Posted on 10/02/2005 4:37:55 PM PDT by John Jamieson
The Intergalactic Motor Company
You’re sitting on the couch quietly watching the game on Monday night, when a loud humming noise outside makes you run for the front door. You’re just in time to see a gigantic UFO fly directly overhead, headed right for town. You jump in your old car and follow the ship to a clearing just north of downtown. Just as you arrive the ship does a few playful rolls in the air, shoots light beams of every color and sounds some powerful musical notes. Just like Close Encounters you think, as you study the ship.
The ship suddenly shoots out a powerful laser beam turning the field below it into a large glass parking lot. As the ship settles slowly down toward the ground you can see the side toward the road slowly morph. Giant windows appear. Lights come on inside. It’s turning into a new car show room. A huge scrolling sign appears above the windows: “ ….. Any car you want …… no fuel required for 120,000 miles ……. Intergalactic Motor Company, Inc. …… Any”
As the showroom touches down, an elaborate doorway and ramp appear, just as dozens of shiny new cars appear through the windows. A car salesman comes down the ramp. He looks kind of like that the rocket ship salesman in Star Wars.
“Ladies and gentlemen, Intergalactic Motors Company, in cooperation with the governments of all 50 states, the EPA, CARB, and DOT is here to provide you with the finest technology in automobiles that the Universe has to offer. We can duplicate the look, safety, reliability and performance of any car made on this planet. In our comprehensive factory, service facility, and showroom, you see before you, we can produce your car in 24 hours or less. Our secret technology allows us to produce these cars with power plants that need no fuel of any kind for exactly 120,000 miles. At that point the car will self-destruct, and we will allow you the trade-in value of the equivalent earth made car on your new one.”
You immediately have a thousand questions. A hundred or more, smaller customer representatives pour out of the doorway inviting everyone to come in and see the 2005 IMC automobiles. You rush forward and are meet by a unisex alien grinning from ear hole to ear hole. Pulling out your calculator, you quickly realize that these cars are priced about 40% more than earth built models, but the window sticker does say “ZERO fuel cost per year.” Your sales rep assures you that all of your other operating costs will be exactly the same as the earth built model, but you will never have to stop for, or pay for, fuel again.
You have been thinking of replacing your old car with something that gets much better mileage. And the cars do seem to be identical to the models you’ve been investigating (except for logos). People are test driving them all over town and raving out their windows as they pass.
“Is 40% more a good deal for a car that uses no fuel”, you ask yourself. “I think I go home and ask the good people on FreeRepublic”.
My present car, an eeevil SUV, uses about a gallon a week. Not sure if this is mostly evaporation since I don't drive much. I spend more on chewing tobacco, which is why I drive at all: to get to the store to buy chewing tobacco.
I'm with you. I drive only to get cigars and to work on two Corvetts we're restoring/cloning. A 58 and a 66.
Besides, my Sasol stock is paying for all my gas.
Bunny / Pancake
Hell, a buddy of mine and I invented that company back in '69. Just didn't have enough weed to get it goin' real good.
I have an 89 BMW with 35k miles..about 2k a year.. that's about 150 gallons of gas a year.. The other car is to new to really figure.. We've had it 5 months and have 1300 miles on it......
Don't think it'd pan out for me...
How about a '63 split window coupe, with a 327/FI (In Rivera Red) ???
Huh?
OK! I think.
No moral dilema like handing over each and every black person in America as per "FACES DOWN THE WELL"..
Not sure I like the self destruct part... What if I'm going 84 mph on the freeway when I hit my 120,000th mile?
Hell, my '78 Volvo's odometer stuck around that number..
I was going to ask you the same thing.
> ... exactly 120,000 miles. At that point the car
> will self-destruct, ...
Although that's the design life of the typical Detroit
scrap pile, I normally drive decent models into the
ground, with 230K+ on our backup mini-van now. We expect
to keep the #1 car, a VW TDI running well past 120K.
Please ask again when you have a more reasonable life
cycle span :-)
> “Is 40% more a good deal for a car that uses no fuel”
It depends on many factors, some of which are personal:
- time value of money (not a big factor lately)
- fuel consumption of the comparable mundane car
- projected cost of fuel
- how much you drive per year
We essentially made this calculation when we bought the
TDI (45 mpg EPA, 38 actual, diesel). It cost easily 140%
of what a comparable Detroit compact wagon would have
cost. We expect the fuel costs to save us more than that
+40% over the life of the vehicle. With the recent spike
in petro prices, we may hit break-even sooner. If it used
NO fuel, we'd hit BE early next year.
Around 60,000 miles you break even. By 120,000 miles you've saved money about equal to the 40% premium you paid out for the car.
This is assuming an average fuel efficiency of 15 mpg.
I like the TDI approach and I think we'll see many more in the next 3 years. Ford has a nice one in the Focus in GB.
If you really want to to put pencil to paper, change the assumptions to whatever you like.
It is a "word problem", but it requires math to get a logical answer.
You didn't show your work coconutt.
Did you include time value of money, extra sales taxes, extra insurance, etc? What price car?
Estimated value of a new car: $25,000
+40% = 35,000
Difference = 10,000
Assume gas = $3.00/gal (including gas taxes)
Extra insurance and other costs do not factor in as the problem has the premise that all other costs for the same category of car remain the same.
Assuming 15 mpg, the Intergalactic vehicle's life span of 120,000 miles is equivalent to 8,000 gallons of gasoline.
At $3/gallon, 8,000 gallons of gasoline is equal to $24,000. The first 60000 miles will save $12,000. The last 60,000 will save an additional $12,000. If you toss in an estimation for the decrease in value of the dollar over time due to inflation, you might end up just breaking even or a little better, but the problem with that calculation is that the money you don't spend could be saved and invested with a higher rate of return than inflation, and thus you come out further ahead. Too many variables when you go beyond the simple calculations for the value of the gas-free car over its 120,000 mile life span.
It would be far better if the prospective buyer would indicate what category of vehicle they would like to purchase so the calculation can be done on a case by case basis.
Essentially, the less fuel efficient the vehicle the better the deal of paying for your gas up front.
If you plug the variables into a spreadsheet, you'll find that a more expensive SUV is a better deal over 120,000 miles than a fuel efficient compact model when the cost of fuel is not a factor.
In both cases, however, the buyer does end up saving money.
If you want someone to calculate a real life scenario were such a car available, you'd have to provide the complete critical stats for the buyer, including how many family members are expected to drive the vehicle, age of the buyer, credit rating, size of the expected down payment, financing institution, interest rates, criminal record, driving record, preferred insurance company, etc. If you want someone to calculate in the sales tax, you'll have to let us know which state this is taking place in, which county and city the transaction is taking place in, what the relevant taxes are, what are the vehicle registration costs, and the conditions of the roads in the areas most travelled.
At some point the exercise becomes an exercise in futility.
But if a vehicle that costs $25,000, has a Intergalactic equivalent valued at $35,000, that gets 25 mpg is sold to a buyer, that buyer can expect to make back most of the additional expense at around 83,333 miles.
An SUV that costs $35,000, and has an Intergalactic equivalent of $49,000, could get about 15 mpg. The break even point will be at 70,000 miles.
Less fuel efficiency translates to greater savings. Higher gas prices also speeds the rate of recovery in value.
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