On July 27, 2009, we bought a 2010 Toyota Prius III. The $28,670 gross price (with sales tax) was offset by: (1) a $4,500 payment from the federal “Cash for Clunkers” program; (2) a $2,880 Colorado tax credit for buying a hybrid vehicle; and (3) a $161.60 sales tax deduction on our Form 1040 Schedule A. With these offsets, our final net purchase price was a reasonable $21,128.40. Amount saved: $7,541.60.
We bought the Prius hoping that it would last at least ten years (as long as we avoided a major accident). Five years later, I posted this article about our cheap ownership costs—Halftime Report: Our 2010 Toyota Prius and the Benefits of Long Range Planning.
More than 2½ years have passed since I last reported on the Prius, so as our third quarter of ownership ends, it’s time to provide an update. Is our Prius still a big money-saver? Should you consider owning one yourself?
7½ Years of Prius Ownership Costs
Everything our household spends on vehicles is through credit cards, so it’s easy to track costs. This chart covers July 27, 2009 – January 27, 2017:
|Year||Depreciation||Gas||Insurance||Reg & Tax||Body Work||Tires||Repairs||Oil|
The bottom line: our operating costs during 7½ years of ownership have totaled $30,891.55, for an average of $343.24 per month. Here are the details.
Depreciation is what a vehicle loses in market value over time. To figure actual depreciation, I visited KBB.com in late January and entered the relevant data about our Prius including its mileage (112,837) and overall condition (very good, but not excellent). I then subtracted the car’s estimated market value ($7,501) from its original net purchase price ($21,128.40) to arrive at a figure for accumulated depreciation. I spread that amount evenly over 7½ years of ownership.
Mrs. Moose retired in August, 2012. This eliminated 16,000 commuting miles per year, but was partially offset by a welcome increase in vacationing miles. In late 2014, we moved from the mountains into town, which further reduced our annual mileage.
Registration and Tax
Newer vehicles trigger higher taxes, so during the first five years the Prius cost a bundle. But now the car is older. Starting in 2018, this line item will drop to $74 per year.
In 2013, we suffered from my clumsiness. I had a small accident that cracked the front bumper cover, which is made of plastic. Why were the repairs so expensive? Answer: the new bumper cover had to be painted to match the rest of the car—and that involved big labor costs.
In 2015, the front passenger wheel well cover (also plastic) came loose at 70 MPH. It was promptly shredded by the fast-spinning tire. To avoid another body shop bill, I watched a YouTube video and did the work myself. Total cost: $40.63 for a replacement part from RockAuto.com.
In 2015, we replaced the 12-volt accessory battery, transmission fluid, and air filter. Cost: $458.97. In 2016, we had a mechanic give the car a once-over before leaving for a 2,500 mile road trip. Cost: $75. Though 7½ years, this car has been a miracle of maintenance-free motoring. We’ve never even replaced the brake pads!
All oil changes have occurred as scheduled. The reported expenses may include occasional tire rotations and air filters.
Prius Costs vs. Average Sedan Costs
Since 1950, the American Automobile Association (AAA) has published the annual ownership costs for the average sedan. Using these reports, I’ve charted what the AAA’s typical sedan would have cost over the last 7½ years as compared to our actual expenses:
|Year||AAA Sedan||Our Prius||$ Saved|
|Cost Per Year:||$7,143.33||$4,118.87||$3,024.46|
|Cost Per Month:||$595.28||$343.24||$252.04|
|Cost Per Day:||$19.57||$11.28||$8.28|
|Cost Per Mile:||$0.48||$0.27||$0.20|
According to the chart, we’ve spent 42.34 percent less than the AAA projections for savings of $22,683. But this overstates the benefits of owning a Prius because of two huge factors that had nothing to do with our particular car model: (1) we benefited from a scheme of governmental incentives; and (2) we paid cash and thereby avoided interest costs.
When I adjust for the incentives and avoided interest, is the Prius still a good value? The answer remains a resounding YES because we still save an impressive 25.53 percent versus the AAA’s average sedan:
|Year||AAA Sedan||Our Prius||$ Saved|
|Cost Per Year:||$7,143.33||$5,319.69||$1,823.65|
|Cost Per Month:||$595.28||$443.31||$151.97|
|Cost Per Day:||$19.57||$14.57||$5.00|
|Cost Per Mile:||$0.48||$0.35||$0.12|
More Incentives to Keep Driving this Great Car
Apart from low operating costs, we have plenty of other reasons to hold on to our Prius:
1. Our New Big-City Sales Tax. When we bought the Prius in 2009 we lived in a county where the sales tax was 2.9 percent. Once we moved to town, the sales tax skyrocketed to 8.845 percent. On a $20,000 car purchase, this would mean paying $1,189 more in tax. The longer we delay this painful event, the better we’ll feel.
2. Ownership Taxes. Colorado charges lower ownership taxes for older vehicles. For 2017, the tax for our Prius is $103. In 2018, it will drop to $3 per year and remain at that low level forever. If we replaced our used Prius with a newer model, say one from 2015, our taxes would jump by about $750 over the next 2½ years.
3. Collision and Comprehensive Insurance. Now that the Prius is older—and worth a mere $7,500—we worry less about insuring it. We recently raised the deductibles for collision and comprehensive coverage from $1,000 to $2,500. If we upgraded to a newer model, we would return the deductibles to $1,000. This would cost an extra $1,200 in premiums over the next 2½ years.
4. If it Ain’t Broke, Don’t Replace It. We’ve had good luck with this car. If we updated to a used 2015 Prius, it would cost about $9,175 net after selling our current model in a private party transaction ($16,676 – $7,501 = $9,175). There’s no reason to pay $9,000+ for the dubious privilege of prematurely replacing the best car we’ve ever owned.
* * *
If our 7½ years worth of data doesn’t convince you, read these other sources that also endorse the Prius.
Bankrate.com has declared that the Prius is the cheapest car to own and operate. YourMechanic.com has concluded that the Prius is the cheapest model to maintain over ten years (at a mere cost of $4,300). The Prius has appeared repeatedly on lists of vehicles most likely to last 200,000 miles or more. Consumer Reports has tested a 2002 Prius driven 206,000 miles. After noting the car’s strong performance in acceleration and fuel economy, the reviewers were “amazed how much the car drove like the new one we tested 10 years ago.”
The evidence is clear: the Prius delivers a tremendous value in transportation. If both the car and I are still around 2½ years from now, I’ll post another data-intensive update that reviews a full decade of ownership.
* This figure adds the AAA’s projected five year finance charges of $3,895. It also adds the governmental incentives we received ($7,541.60) minus an adjustment for the lower price we would have negotiated had those incentives not created such a huge demand for hybrids in the first place ($2,430.50).
Great Prius Pic Joi Ito!