[V8] running the numbers

[Bastian Homburg]

Owning a V8 is a costly undertaking. Significantly more costly than 
comparable cars in the same segment I have to say, even though it is 
reliable and repairs are few and far between.
TCO for mine is a staggering US$ 0,93 per mile, or EUR 0.40 per 
kilometer - and that´s with all costs incurred over the last 110,000 
miles I have accumulated on both V8 I own(ed) and a residual value set 
to $1,000.
I service my car @ Audi and don´t work on the car myself, get 19 mpg 
overall  - and, the biggest chunk by far -  a gallon of gas is roughly 
$7.80 around here.
I can break down the numbers even more:
 - timing belt service: $2,000 every 75,000 miles -> 2.6 Cents/mile for 
that alone. Comparable cars have chains that don´t need to be replaced 
at all.
 - Brakes: new UFOs ($1,200 including pad change at 45,000) every  
90,000 miles -> front brake wear is 1.3 Cents/mile. Add that those 
"faulty by design" rear calipers and their handbrake mechanism that go 
bad every couple of years, and you're at 2c/mile just to keep the brakes 
in working order.
 - oil consumption: 1qt ($4) every 900 miles.

I`d totally agree on the "find an older low value car with good fuel 
economy and drive it forever" strategy being best.
My Mercedes 190 fits that bill just perfectly. If it only were as fast, 
comfortable and fun to drive as the V8....

 


Mike Arman wrote:
> Idly playing with my calculator this afternoon, came up with some 
> interesting figures.
>
> 1990 V8Q, value of car about $5k (generous), gets about 20 MPG.
>
> Remaining service life is about 80,000 miles (assumes 120K on the car), 
> fuel used in 80,000 miles is 4,000 gallons at $4 a gallon, or $16,000. 
> Residual value of car set at zero - cost to drive 80,000 miles is thus 
> $21,000, or 26.25 cents per mile.
>
> If I set the value of the V8 at $3,000, my cost to go 80,000 miles is 
> $19,000, or 23.75 cents per mile. If the residual value of a 200K V8Q is 
> $1,000, my cost is $18,000 - or 22.5 cents per mile.
>
>
>
> 2001 Honda Accord, value of car about $8K (guesstimate), gets something 
> like 26 mpg (real world).
>
> After the same 80,000 miles, the residual value of the car will be in 
> the $4,000 range, so the "cost of the car" is $4,000. 80,000 miles at 26 
> mpg at $4 a gallon is $12,300 in fuel, so to drive 80,000 miles costs 
> $16,300, or about 20.375 cents per mile.
>
> Basically, it costs me a not quite a nickel a mile more to drive my V8Q 
> than it does to drive my Honda. Yes, I know maintenance is more 
> expensive, but I do a lot of it myself. Insurance is actually less (!) 
> so that offsets part of the maintenance cost.
>
>
> Now I'm going to pull some numbers out of the air - we find a car that 
> delivers 40 mpg and costs $25,000. After 80,000 miles, the residual 
> value is $15,000, so the "cost of the car" is $10,000 for the 80,000 
> miles plus 2,000 gallons of fuel at $4, for $8,000 in fuel, total 
> $18,000 making the net cost 22.5 cents per mile.
>
> Suddenly the V8Q doesn't look quite so bad . . . even if it does hurt at 
> the pump. We need to look at TCO, total cost of ownership, just like the 
> computer guys.
>
> Sounds like the best strategy is to find an older, low value car that 
> gets 30 mpg or better, and drive it forever.
>
> (Unfortunately, in most parts of the US, mass transit is rarely a viable 
> option. Where it IS available, you'd be way ahead taking the train.)
>
> Where it hurts is if you drive 400 or 500 miles a week - which is not 
> unusual. Your cost per mile doesn't go up, but you are putting on a lot 
> of miles in a short time, so you are spending a large amount between 
> "revenue events" (weekly paychecks). It doesn't hurt so much if you 
> drive only 10K or 15K miles a year, then the bleeding is slower.
>
>
> Anyone see any major holes in my methodology?
>
> Best Regards,
>
> Mike Arman
> 90 V8Q, which may not be such a bad deal after all, and is MUCH nicer to 
> drive than the boring Honda Accord.
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