[V8] running the numbers

[Dave Saad]

I have never actually run the numbers, but I use the same logic.  I  
have the occasional bill - but the rest of the time I just drive.
Much cheaper than new car payments. Not sure I would buy another car  
like the V8 now (fuel costs and Euro/Dollar problems) - but since I  
have it and it runs great, it would be silly to get rid of it.

Now if only my wife would see it this way...

For comparison though, my 98 Explorer is closing fast on 150K miles  
(where the V8 is) and it has been almost problem free.  It eats up  
front suspensions about every 30K miles, and the auto temp control  
flap motor croaked (I fixed it for free - but I had to pull the whole  
dash out) but other than that I can't think of a single needed repair  
in all that time.  I am sure it will need a transmission overhaul  
soon - but that is just normal wear to me. I only wish it got a  
little better mileage.


Dave


On Jan 16, 2008, at 4:10 PM, 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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