I recently bought a 2011 Toyota 4Runner for camping trips. I love the car but the cost of gas to drive around town is making me cringe! For now, I'm not willing to sell the 4Runner. I have been kicking around the idea of buying a used Nissan Leaf for around $7500 as a commute around town car.
I probably would not buy a 2nd car until my daughter starts junior high in a year and a half. Once she starts junior high, I will have 7 years of driving across town 2x/day to drop off/pick up - about 24 miles a day. Eventually she could start driving herself if we had a second car, saving me a ton of time. I'm still working and time is money!
Today I crunched numbers and it looks like it actually could save me a fair amount of money over time - PLUS it's good for the environment. PLUS my daughter could drive herself to school when she is old enough.
I was kind of surprised how good the numbers looked. Of course they are all based on assumptions and the assumptions are just that - assumptions!
Here are the assumptions I used:
I drive 12,000 miles a year.
If I had an EV like the Leaf, I would drive it 7k/yr and the 4Runner 5k/yr.
Gas is $3/gallon and it will increase by 10% a year.
Electricity will cost 5% what gas costs per mile. (I would charge only at home I imagine)
Cars will depreciate at 10% per year, except that if I have a second vehicle, the 4Runner will only depreciate 8% per year.
Car repairs will increase at 10% a year
4Runner repairs will be cut in half due to decreased driving with a second car.
Both cars can last another 10 years
My apologies I can't figure out how to make the table format correctly. I have attached a spreadsheet that is easier to view.
At the end of the day, it looks to me like the second car would actually SAVE me $23,000 over a period of 10 years.
Now, instead of buying a leaf I could INVEST $7500. Assuming an interest rate of 6%, I would end up with about $13,000 from the investment.
If that were true, and I take into account the opportunity cost of not being able to invest my money, I would still end up ahead by $10k.
True Cost to Own over 10 years Option 1: 4Runner Only 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 TOTAL Value of Car $13,500.00 4Runner Depreciation $1,350.00 $1,215.00 $1,095.00 $984.00 $885.60 $797.04 $717.34 $645.60 $581.04 $522.94 $470.64 $9,264.20 4Runner Repairs $1,200.00 $1,320.00 $1,452.00 $1,597.20 $1,756.92 $1,932.61 $2,125.87 $2,338.46 $2,572.31 $2,829.54 $3,112.49 $22,237.40 4Runner Gas $2,250.00 $2,475.00 $2,722.50 $2,992.50 $3,291.75 $3,622.50 $3,975.00 $4,380.00 $4,815.00 $5,302.50 $5,355.00 $41,181.75 Insurance & taxes $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $715.00 TOTAL OPTION 1 $73,398.35 Option 2: 4Runner + Leaf - drive leaf 7k/yr, 4Runner 5k/yr 4Runner Value $13,500.00 4Runner Depreciation $1,080.00 $993.60 $945.60 $838.46 $771.39 $709.68 $652.90 $600.67 $552.62 $508.41 $467.73 $8,121.06 4Runner Repairs $600.00 $660.00 $726.00 $798.60 $878.46 $966.31 $1,062.94 $1,169.23 $1,286.15 $1,414.77 $1,556.25 $11,118.70 4Runner Gas $937.50 $1,031.25 $1,134.38 $1,247.81 $1,372.59 $1,509.85 $1,660.84 $1,826.92 $2,009.61 $2,210.58 $2,431.63 $17,372.97 Insurance & taxes $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $715.00 TOTAL $37,327.72 Leaf $7,500.00 Leaf Depreciation $750.00 $675.00 $607.50 $546.75 $642.08 $427.87 $385.08 $346.57 $311.92 $280.72 $252.65 $5,226.14 Leaf Repairs $300.00 $330.00 $363.00 $399.30 $439.23 $483.15 $531.47 $584.62 $643.08 $707.38 $778.12 $5,559.35 Leaf Electic $112.50 $123.75 $136.13 $149.63 $164.59 $181.13 $198.75 $219.00 $240.75 $265.13 $267.75 $2,059.09 Extra Insurance and tax $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $220.00 TOTAL $13,064.57 TOTAL OF OPTION 2 $50,392.30 RECAP OPTION 1 $73,398.35 OPTION 2 $50,392.30 DIFFERENCE $23,006.05 |