What is the Lifetime Value of a Toyota Prius?

Facing cash flow problems after Japan’s mega-quake in March of 2011, Toyota got back in the production loop by announcing that it would focus its efforts on Japan’s number one bestseller, the Prius, offering three new versions of the world’s top-selling hybrid for the 2012 model year.

With one of the world’s largest car manufacturers shifting their focus towards producing hybrids, it’s safe to say we’re about to see a lot more Priuses and other hybrids on the road in years to come. Here’s a look at what to expect from owning a Prius (as of 2011):

Purchase:

2012 price (new): Starting at $23,520 US + tax (excluding the $760 Delivery, Processing and Handling Fee for getting the car from the plant to the dealership [price varies according to dealer]).

Tax rebates: The USA’s federal tax credit was phased out on December 31, 2010 for hybrids. See State and Federal Hybrid Incentives for credits available from individual states. The 2012 Prius plug-in model, however, will be eligible for the most recent tax credits announced, including a $2,500 federal tax credit.

Performance:

Engine: 1.8 Liter Aluminum DOHC 16-Valve Variable-Valve Timing with intelligence (VVT-i), 98 hp @ 5,200 rpm (73 kW @ 5,200 rpm), 105 lb.-ft. @ 4,000 rpm (142 N•m @ 4,000 rpm).

Mileage: 51/48/50 (estimated mpg city/highway/combined).

Warranty:

36 months/36,000 miles warranty on all parts. Hybrid-related parts are covered for 8 years/100,000 miles.

Depreciation:

You don’t want to finish a lease owing more than the car is worth, which makes gauging the depreciation rate so important. According to Consumer Reports, depreciation is the single largest cost to owning a car. Most cars depreciate approximately 65% over five years, which comprises approximately 46% of total ownership costs.

Similarly, most cars depreciate 10-20% in their first year. The Prius’ popularity and great reputation as a well-built, reliable vehicle places it at the lower end of that spectrum. Refer to the following chart for an idea of the Prius’ depreciation rate (based on Kelley Blue Book values for an excellent-condition model purchased from a dealer with typical equipment).

Used Toyota Prius Prices by Year:

• 2010: $21,785
• 2009: $18,630
• 2008: $17,070
• 2007: $16,135
• 2006: $15,700
• 2005: $13,620
• 2004: $11,120
• 2003: $8,315
• 2002: $7,010
• 2001: $6,135

Reliability:

Toyota enjoys a great reputation for reliability and the Prius, in its decade-plus existence, is no exception. Both Consumer Reports and consumers themselves have consistently given the car top rankings, disproving the myths surrounding battery life that cropped up early in its existence.

To answer the battery question, Consumer Reports hooked up the battery of a 2002 model with 208,000 miles on it to their instruments and compared the results with those done a decade ago with a new model. What did they find? Almost no difference whatsoever between the battery performance and mileage of the two cars: 40.4 mpg for the old model, 40.6 mpg for the new model.

Parts:

Batteries: The batteries are expected to last the lifetime of the vehicle without degradation in quality. History backs up that claim, as Toyota states that not a single battery has had to be replaced because of malfunction or defect.

Engine: The life of a Prius’ engine is less stressful than that of a standard car, since it isn’t being run for as long. Toyota upped their oil change requirement to every 10,000 miles in 2010.

Reliability Index gathered the following statistics on the rate-of-parts-breakdown when testing Prius’ with an average age of 6.77 years and 64,000 miles:

With the Prius, the consumer gets a well-equipped, comfortable ride that offers excellent fuel efficiency. And like many other Toyota models, it has earned a reputation as a highly reliable, durable vehicle that’s built to last.

Resources:

• Toyota Prius
• PRIUSchat
• Kelley Blue Book
• Consumer Reports
• Reliability Index