Why buying my car wasn’t (totally) a good financial decision

Prius toy car

I own a 2004 Toyota Prius.

It’s not a flashy car, at least it isn’t these days. It’s two models behind the current Prius, for one, and the Prius brand isn’t as flashy as, say, Tesla, these days.

But I’m still proud to own it, not just the fact of owning it outright, which is cool enough, but also that I never had to borrow money to buy it. I saved up and wrote a check.

And yet, as proud as I am, I can admit here that it wasn’t the best financial decision I could have made. Even putting aside the financial considerations inherent in owning a car versus not owning a car (which are considerable), my decision making process wasn’t quite always financial.

Here’s what happened.

Car choice

Figuring out what car to buy was a long and involved process. I wanted something reliable, compact, and with good gas mileage. Something that was around 6-10 years old.

One car that made my short list was the Mazda 3. A nice, solid car, I was able to find it used for around $7,000.

But I had always wanted a Prius. Ever since I was 17 and my friend told me about a car just coming out in Japan that was somehow able to charge its battery from braking. Why didn’t all cars do that?

A Prius with my criteria was around $10,000.

These two cars appeared to have the same level of reliability, had the same age, and aside from the gas mileage was reasonably identical in terms of my needs.

Gas mileage

So all that left was the gas mileage.

Now, I’ve long been of the opinion that gas prices are going to go nowhere but up. And since 2008, I’ve been pretty much consistently wrong on this account. But I still believe that gas is priced too cheaply (for both environmental and planning reasons) and eventually we will need to raise the prices to help fund our crumbling world, or prices will rise on their own because we’ll run out of all the easy oil in the world.

So if I wanted to purchase the Prius, I needed to show that the difference in gas mileage would be significant enough over the next few years to make it worth the extra cost.

Now, the Prius gets significantly better gas mileage than the Mazda 3, a 46 mpg compared to a paltry 28 mpg.

But assuming $4 a gallon, even if I drove 12,000 miles a year (which I don’t), I would save less than $700 a year. That case would mean that I would make up the cost in about 5 years.

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But if I drove only 6,000 miles a year (which is about right), we were looking at 9 years to make back that money.

But if gas stayed at $3 (which it more or less has since then), the break even point would take even longer.

So even in the best possible scenarios, I would make my money back years later, if at all. It was a weak bet.

Prius for the win

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Not every decision needs to be the most optimal to be successful.[/perfectpullquote]

I bought the Prius anyway.

Why? Because I wanted a Prius.

I had been wanting to own a Prius for 15 years by this point. And I had the money to do it. I had the $10,000; I didn’t need to take out a loan. I could write a check.

So I did, spending thousands of dollars “more” than I “had to”.

I love my Prius. It may not be as rugged as a Subaru Impreza (another car I was looking at), but at the time of writing, it just got me through 20 miles of gravel mountain road driving, so I can’t complain.

And while it’s not a Tesla, it still feels like a magical space car for the rest of us.

Now, this isn’t on nearly the scale as buying a home you can’t afford, higher-education you’ll never be able to pay back, or credit card debt that you didn’t need to rack up.

But it just goes to show that not every decision needs to be the most optimal to be successful. I still want you to be able to afford it though.

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