I Just saw a commercial for the Chevy Volt, which I found intriguing. The gist of the message goes like this: female owner of the car talks about how good looking the car is and then finishes by exclaiming that what she loves most is the “the savings on gas.” So I thought I’d do some quick math to figure out of how much you might save when compared to a similar car.
According to U.S. News, the average price paid for a volt is $39,000 — incidentally, about the same you would pay for a new low-end Mercedes-Benz. But, to be honest, the Volt is no Benz. So let’s find something comparable with high gas mileage. Let’s try a Hyundai Sonata, which has similar gas mileage (when electricity is not used on the Volt), has a larger interior, more power, and a far superior warranty (the Volt, however, does beat out the Sonata with standard navigation).
The biggest difference? According to Motor Trend, the Sonata’s average cost is $25,850. With the federal tax credit on the Volt (which you will gain when tax time rolls around), it comes in at around $33,000, which equals a $7,000 difference to make up.
If the average commuter drives 30 miles per day (as per the bts.gov), and does so everyday of the year, one will drive 10,950 miles per year. For this case, we’ll bump that up to 13,000 miles, which many claim is the average miles driven per year in the U.S. In the Volt, we’ll assume you only use it in electric mode (a little unrealistic, but we’ll go with it). If you own the Sonata you will average 37 MPG and will need to purchase 351 gallons of gas at approximately $4 per gallon for a total of $1404 in a year.
Considering this as the only expense for the Sonata, and no expenses EVER for the Volt (including gas), it would take about 5 years to make up the price savings that the Volt claims.
The average American buys a new car every 4.5 years.
If you want to buy a Volt, God bless ya. But don’t buy it for the cost savings, because you won’t save a dime, unless you own it much longer than five years (given it doesn’t have maintenance issues, ever use gas, or catch on fire). Buy it because you want to make a statement or you think “it looks cool,” as my wife does (personally, I think it’s a pretty average looking car along the lines of a Corolla or an Altima, but that’s just me).
As a former financial advisor, and current penny-pinching miser, I would say even that is foolish. But so is buying Starbucks coffee and smart phones, and we all succumb to those indulgences. Who am I to judge?
Additional note to marketers (ahem, GM, are you listening?): Insulting someone’s intelligence, won’t win you fans. Limiting your market won’t make you money. When Chevy tries to convince Americans that they will save money on the Volt, everyone who has passed fourth grade math will know something sounds “fishy.” Targeting third-grade educated, upper-middle income Americans gives you a very limited market of child actresses and monarchical princes, which, of course, may actually explain the Volt’s sales figures.
JUSTIN VELEZ-HAGAN is Senior Contributing Writer and Commentator for Politic365.com. He is also the National Executive Director of The National Puerto Rican Chamber of Commerce and an international developer of senior living facilities. He can be reached at Justin@Politic365.com.