lean in their use of raw materials. Sophisticated computer modeling helps to ensure that our environmentally sensitive innovations won't compromise the quality of the vehicle. This not only enables a Lexus Hybrid to run cleaner and conserve natural resources, but leaves less scrap metal at the eventual end of its life. Lexus even recovers all hybrid batteries so that they can be properly handled.

 

[ekpolk]

Truck:

Remember, "green" doesn't equate with fuel economy. As I see it, fuel economy is just one small part of "green". The key clue with respect to the Lexus hybrids (the GS and LS anyway*) is, as I noted above, that they passed on using Atkinson cycle versions of their respective gas engines. In the Prius and Camry, the engines use their VVT features to achieve Atkinson cycled operation, by imposing a long delay in the closing of the intake valve. This actually causes the engine to expel a portion of the drawn-in air back into the intake runner. The net effect is that the power stroke is substantially longer than the intake. This can result in, per the literature, up to a 15% increase in efficiency over a comparable non-Atkinson engine. The downside is a substantial loss in power (note the hybrid Camry's ICE is rated at only 147 hp, compared to 166 in the normal version). In hybrid cars, of course, the design uses electric boost to "make up" for the lost horses.

That Lexus chose NOT to apply this technology, but instead applied electric boost to gas engines that are NOT giving up any ponies can mean only one thing -- in these designs, they're deliberately elevating performance above max mileage. And customers are buying them for exactly that effect. Sure, they're building them "cleanly," but still, with a different emphasis than they're placing on the Prius.

* IIRC, the RX hybrid (twin of the Highlander) does get an Atkinson engine.

 

[PF52]

Originally Posted By: 1sttruck

Why did people flock to minivans like lemmings, and then a lot of people dump them and snap up SUVs ? Especially some of the high end Japanese SUVs with all of the doo dads and the extra weight and the extra height and pretty bad mileage, all with less ground clearance than common sedans ? It's merely automtive fashion, ands even if the SUV is basically non-functional it's still a status symbol so no one suggesst that it's like putting lipstick on a pig.

Now it's fashionable to have a hybrid, to be 'green' even if it's non-functional. Just a different shade of lipstick.


Bingo! You've hit the nail right on the head. Only in America does "image" and "status" dictate automotive purchases as much as it does. Yesterday's automotive "must-have" (the SUV) has been replaced by today's must-have (the hybrid, particularly the Prius). But why did the SUV become a must-have in the first place? No one wanted to be seen in the previous must-have, the minivan; after all, only soccer moms drove those!

 

[1sttruck]

Interesting perepsctives on Lexus in Europe....

http://www.lexusofportland.com/NewModelsPageDetails?model=GSHybrid

Lexus has announced that they sold 16,800 vehicles with Lexus Hybrid Drive (aka Hybrid Synergy Drive) in Europe in 2007, their best performance yet. Toyota's premium brand is dominating the premium hybrid segment in Europe. Not hard to do considering they are the only manufacturer offering premium hybrids. Thirty-eight percent of all the Lexus models sold in Western Europe last year were hybrids, up from twenty-six percent in 2006. Interestingly the LS600h has accounted for fifty-six percent of LS sales since its launch in July. Here in the U.S., the LS600h accounts for well under ten percent of sales. Similarly, the RX400h accounts for eighty-six percent of RX sales in Europe while, here they were only about seventeen percent last year. Given the relative disinterest in hybrids in Europe, these numbers seem unusual.

Well, I'm not, considering Lexus only has one Diesel, in the LS. All other cars have gas guzzlers, which are not competitive here in Europe. So, people who want a Lexus, go for the hybrid! Simple, it's a fuel consumption thing, not environmental concern.

As for the fact that there are a lot of smarter diesels in the competitios, that's true. That's why the competition sells a lot more cars than Lexus! It's a niche brand in the premium segment, the article doesn't mention Lexus' market share in those segments.



http://www.businessweek.com/globalbiz/content/apr2008/gb2008049_273686.htm

Hybrids Drive European Growth for Lexus

Karl Schlicht's job is a bit like being a salesman for Japanese beer in Bavaria. Schlicht is the Toyota (TM) vice-president in charge of the company's Lexus brand in Europe, a region that adores its locally made luxury sedans. Drive down any French or German highway and you'll see many more Mercedeses, BMWs, and Audis (VOWG.DE) than Lexuses. For that matter, you'll also likely see more Alfa Romeos (FIA.MI), Citroëns (PEUP.PA), Volvos (F), and Saabs (GM). Lexus sold only about 39,000 cars in Western and Eastern Europe in 2007, compared to 730,000 for the Mercedes (DAI) brand and 700,000 for BMW (BMWG.DE).

Lexus' performance in Europe stands in stark contrast to the U.S., where the brand is No. 1 in the premium segment. Yet Schlicht, a Canadian of German extraction, is surprisingly optimistic. Sales have improved dramatically from a few years ago. In 2006 Lexus' European orders soared 76% as Toyota relaunched the marque with a network of dedicated dealers and improved service. Results were flat in 2007, which Toyota attributes to problems in delivering some Lexus models. But according to Schlicht the Russian market—which is part of his territory—helped compensate: Wealthy Russians bought 13,000 Lexuses last year, a 30% jump from 2006, bringing the brand within striking distance of the Germans in that booming market.

Still, Lexus sells almost as many cars in the U.S. in a month as it does in Europe in a year. (Ironically, the brand also is weak in Japan, where sales are comparable to Europe's (BusinessWeek.com, 3/20/08).) In Germany, the Mercedes-BMW-Audi heartland, Lexus sold a mere 4,500 vehicles in 2007. How will Toyota meet its goal of selling 65,000 Lexuses a year in Europe by 2010? The strategy can be summed up in one word: hybrids. European carmakers have been slow to offer hybrid vehicles, focusing instead on diesel motors as a way to reduce fuel consumption and emissions. In Europe diesel is cheaper than gasoline and available at every filling station, making it a more appealing technology than it is in the U.S.

 

[Junior]

So does anyone give a thought to the huge hole in the ground one needs to dig to produce these hybrid vehicles or all the precious metals used to make them?

This is the side you never hear about.

 

[ekpolk]

Originally Posted By: Junior
So does anyone give a thought to the huge hole in the ground one needs to dig to produce these hybrid vehicles or all the precious metals used to make them?

This is the side you never hear about.



That's because it's been totally debunked as another invalid attack by the hybrid haters. Nickel was the main "offender" in this line of attack, and the traction battery does contain nickel. What Art Spinella and company, and the other hybrid haters forget to tell you is that the amounts of nickel used in the traction batteries absolutely pales to nothing compared to the amounts of nickel already used, and constantly used in the production of steel from iron. As any metalurgist will tell you, there are an almost countless number of various different types of steel, some very common, some very special and rare, but a vast majority of them contain substantial amounts of nickel. Hybrid NiMH batteries are a miniscule fraction of the nickel already used by heavy industry around the world.

Another myth.

So, to turn this around, how do you justify the MUCH BIGGER hole in the ground that has to be dug to mine the ore to make one 6000# Suburban compared to the hole required to make a 2900# Prius. You forgot about the iron ore to make the body steel, didn't you...