My regular readers might recall the “Hybrid Hoo-Hah” where I showed you that you’ll have to drive your hybrid for more than full century to recoup the extra purchase price. Well, today, I’m going to show you an alternative. It’s called biodiesel. It serves double duty – we can re-use all the oil in every dough nut shop fryer and still get down the road for extra cheap.
Take my word for this when I tell you that biodiesel costs about 60 cents per gallon to make. That gives me a savings of about $2.30 per gallon.
I’ve two choices on cars – a new Jetta or a used Dodge truck.
The Jetta – $20480
The Dodge – $22000
The Jetta gets about 40 MPG and the truck gets about 17 MPG.
The Jetta, however, will depreciate considerably the moment I drive it off the lot. That’s an immediate $4096.00 drop in my investment. The truck will only depreciate slowly over time, as I accumulate mileage. That’s another issue though and we’ll get into it in a moment. For now, just keep it in the back of your mind.
8000 miles per year divided by 17 MPG = 471 gallons per year
8000 miles per year divided by 40 MPG = 200 gallons per year
200 x $2.30 = $460 fuel savings per year (gas vs. biodiesel)
471 x $2.30 = $1083.3 fuel savings per year (gas vs. biodiesel)
22000 divided by 1083 = 20 years to recoup the full cost of the Dodge
20480 divided by 460 = 44 1/2 years to recoup the full cost of the Jetta
Since I don’t expect to be driving either vehicle that long, I take a 7 year approach.
Assuming that I keep either vehicle for 7 years, let’s see what I’m out.
471 x 7 x .60 = $1978.20 for fuel for the Dodge
200 x 7 x .60 = $840.00 for fuel for the Jetta
Now with an extra 56,000 miles on them (8000 miles per year x 7 years) =
The truck is worth = $17,500
The Jetta is worth = $16,000
Yet another reason that hybrids are hoo-hah.