The bane of my existence has become the bridges in and out of Levin. Having accepted a new and challenging role in the Horowhenua region, I now am forced to relinquish my good habits around cycling to work (which have netted me an 8kg weight loss in the last few months in addition to hundreds of dollars in savings) in exchange for driving the admittedly slightly shorter distance, simply because the bike cannot negotiate the challenging high speed bridges in and out of Levin safely.
This is a big step backward for my plans to reduce my environmental footprint and lower my petrol costs. Not to mention that with my new role, I may be expected to travel great distances each week. But with each change comes the opportunity for positive adjustment.
I basically need to replace my car anyway. There’s no rush, but there has been an unsightly bit of cosmetic damage that would cost almost as much as the car is worth to repair. The main question is what type of car do I aim to get next – a petrol car or a hybrid? My main focus is to drive a car that at levels of high (read: sales career) usage, realistically pays for itself over time. There’s no point buying a car that’s cheaper upfront if the operating cost is over $1000 or more extra per year. If this leads to a reduction in carbon emissions that is all well and good as well.
The main problem with hybrids has been cost efficiencies. Hybrid cars have often been reviewed negatively in the past, particularly in the US where many of these reviews originate from, simply because the economics do not stack up – the comparatively miniscule savings in fuel does not offset the higher capital cost of the new product. But this is not so much the case in NZ, and in particular is not so much the case in the second hand hybrid market, which is now flooded with apparently reasonable quality vehicles available for even less than $10,000. Part of the reason for this is that New Zealand taxes fuel far more heavily than the US, meaning that many of the reviews you read about hybrids ought to be discounted in the New Zealand context.
I’ve scoured online sites and found a number of second hand hybrid cars for what I would consider good value – there is even one currently on sale for $2.50 with no reserve, although it has over 170,000 kms to its name. But, more to the point, there are a range of cars in the $6,000 to $8,000 price range, available for immediate purchase. It’s not like there’s just one or two of these options – there are dozens in this price range, each with well under 100,ooo kms to their odometer. Of course, with Trade Me, you’ll almost certainly need to make a trip up the line to get to it.
I’ve done a spreadsheet which covers the calculations to justify a ROI of over 15% at the price point of $6995. It’s important to note that this calculator assumes continued fuel price inflation of 2.2% per year (around about the 10 year average in NZ). Because I’m replacing my car anyway, all I’m really doing is stripping the operating cost in a way that saves me money and pays for the new investment.
https://www.balancetransfers.co.nz/wp-content/uploads/2019/03/Jazz-vs-Hybrid.xlsx
The next thing to look at is how I can finance it, or if I have to pay cash. That is a question for another article, but one of the benefits of having a profitable business is that I can potentially put a lease through it.
A car that pays for itself in six years that’s significantly more eco-friendly for a traveller? Hard to say no to.