Do hybrids last as long as naturally aspirated engine and do they make sense?

[JimPghPA]

Hybrids are the best choice for a vehicle that's going to have a lot of miles put on it each year. And Toyotas E - CVT is bullet proof and one of the most reliable transmissions in production today.

I'm in the change all fluids often camp regardless of what dealers say, if you want long life out of any vehicle. And spend the extra for the vehicle manufacturers fluids if theres any doubt at all of aftermarket fluids being of less quality.

In general the break even miles for the extra cost of a hybrid is around 15,000 miles per year. If your driving more than that per year, you save by driving a hybrid. The break even miles point varies acording to vehicle size. Huge vehicles have significantly higher mile break even points.

The E - CVT alone is a great reason to get a new Toyota hybrid.

The only thing to consider is if your going to spend that many hours in a vehicle in future years, maybe you should also test drive equivalent size Lexus vehicles of their different trim levels.

 

[lovcom]

If the money is earning more than the interest would cost me, I'm taking the loan/interest. Capital One is paying me 3.5% and the loan costs me 1.9%. I generally like to hang on to my money for as long as possible.

Your logic is full of lots of holes ;-). The current market beats what CapitolOne is paying you, not to mention depreciation.

 

[rijndael]

Your logic is full of lots of holes ;-). The current market beats what CapitolOne is paying you, not to mention depreciation.

Probably so, but there's 0 risk of losses. I just put the money in a capital one and have automatic loan payments come from that account. There's no worry about selling off shares monthly, even when it might be down from some weird tarriff news. Super simple.

And, you can often negotiate a better sale price when you finance vs paying cash.

It will depreciate whether I have a loan or not.

 

[The Critic]

Toyota DOES have two distinct kinds of hybrids. The "hybrid max" drivetrains on their larger vehicles use 6-speed automatics, as best I can tell.

Tacoma iForce Max is 8-speed, Tundra iForce Max is 10-speed.
Hybrid Max in Grand Highlander and Crown are 6-speed.

 

[Arch Stanton]

I'm pretty sure Toyota also has a non eCVT CVT transmission in the non hybrid Corolla and smaller cars. It is different from Honda, Hyn/Kia etc. in that it actually has a "manual" first gear in it.

 

[SC Maintenance]

Probably so, but there's 0 risk of losses. I just put the money in a capital one and have automatic loan payments come from that account. There's no worry about selling off shares monthly, even when it might be down from some weird tarriff news. Super simple.

And, you can often negotiate a better sale price when you finance vs paying cash.

It will depreciate whether I have a loan or not.

There is absolutely no chance of loss from a US T-Bill. Its backed by the US government.

Capital one could technically go under. The US government technically cannot - they can literally print dollars. Now those dollars may not be worth anything, but you will get them.

 

[rijndael]

Capital one could technically go under. The US government technically cannot

It's FDIC insured ...

 

[CarlB]

Why does depreciation matter? It depreciates the same whether I have a loan or not.

For purchase, you give up the potential ROI, for loan you paying interest on that depreciating asset so the loss is slightly higher. In both scenarios you need to math in the depreciation of that asset to fully understand the amount lost. Another way to think about it, is if you hear someone talk about 0% APR on a new auto loan. That's not the case. If the car is depreciating 20% in the first year, then it's still (Potential earnings + Depreciation rate) as the interest.

So for fake numbers, let's assume I could make 8% in the market on avg and over the life of the vehicle I am seeing 8% depreciation per year on avg. Even at 0% APR That's a 16% rate for the purchase. The myth of 0%, since they can also bake in some of the costs to finance into the pricing.


The other issue is folks generally overspend when financing, since spreading the payments around obscures the amount lost. A $600 payment feels different than a $50k lump sum, plus many people would never consider spending so much out of their savings without being, "drunk on credit."

 

[rijndael]

I think I'd care more about depreciation if moved in and out of cars frequently. Before my recent purchase of a '24 I had an '07. I generally keep them until the end, but it's getting harder with parts availability.

 

[The Critic]

I think I'd care more about depreciation if moved in and out of cars frequently. Before my recent purchase of a '24 I had an '07. I generally keep them until the end, but it's getting harder with parts availability.

It always matters since your vehicle can get totaled from circumstances beyond your control.

 

[CarlB]

I think I'd care more about depreciation if moved in and out of cars frequently. Before my recent purchase of a '24 I had an '07. I generally keep them until the end, but it's getting harder with parts availability.

It's still necessary to have the complete picture of how much it is truly costing you. It isn't a 1.9% loan is my point.

 

[CarlB]

It always matters since your vehicle can get totaled from circumstances beyond your control.

Especially if still inside the loan and now you're upside down on it.

 

[JimPghPA]

For purchase, you give up the potential ROI, for loan you paying interest on that depreciating asset so the loss is slightly higher. In both scenarios you need to math in the depreciation of that asset to fully understand the amount lost. Another way to think about it, is if you hear someone talk about 0% APR on a new auto loan. That's not the case. If the car is depreciating 20% in the first year, then it's still (Potential earnings + Depreciation rate) as the interest.

So for fake numbers, let's assume I could make 8% in the market on avg and over the life of the vehicle I am seeing 8% depreciation per year on avg. Even at 0% APR That's a 16% rate for the purchase. The myth of 0%, since they can also bake in some of the costs to finance into the pricing.


The other issue is folks generally overspend when financing, since spreading the payments around obscures the amount lost. A $600 payment feels different than a $50k lump sum, plus many people would never consider spending so much out of their savings without being, "drunk on credit."

All true, but also, if the buyer has a job that has a salary that increases to keep up with inflation, then as the years progress, they are paying back less actual value per payment that is locked into today's dollar amounts. It may not apply to many, but when it does, it makes interest rated paid on a loan shrink as far as real cost.

Example, if we have a 12 % real inflation and the purchasers salary does keep up with real inflation, and the loan has a less than 12 % interest rate, then the future dollars the buyer is paying back are not as much real cost to the buyer.

 

[Rmay635703]

Old hybrids 1999/2000 are getting to the age you have to recap non-replaceable electronic components.

A new form of repair irritation

 

[CarlB]

All true, but also, if the buyer has a job that has a salary that increases to keep up with inflation, then as the years progress, they are paying back less actual value per payment that is locked into today's dollar amounts. It may not apply to many, but when it does, it makes interest rated paid on a loan shrink as far as real cost.

Example, if we have a 12 % real inflation and the purchasers salary does keep up with real inflation, and the loan has a less than 12 % interest rate, then the future dollars the buyer is paying back are not as much real cost to the buyer.

If using the example from above of 16% real rate of the loan, then you can factor that to 13% assuming 3% inflation.

 

[IndyIan]

I think the Plug-in Hybrids could be a bit tough on the gas engine. I've been behind a few plug in Prius at 55mph climbing a hill in the winter, when the engine starts up, and you can smell the fuel and maybe a bit of oil going through the dead cold cat?
I suspect the total engine running hours being lower overall may cancel out the few brutal cold starts?

 

[JimPghPA]

If using the example from above of 16% real rate of the loan, then you can factor that to 13% assuming 3% inflation.

Real inflation is a number often hidden.

 

[CarlB]

Real inflation is a number often hidden.

Yes, sub in any number you would like to use. Say 20% during the 2020 printing-fest.

 

[OVERKILL]

Our family puts on 200k+ miles on all our cars before we get rid of them. We all drive hybrids.

So "I've had" (2012, 2014, 2019, 2021) doesn't actually mean you then?

 

[OVERKILL]

Incomplete equation when the market is beating 3.5% (opportunity cost). Also need to factor in depreciation.

OK, but in the case of you buying a vehicle either way; you are spending say $100K either way:

1. You pull the cash out of your savings/investments...etc. and lose whatever that money was going to make
2. You take a low interest loan (0%, 0.99%...etc) and keep that $100K invested where it makes money

The money making more money and you making the payment with the investment revenue, is the smarter way to go.