When I bought the Dog Chariot in 2000, I planned to drive it 10 years and then, at retirement, buy what I figured would be the last car of my driving career―ten or fifteen years on from 2010 and I’ll be superannuated out of the driver’s seat.

Three-dollar-a-gallon gasoline, with prospects of a permanent rise to $4.00 or even higher, gives me pause, though. Can I really afford to drive a car that gets 18 miles a gallon on a good day? At $3.00, every round trip to my office sets me back $6.00; a month of commutes puts a $120 dent in my budget. When gas rises to four bucks a gallon, as it undoubtedly will, just getting back and forth to work will cost $160 a month. 

So the question is, if I bought a coveted Prius, how long would it take to pay for itself in gas savings?

A visit to the online Kelly Blue Book reveals the average cost of six 2006–2008 used Priuses is $22,720. My car, a 2000 Sienna in good enough condition, is worth $6,610 as a trade-in or $8,555 in a private-party sale. I have $15,000 in savings set aside to pay for the next vehicle.

$22,720 (cost of late-model Prius) – $8,550 (Sienna sale price) = $14,170.

So the amount for me to come up with, $14,170, consumes all of my car purchase savings and then some—because you can be sure taxes, licensing, and registration will push the cost of the Prius well above $22,720. Thus my dollar cost for the new vehicle would be $15,000 and then some.

If gasoline stays at $3.00 a gallon, it would take 10.4 years to spend (“recover” would not be the operative term) my cost for a car that makes the same gas mileage. If the cost rises to $4.00 a gallon, the new vehicle will pay for itself in a mere 7.8 years. This would be accelerated by the Prius’s more efficient gas consumption. So, if the Prius used half as much gas as the Sienna does, then (says intuition, not real math) the vehicle would pay for itself in 3.9 to 5.2 years.

A lot of outrageous claims are made for the Prius’s gas mileage. The EPA has said it makes 60 mpg, but then we’ve been told the EPA’s figures are inaccurate across the board. A more rational claim is probably around 46 mpg. That’s 2 1/2 times the Sienna’s gas mileage. That would mean a Prius would recover its cost in gas savings in 3.12 to 4.16 years, assuming the cost of gas permanently stays in the $3 to $4 per gallon range.

This strikes me as only marginally cost-effective. While it would be good to cut monthly gas bills from $120 to $48...hmmm...make that excellent...first, I’m skeptical about whether that would actually happen and second, it would require me to withdraw $15,000 out of savings, where it generates around $100 a month. So I sacrifice $100 a month to save $72 a month on gas?

That doesn’t sound cost-effective to me. Better to drive the Dog Chariot until it falls apart like the minister’s one-hoss shay. By then presumably the 15 grand will have grown enough to afford a Prius.

frugality