Comment by usea | Hacker News Reader

Comment by usea | Hacker News Reader

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My post is about the cumulative cost over ten years, not only the purchase price. And naturally it depends on the condition of the car you're comparing. You could find a broken civic for less than 1k!

I chose to compare a 2016 Civic with ~60k miles to the 2023 Bolt with ~0 miles. The market price for the Civic is ~18k [0], and the lowest for which you can realistically get a Bolt is the EUV for ~32k [1]. I also considered 12.5k in state and federal tax breaks, which decrease the purchase price of the Bolt to 19.5k.

Here is a cumulative vehicle cost calculator https://afdc.energy.gov/calc/ It makes a graph, from which we can look at the value for year 10.

Add a 2023 Bolt, and a 2016 Civic. Change the price of the Bolt to $19.5k, and the Civic to 18k. Choose your state for energy prices. You may also change the gas price or the number of miles you drive. Click Get Results.

My results are Civic: 52k, and Bolt: 45k. That's assuming that the ratio between gas and energy prices doesn't change in the next ten years.

[0]: The site itself pulls a value of 18,640 from somewhere, but my 18k value came from online listings. My wife looked for these, and I think she mainly used KBB.

[1]: The Bolt EV cannot be purchased, only the EUV. I called about 20 dealerships. After 3 weeks I had gotten several offers to buy vehicles for 32k and higher, but none lower.

Can't access the website, but you are likely aren't including depreciation. To me, it looks like you are trying to prove your point without actually making a fair comparison.

Also, a Civic is a much better car than a Bolt, it's a silly comparison to make. You should compare a Bolt with a car with similar features like space, how it feels to drive one etc.

The comparison is on cost. It is explicitly not a goal to include something like how it feels to drive one. I don't like cars, and none of them feel good to drive. I don't want a car, but I have to own one for transportation. I want to own the cheapest one I can that can still reasonably and safely get me around. I don't care that you think it's ugly or whatever. I'm not using that as criteria.

You have no reason to question my motivation, and it's unreasonable to make up possible deficiencies you imagine my methodology might have without even attempting to understand what is there. I provided plenty of information. The link works.

Depreciation never enters into it, nor should it. The model is that you buy the car, drive it for ten years, and then add up how much you spent on everything: The original purchase, fuel, maintenance, insurace, registration, etc. The value of the vehicle at any point after you buy it is irrelevant. You never sell it. It simply ceases to exist at the end of ten years. If you think I should include a sale price in the model, it will not be favorable to the car that sells for 15k less at t=0 and is 7 years older. But I'm not including that, because it's not useful. I'm looking at the cost for driving a car for ten years. When I do, a new bolt is cheaper than a used civic.

The prices are very similar (18k vs 19.5k) after tax break. And the electric one costs a lot less to drive over time, so after ten years you spent less money. It's not complicated, and the math bears it out easily. I brought receipts. Just look at them. Or do it yourself. Or propose your own model.

> Depreciation never enters into it, nor should it.

Well that is not a realistic comparison. Residual value absolutely must be considered in the comparison.

(I don't know which car it would favor, didn't try to research that. But either way, you need to include the residual value in the computation.)

> It simply ceases to exist at the end of ten years.

I mean but of course it doesn't! The car doesn't evaporate. You can sell it after those 10 years and get some money back. It's not realistic to just ignore that.

You're right, the model would be improved by adding depreciation. I suspect it would increase the disparity, making the Bolt even cheaper. But I don't know that without looking into it more. I think I will at least look at the topic when I do this again next year. Thanks for bringing it up to me.

There are lots of other things not included in the model, too. I would need to pay a contractor to add a 240 outlet to my garage, which will be like $500 since it's next to the breaker box. I will also spend hours of my life waiting for the car to charge during trips over those ten years. I bet people probably underestimate how much that will suck before they buy an EV. I could include a healthcare cost adjustment due to safety ratings, the impact of which I probably grossly underestimate.

I think the biggest omission is change in the gas:electricity price ratio over ten years. Using current values for the whole ten years is a mistake, considering it's the main difference between the options and is likely to change a lot.

edit: also I'm sorry for the tone of my previous post. I didn't mean for it to sound that way.

> I suspect it would increase the disparity, making the Bolt even cheaper.

Depends, but depreciation generally benefits older cars and hurts new cars.

If you buy a Civic that has depreciated to 5-6K, there's not a lot of room to depreciate more. Unless it completely dies, you can use it for a long time and it's still worth 3-5K. Occasionally older cars even go up in value. I bought an Acura for 6K and sold it for 6K almost 15 years later. I bought a Mazda for 3K and sold it for 6K nine years later.

New cars are the worst for depreciation, the moment you drive out the dealer lot it's worth thousands less. And over a few years, the depreciation curve is quite steep until it flattens later. Very brand/model dependent so YMMV.

Factoring in government incentives is a tricky thing. See college loan forgiveness.

I already own an EV and can't cash in retroactively on the latest government incentive without purchasing another. But I could probably find some loop hole and sell my used EV to my neighbor, then buy my neighbor's identical EV and we both qualify. We don't exchange any money, but each file for some thousands of dollars from the government.

If the government lets even the purchase of used vehicles qualify, and lets you qualify, say, once a year... my neighbor and I can just keep trading cars every year and get paid.

But that doesn't seem to be any valuable way to calculate TCO.

https://www.irs.gov/credits-deductions/used-clean-vehicle-cr...

> Beginning January 1, 2023, if you buy a qualified used electric vehicle (EV) or fuel cell vehicle (FCV) from a licensed dealer for $25,000 or less, you may be eligible for a used clean vehicle tax credit (also referred to as a previously owned clean vehicle credit). The credit equals 30% of the sale price up to a maximum credit of $4,000.

They have to be a licensed dealer, and the benefit is a portion of the sale price.

> Change the price of the Bolt to $19.5k, and the Civic to 18k

Ok if that's your starting point your numbers make sense.

Are you sure about 12.5K in tax rebates? Sounds high. My partner just bought a VW EV a few months ago and didn't qualify for a single penny in rebates.

So for me the comparison would be Bolt at full $32K vs. a $6-$8K Civic since I like to buy cheaper used cars.

I didn't pull the trigger, and thus didn't pay a tax person to tell me for sure, but I am fairly certain of the rebate.

For the federal credit, only some EVs qualify, and the list changes each year. You also have to have a tax burden within a certain range. The credit for used vehicles has different requirements, too. Starting next year, you get the rebate back as cash from the dealership at the time of purchase, which is nice.

My state offers a 5k credit for new EVs costing under 80k with no other strings. Next year they're adding 2500 more if the cost is under 35k.

> So for me the comparison would be Bolt at full $32K vs. a $6-$8K Civic since I like to buy cheaper used cars.

A no-brainer at those values, for sure! The last vehicle I bought was a 6 year old Focus for $7k. Because my family has changed since then, I was looking at used cars in the 15k range instead of under 10k

I would never have even considered a new car if the tax credit hadn't pulled the Bolt down into a range that made it competitive. All of the other EVs either cost too much initially, or didn't qualify for the credit. Also a lot of them had really small driving distances on one charge, which surprised me.

Another thing I found surprising, was that some people purportedly purchase a new EV each year for the tax credit. They drive it for a year, and sell it next year at a small profit. Market liquidity not totally accounting for the credit value (varies by model). I am far too risk-averse to do such a thing.

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