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post #1 of 8 (permalink) Old 02-17-2006, 10:30 AM Thread Starter
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Talking OK Economic/Accounting Majors... Here's One For You

I’m giving myself a headache trying to figure this out!!!

Any economic/accounting majors/guru’s want to give it a try?

I need to do a cost/benefit analysis and determine how long it would take to recoup an initial expenditure.

Here’s the information:
Initial Expenditure: $6000

Current MPG: 32
New MPG: 60
Average monthly miles driven: 3000

Current Price of fuel per gallon: $2.25
Estimated (WAG ) price of fuel per gallon in 5 years (NOT adjusted for inflation): $2.75
Average Yearly inflation rate (CPI): 4%

I’ve been toying around with getting/building a hybrid to commute back and forth to work in. I can pick up a Honda Insight for about 10K, but I can build a pseudo hybrid for about $5000 - $6000 (and that will be a LOT more fun!!)

So if I spend $6000 this month and build/buy a hybrid, how long will it take for me to recoup the $6K investment? AND how many months of driving could I have done on that $6000?

Like I said, I’m giving myself a headache!!!

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post #2 of 8 (permalink) Old 02-17-2006, 10:42 AM
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5.1 yrs to re-coupe your investment... since inflation is adjusted for 5 yrs...no need to take it into account

32mpg /3000m = 93gallons per/mo x 2.25 = 210
60mpg/3000m = 50 gallons per/mo x 2.25 = 112

a savings of $98/mo

$98/12 = $1200 (roughly) $6,000/ $1200 savings = 5.1 years

Hope that helps...

NOTE: This is a rough estimate, since I am actually doing my Accounting homework now
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post #3 of 8 (permalink) Old 02-17-2006, 10:44 AM
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To get a worst case scenereo, just ignore the future gas price. The higher the gas price gets, the more you are saving by getting a hybrid.

Heres what you do:
-Devide the monthly mileage by how many miles per gallon you get on each car.
- This will give you how many gallons you use a month
-Multiply the Gallons per month of each car by the cost of gas to get your cost per month
- The Aspire would cost $210 a month to drive, while the hybrid would cost $112 a month to drive
- Now find the difference of these numbers to see how much you save a month (comes out to $98)
- All you have to do now, is devide the cost ($6000) by how much you save a month ($98). This comes out to 61 months, which is a little over 5 years.

On a side note, I HIGHLY suggest the Honda insight. They are very well built cars, and fun to drive aswell. They really aren't that slow, either. I've seen one beat a Cobalt, a Neon, and various bigger cars on the highway, due to aerodynamics. Get one of those and tint the windows, and get some sticky tires, and you have one well handeling car. In traffic, with a good driver, an insight can beat almost anything because of its suspension, and size.

I would like to hear your theory on building a Pseudo-hybrid though. Sounds interesting.
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post #4 of 8 (permalink) Old 02-17-2006, 11:13 AM
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Bah, you beat me to it... Lol
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post #5 of 8 (permalink) Old 02-17-2006, 12:01 PM Thread Starter
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Cool!! I never was any good at the "a train leaves a station at.... blah blah blah" type problems!!!

And at 5 years (which was what I was thinking) it would not be worth it. The batteries that are commercially availalble only have about 3 years of life in them (based on the miles and estimated charging cycles I would be seeing). So in three years I would have to be dropping $2500 - $3000 on batteries.

This also proves that just dropping $10K on a Insight isn't cost efficient either because there is no way I could get a payment and insurance for $98 per month.

Thanks again!!!

Now I can get back to my engineering of the EFI setup for the blown 472 in my truck... We won't mention fuel economy in regards to that...

97 Lincoln Mark VIII LSC (Chip'd, 3.73 T/L... so far... )
97 Ford Aspire (Slow, but getting 36 mpg (f'n Ethenol!! )
84 F250 Dually w/6.9L Diesel (7.3L IDI pending)
73 Mercury Cougar Convertible w/351C 4V (Partially Restored)
69 F100 LWB w/460 Engine
76 Glastron Carlson 23' Jet Boat w/460 CJ Engine
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post #6 of 8 (permalink) Old 02-17-2006, 12:15 PM
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also to keep in mind in your hybird pursuit, many hybrids have to run there gas motors when the a/c is on.

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post #7 of 8 (permalink) Old 02-17-2006, 12:19 PM
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what about a bio-diesel hybrid? now that would really get you some miles!
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post #8 of 8 (permalink) Old 02-17-2006, 12:24 PM Thread Starter
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Quote:
Originally Posted by nickmckinney
As much as I hate to work on them, its tough to beat a VW running bio-diesel if you drive mega miles and have good access to restaurant throwaway grease. My buddy is converting a VW diesel into a compressor/generator for his shop in the woods.
That "throwaway grease" is getting hard to find. MANY people are snagging it for the bio diesel. I was just having a discussion on that with a guy that owns some local restaurants. He said he gets a couple requests per week from different people!!

Probably about the only realistic thing I can do (excluding moving my arse closer to town) is to get a diesel of some kind in the next few years… once my Aspire dies... if it ever does! Prices on a used Beetle should be reasonable by then and I really like them.

97 Lincoln Mark VIII LSC (Chip'd, 3.73 T/L... so far... )
97 Ford Aspire (Slow, but getting 36 mpg (f'n Ethenol!! )
84 F250 Dually w/6.9L Diesel (7.3L IDI pending)
73 Mercury Cougar Convertible w/351C 4V (Partially Restored)
69 F100 LWB w/460 Engine
76 Glastron Carlson 23' Jet Boat w/460 CJ Engine
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