Saturday, August 09, 2008

Gas-guzzlers - Edmunds.com attempting to re-write reality? 

Oil companies and Detroit would love Americans to continue to hang on to their gas guzzlers for as long as possible.

Enter Edmunds.com, obviously a stalwart of the car industry, to persuade everyone that switching out that gas-guzzler could be a bad move financially.

Here's the example they cite:

"A common example demonstrates the potential pitfalls of ditching that SUV: A consumer trades in a four-year old GMC Yukon, worth $13,483, for a new $21,647 Toyota Prius. The difference is $8,164. If the consumer drives 1,200 miles per month and gas costs $4.07 per gallon (national average), the monthly fuel savings will be $201.34. While this may seem attractive, it will take 41 months to pay back the additional cost of the Prius over the trade-in value of the Yukon".

Notice it is a little difficult to unravel what is going on here. When you check their online web tool it reveals that they rate the Yukon at 17 mpg and the Prius at 47 mpg. So the Yukon needs 1200 / 17 = 70.6 gallons to travel 1200 miles, while the Prius needs 25.5 gallons.

There are two things that Edmunds.com is not telling you. First in terms of global warming - the Prius is an AT-PZEV compliant vehicle. This means that the Yukon will emit from 5 to 10 times the amount of CO2 and NO2 polution.

Enter the battle of the calculators. The Green Hybrid site has one and when I put the Yukon numbers in that it reports that the Prius saves you $2,188 a year which is in line with Edmunds calculation of $2,400 a year. But what is the impact of the Prius being AT-PZEV rated? You can see that impact of the carbon emissions using this calculator. Using the simple method of gallons burned then the Yukon emits 7.44 metric tons of CO2 travelling 14,400 miles annually while the Prius emits 2.69 metric tons of CO2. Of course the AT-PZEV emissions control also impacts this dramatically downward too.

Now both calculators are ignoring the TRUE COST of gasoline and oil. Way back in 1988 people realized that the US government is providing all kinds of hidden subsidies to the industry. The experts at the ICTA estimate the result is that gasoline is really costing Americans closer to $12 per gallon more than the pump price, which they are paying through their regular taxes each year.

Using a cost of $16 per gallon - then the Prius purchase pay-off period drops to just 11 months.

Sobering thoughts and a reality that obviously the oil companies and Detroit definately do not want you to know.

This page is powered by Blogger. Isn't yours?