When I bought my 1997 Camry last October I decided to keep track of all my vehicle expenses so I would know my total cost of ownership. I know that paying cash for a used car is the frugal option and I thought it would be interesting to compare my total cost of ownership to that of a new Prius. Some people claim that the total cost of owning a Prius is less than that of buying a used car.
I currently have a cost per mile of $0.84. That is counting the entire cost of my car as depreciation. If I use a more realistic figure of $500 for depreciation my cost per mile is $0.28.
I used the Edmunds.com site for determining the total cost of ownership of a Toyota Prius. (I’m not sure if the effect of the recent recalls is reflected in their figures yet.) By their estimates a Toyota Prius would have a cost per mile of $0.42 after five years. Their figure included financing in the cost. If you took out financing the cost would be $0.37 per mile. Although if you paid cash you should probably consider the interest you would have earned on your savings that went for the car purchase.
I was surprised that the difference in the cost per mile wasn’t greater. The Prius is one of the better car values for both operating costs and holding on to its value though. With most vehicles there would be a higher disparity. Even if there is only a difference of $0.10 per mile that adds up to $1500 a year if you drive 15,000 miles in a year. As well as the Prius did it is still more expensive to own than my Camry unless something happens to make the Camry almost worthless in the few thousand miles which I think is unlikely. Anyway, I won’t fault someone for buying a new car because if nobody buys a new car I won’t have a used car to buy.