Tuesday, December 13, 2011

What Are Your Real Fuel Costs?

I recently wrote and made a Rotary Club presentation about using compressed natural gas (CNG) in vehicles. I drove one of our freshly converted CNG powered Ford Escapes with me to demonstrate. Part of the process was to calculate fuel amounts and costs and to compare those costs with the cost of conversion to CNG. I’ve done exercises like this before but for some reason I seem to forget a startling fact: if you keep a vehicle until it is dead or mostly dead, to about 200,000 miles, you spend quite a bit more on fuel than you do on the purchase price. Imagine how it would influence car-buying decisions if that number was first and foremost on the minds of consumers; perhaps even posted along side the vehicles MPG information?

Our 4-cylinder Escapes average a respectable (but not great) 25 miles per gallon. At $3.90 per gallon (probably a low average for the next few years), we could spend $31,200 each in fuel alone on these vehicles. Our large service vans or our dump truck get about 16 MPG. We could spend $48,750 each in fuel over the lifetime of these vehicles. Because we will convert them to CNG, our actual costs will be less than half of that. The switch I made from a 19 MPG Dodge diesel pickup as my personal vehicle to a 40 MPG VW Jetta Sportwagon diesel is saving over $20,000. That is practically the cost of the car.

The initial cost of the Hybrids and plug in electric vehicles seem high. If you are in it for the long haul, though, they are a good deal
. The difference in fuel costs between the 28 MPG standard Toyota Camry and the 41 MPG Hybrid Camry is $8,832, considerably more than the difference in the purchase price. Still, the benefit drops the higher the MPG of the comparison vehicles. The difference in overall fuel cost between a 49 and 50 MPG vehicle is just $318 where the difference between 15 and 16 MPG vehicles is a whopping $3,250. This is why it is not difficult to understand the number of diesel Sprinter service vans in use by businesses (we have two). If you can average 21 MPG instead of 14 MPG for a comparable van, you’ll save $18,571.

So, the next time you look at buying a car or truck, think about the total cost of the vehicle, not just the purchase price. And please ask your favorite local elected officials to think about this as well. I’d like our taxpayer money to be spent effectively.


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