The Exorbitant Cost Of Savings: Don't Buy A Volt If You Value Your Money

Bertel Schmitt
by Bertel Schmitt
the exorbitant cost of savings don t buy a volt if you value your money

Two years after the Volkswagen Golf was launched, it received a fuel sipping diesel in 1976. I presented the launch campaign in Wolfsburg, and the ground shook. It wasn’t because of my campaign. It was because of the body stamping presses. The offices of the Zentrale Absatzförderung, VW’s advertising department, were two floors above.

I presented a campaign that was all on savings. The Golf D had one of the, if not the best mileage of all compacts. Herr Plamböck, the gentleman who had to vet the campaigns before the big boss would see them, looked at my grand savings plan, and said: “Let’s have lunch.”

Over a Currywurst, Hartmut Plamböck said: “Bertel, did you check the added cost of that engine?” I forgot how much it was, but it was a lot. “You will have to drive 80,000 kilometers to get your money back!” Mr. Plamböck thundered. The plastic forks jumped as Plamböck pounded the table. He looked around, lowered his voice and added: “And then, the engine will fall out of the car.” At that time, Volkswagens had a bit of a corrosion problem.

I was reminded of that story when I came across a story in the New York Times that provides a sanity check on savings at all costs. Rarely does one recoup the added investment into fuel savings. Little has changed since my Wolfsburg Waterloo. Fuel savings come at a price, and you have to decide whether you pay at the pump or to the dealer. Paying at the pump makes more economic sense, but more often than not, emotions trump math.

One of the worst investments, says the New York Times story that uses data compiled by TrueCar, is the Chevrolet Volt. Says the Times:

“The Volt, which costs nearly $40,000 before a $7,500 federal tax credit, could take up to 27 years to pay off versus a Chevrolet Cruze, assuming it was regularly driven farther than its battery-only range allows. The payback time could drop to about eight years if gas cost $5 a gallon and the driver remained exclusively on battery power.”

Mind you, the 27 year payback time is based on the TrueCar calculated $31,767 price of the Volt. Without the generous government rebate, financed by your tax dollars, the Volt would still be upside down long after it landed in a museum. At full retail, it would take 45 years to get you your money back. Payback is a bitch.

Driven fully on battery power, the Volt would needlessly drag around its heavy range extender machinery, but at least it would compete with Nissan’s LEAF in the ROI race. The Leaf takes 8.7 years to recoup the investment.

According to the study, “eco” upgrades usually are not worth the money. A Ford Fiesta SFE saves you $23 a year at the pump and on average. With these meager savings, the Fiesta actually beats the Volt in the senseless savings discipline. It would take 26.8 years to get you your money back.

As long as fuel saving cars carry huge premiums, you need to pray for higher gas prices, and you need to pray a lot. A survey by Lundberg says that gas prices need to go to $12.50 a gallon for the Volt to break even. The Leaf would be competitive with gas at $8.53 a gallon.

Are there savings that make sense?

If you really want to reconcile eco and economics, the sixth generation descendant of the Golf Diesel, the Jetta TDI, would recoup the added money before the warranty is up, says the Times. So do the Lincoln MKZ Hybrid and the Toyota Prius. Not only is their mileage much better than the comparison model, their price premium is so low that it can be easily recouped. As Toyota’s Satoshi Ogiso demonstrated a few months ago, savings at no added costs are the true engineering achievement.

(Hat tip to my man in the mountains.)

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  • Dukeofurl Dukeofurl on Apr 07, 2012

    The Porsche comparison is wrong. The Cayenne Hybrid is based on a 3 litre V6 , while the Cayenne S quoted at $64,000 has a V8. A more useful comparison is the standard 3.6l V6 Cayenne at $48,000. This gives a difference in price of $20,000 not the $4000 indicated.

  • BunkerMan BunkerMan on Apr 09, 2012

    I bought my Ecoboost F-150 over a 5.0L one because of the increased tow rating (to tow my travel trailer). I was planning on keeping it for 5 years, so I'm pleased that I will break even within that time. I drive it a little farther than average, so it will probably happen sooner. The fuel economy bump is just a bonus.

  • Nrd515 Usually for me it's been Arby's for pretty much forever, except when the one near my house dosed me with food poisoning twice in about a year. Both times were horrible, but the second time was just so terrible it's up near the top of my medical horror stories, and I have a few of those. Obviously, I never went to that one again. I'm still pissed at Arby's for dropping Potato Cakes, and Culver's is truly better anyway. It will be Arby's fish for my "cheat day", when I eat what I want. No tartar sauce and no lettuce on mine, please. And if I get a fish and a French Dip & Swiss? Keep the Swiss, and the dip, too salty. Just the meat and the bread for me, thanks. The odds are about 25% that they will screw one or both of them up and I will have to drive through again to get replacement sandwiches. Culver's seems to get my order right many times in a row, but if I hurry and don't check my order, that's when it's screwed up and garbage to me. My best friend lives on Starbucks coffee. I don't understand coffee's appeal at all. Both my sister and I hate anything it's in. It's like green peppers, they ruin everything they touch. About the only things I hate more than coffee are most condiments, ranked from most hated to..who cares..[list=1][*]Tartar sauce. Just thinking about it makes me smell it in my head. A nod to Ranch here too. Disgusting. [/*][*]Mayo. JEEEEZUS! WTF?[/*][*]Ketchup. Sweet puke tasting sludge. On my fries? Salt. [/*][*]Mustard. Yikes. Brown, yellow, whatever, it's just awful.[/*][*]Pickles. Just ruin it from the pickle juice. No. [/*][*]Horsey, Secret, whatever sauce. Gross. [/*][*]American Cheese. American Sleeze. Any cheese, I don't want it.[/*][*]Shredded lettuce. I don't hate it, but it's warm and what's the point?[/*][*]Raw onion. Totally OK, but not something I really want. Grilled onions is a whole nother thing, I WANT those on a burger.[/*][*]Any of that "juice" that Subway and other sandwich places want to put on. NO, HELL NO! Actually, move this up to #5. [/*][/list=1]
  • SPPPP It seems like a really nice car that's just still trying to find its customer.
  • MRF 95 T-Bird I owned an 87 Thunderbird aka the second generation aero bird. It was a fine driving comfortable and very reliable car. Quite underrated compared to the GM G-body mid sized coupes since unlike them they had rack and pinion steering and struts on all four wheels plus fuel injection which GM was a bit late to the game on their mid and full sized cars. When I sold it I considered a Mark VII LSC which like many had its trouble prone air suspension deleted and replaced with coils and struts. Instead I went for a MN-12 Thunderbird.
  • SCE to AUX Somebody got the bill of material mixed up and never caught it.Maybe the stud was for a different version (like the 4xe) which might use a different fuel tank.
  • Inside Looking Out Scandinavian design costs only $600? I mean the furniture.