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2010 Honda Insight gets priced

Honda's Insight has been making the rounds here at DailyTech for quite some time. The vehicle first made an appearance as a concept car at the 2008 Paris Auto Show and was revealed in production form at the Detroit Auto Show.

Ever since the vehicle was first announced, Honda batted around the idea of releasing the vehicle in the U.S. with a price tag below $19,000. Today, however, Honda announced the official starting price of the Insight and it will actually be priced just below $20,000.

The 2010 Honda Insight LX will have a base price of $19,800 -- this compares to a $22,000 base price for the standard 2009 Toyota Prius. The next trim level is the Insight EX which will be priced at $21,300. Those that wish to have integrated GPS will have to part with $23,100.

The Honda Insight uses a 1.3-liter four-cylinder engine paired with the Integrated Motor Assist (IMA) hybrid system. The vehicle is EPA rated at 40 MPG in the city and 43 MPG on the highway.

The 2010 Honda Insight will face stiff competition from Toyota's third generation Prius. The 2010 Prius will launch later this year and will have an EPA combined rating of 50 MPG.

It is not known if Toyota will lower the price of entry of the new Prius to combat the Insight in the U.S. It's possible that Toyota may take a page from its Japanese strategy and offer the current Prius at a lower price and maintain the 2010 model as a "premium" offering.

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RE: Cool
By A Stoner on 3/10/2009 1:46:32 PM , Rating: 5
Well, at an inflated driving range of 15,000 miles per year, assuming the car reduces fuel consumption by 20 MPG, that save 750 gallons of fuel a year, or 7,500 gallons in 10 years. A comparably equipped car, with size, quality of build, comfort features would probably cost about $15,000 or less. Think Civic, Mirage and other economy models, and that is the comfort level you buy with these cars. Which by the way, these cars get significantly more miles per gallon that 20. $40,000 minus the $15,000 = $25,000. $25,000 divided by 7500 galons of gas = fuel prices must be $3.33 a gallon at these estimated values for you to break even after 10 years. This assumes the car ends up not losing more resale value than the other car in the same period of time. This is unlikely to be true.

How many times does the battery get replaced over ten years? I know my computer batteries last about 2 years before they only give out about half the original charge. My car battery usually lasts about 5 years for the same charge loss. I know of no battery type that can last more than 5 years without significant loss in it's ability to retain a full charge. Have you heard of any batteries that do?

As for the current model they are showing, at least the cost premium has come down a bit, from more than $10,000 to maybe only $5,000 over a normally powered vehicle. It will be much easier to recoupe those costs over the life of the car than before. A cost premium of $25,000 is going to make the Volt a novelty item.

RE: Cool
By DLeRium on 3/10/2009 1:52:54 PM , Rating: 4
The Camry Hybrid breaks even in 10 years too approximately. But honestly, why would you spend $40k when you can spend $30k. The Prius is looking more and more practical to people now so that even $25k is looking good. The Insight is cheaper now, and so I never understood the hype of the Volt. Sure it's cool you can plug in and go like a cell phone, but why would you invest SO MUCH in a car to break even in 10 years when you can break even using a Prius for much less? Throwing down 40k is much harder than 25k so in the end you might be the same but that initial payment will bite you hard. Poor GM.

RE: Cool
By TheFace on 3/10/2009 3:03:10 PM , Rating: 3
Here is my argument why people will spend the extra bit on getting a hybrid vs. non-hybrid. People are not looking at $30k vs. $40k, they're looking at $500/month vs. $600/month payments, or however they break it down. Then they factor in the life of the vehicle, which they may sell before they have it all paid off. The savings in gas per month is not much, but it "feels" like it as you "feel" like you've gone farther with the hybrid. A large portion of why people buy cars is how they feel about them. (To be fair, GM's quality COULD be as good as Toyota but since people don't think they are, it doesn't translate into $$). This is also why the resale price of a hybrid will be higher than the same vehicle in the standard version.

Now the Volt is a different matter entirely.

RE: Cool
By Mitch101 on 3/11/2009 9:21:01 AM , Rating: 2
Im going to throw the economy factor into play because its not going away any time soon. It may flat line this year however the damage will take years to overcome.

The odds of people getting a 20K car loan is significantly higher than that of a 40K car loan. Even if the 40k car could provide a decent return on investment over a number of years. The number of loans approved for a 40K vehicle may be limited. The days of the hummer's, Escalades, and BMW's financed through home equity loans will be much more limited in the years to come.

RE: Cool
By mherlund on 3/11/09, Rating: 0
RE: Cool
By rburnham on 3/12/2009 6:56:17 PM , Rating: 2
I still have my 1998 Honda Civic. Repairs are still far cheaper than a car payment. Although with these new hybrids on the way, my car may be on its last year for me.

RE: Cool
By DLeRium on 3/10/2009 2:03:05 PM , Rating: 2
BTW your calculations are wrong. You did 15,000 divided by 20 when that really just calculates how many gallons you need for 15k miles on 20mpg. If you were trying to show

40mpg vs 20mpg, that's

375 gal/yr vs 750 gal/yr You really just save 375 gal/year. At $3 gas, it's $900 a year. $9k over 10 years. More realistic would be 40mpg vs 30mpg.

375 gal vs 500 gal. You save 125 gal/year. $375 / year at $3 gas ==> 3.7k a year. Interesting huh? Crank it to 45mpg and you get about 167 gal / year which saves you 5k over 10 years. There's your Prius making its money back.

Can somone show the Volt's electricity consumption and break that down into cost savings?

RE: Cool
By therealnickdanger on 3/10/2009 2:26:07 PM , Rating: 2
We've played this game before. Search back to some of the older Volt stories and you'll find plenty of breakdowns regarding the total 10yr operating cost of the Volt including battery replacements (which GM will pay for at least one as part of the warranty).

RE: Cool
By A Stoner on 3/10/2009 2:31:59 PM , Rating: 4
I appreciate your feedback. Like your calculations more than mine. I would rate you up, but for some reason i cannot rate anyone after I make a post...

I thought the volt uses 0 Gas, so I used a baseline car MPG estimate of 20MPG and reduced it to 0 for my calculations. But your calculations are far superior to mine. I was trying to give it the best possible outcome for the volt, while still showing the futility of the entire endeavore of trying to show that these hybric/electric cars eventually break even.

The first rule is that in ten years, most of these cars will be in scrap yards, not the highway, as replacing the batteries will cost more than the car is worth.
The second rule is that the people who buy these cars are buying them for the status symbol they represent, and in two years a newer better model will be out, and those people are going to take the lions share of the depreciation of the vehicle as they upgrade.
The third rule is that if something tangible costs alot of money, it is because it required alot of energy to produce it. Either human energy, electric energy, heat energy and something that all of these energies have in common is that they create the "evil global warming culprit" CO2, which is also known as plant food.

None of these cars will ever really break even. The real reason these companies can bring the price down to only a $5,000 premium over any other car is because the government, also known as your hard work stolen in the form of taxes, subsidizes these vehicles to thousasnds if not ten thousands of dollars each in the form of research grants, actual car by car payments or tax breaks for simply building that particular car. On top of that, many of these car companies are losing money on these models for nothing more than the publicity and name recongnition those cars garner them, it is basically a form of advertizing. So, when all is said and done, while the consumer may eventually break even with one of these cars, the cars really never do break even, because of the hidden costs (read energy to build/CO2 produced) of the vehicles that the average consumer will never see.

RE: Cool
By Spivonious on 3/10/2009 3:28:11 PM , Rating: 2
The Volt only uses zero gas for the first 40 miles. After that it charges the batteries with a gasoline generator.

RE: Cool
By Oregonian2 on 3/10/2009 6:24:08 PM , Rating: 2
That's the biggie for those who's commute (and perhaps shopping) distance allows them not to use gasoline at all for most of their driving.

RE: Cool
By usbseawolf2000 on 3/10/2009 9:14:39 PM , Rating: 2
In cold weather, Volt will use gas engine to warm up the battery pack until the pack can discharge enough power.

RE: Cool
By Alexvrb on 3/10/2009 10:49:17 PM , Rating: 2
I was not aware the Volt did this. That's actually really smart, and it wouldn't use much fuel to do so. Very useful for cold climates, and doing so (along with their other methods such as not using the full capacity) should greatly extend the life of the lithium ion battery.

RE: Cool
By sinclaj1 on 3/10/2009 4:41:35 PM , Rating: 3
Actually, you're not saving much (if anything) once you factor in the interest over the life of the loan and the replacement of the car's hybrid battery.

Let's take $20k vs $25k at 7.5% for 60 months, for example. $5k is about the average cost difference between a non-hybrid and a similar hybrid model:

From auto-loan calculator:

$20k @ 7.5% x 60 mos = $24,045
$25k @ 7.5% x 60 mos = $30,056

The interest difference alone is $1k for each $5k difference in price, assuming you can snag a rate that low. The Federal tax credit for hybrids will take out a little, but not much of that. The cost for replacing the battery will add more to it.

I'm not against hybrids. I love the idea and the technology, and I owned one for several years, but I bought it when it was priced UNDER retail with great financing. Only then does it make clear sense. Now with gas prices down under $2 and dealerships scrambling to sell cars, now may be that time again.

Otherwise, it's as simple as paying for a $25k car over a $20k one. The $20k one will simply draw more buyers if it is a solid, dependable, and reasonably fuel efficient car.

RE: Cool
By mmcdonalataocdotgov on 3/11/2009 7:33:14 AM , Rating: 2
What if you actually drive 30K miles per year? That is what I drive. The Hybrid pays for itself in less than 2 years. That is the extra cost of getting the hybrid option over the base car, not paying for the whole car. The hybrid option cost an extra $3K or so.

RE: Cool
By clovell on 3/10/2009 2:33:37 PM , Rating: 3
Don't forget that a Civic starts at $15,550 and gets 36/25.

RE: Cool
By Keeir on 3/10/2009 4:14:08 PM , Rating: 2
I can't argue with End conclusion of your calculations, I think your base assumptions are a bit off...

lets look at the first one

A Volt will cost 40,000 for the same comfort level of a 15,000 Civic/Corrolla/etc. Ahhh... no. Checking US Honda, a 2009 Civic runs you a minimum of 16,000+ and thats completely stripped down. Unless I am misunderstanding the information thats been provided so far on the Volt, the "standard" model is going to be more like a "EX" type Civic with Automatic transmission. This pushes the cost for a true compeditior to 20,000+. (Civics go all the way into the 24,000+ range for the non-SI model).

Additionally the Volt's Li-on battery is covered by a 10 year warrenty. (Which you can believe whatever you want on GM's being able to fulfill that promise)

On this current offering (Honda Insight), the premium is not 5,000 dollars!

Examing the this Honda Insight its pretty comparable to a Civic also in terms of size. The Honda Insight starts at the "LX" trim level. The Insight seems to be only 1,000-2,000 price premium over non-Hybrid Civics "LX" type cars. It also uses Nickel Batteries which have significantly longer life than Li-on. The Insight seems be a slam dunk comparison to a Civic... 2,000 miles, 29MPG->41MPG, Gas=2.50, ---->~80,000 replayment time.

RE: Cool
By retrospooty on 3/10/2009 7:11:38 PM , Rating: 1
On top of all that, you have to automatically assume the Volt will die before the Honda or Toyota. Unless somehow being totally broke gave GM a quality conscience that it didnt have before =)

RE: Cool
By Doormat on 3/10/2009 7:00:05 PM , Rating: 3
I've posted my personal Volt math before, I'm going to post it again....

Volt: $40,000 - $7500 tax credit = $32,500
Civic $16,300 (Auto. 4 door, per honda website), 29mpg combined

Cost of electricity: 12c/kWh
Efficiency of electrical system: 85% (wall socket to battery)
Miles per charge: 40 (8kWh usable battery)
MPG on gasoline: 48 (per tests by the EPA)

My daily commute: 38 mile commute (how convenient ;) )
Yearly mileage: 12,000 - we'll assume 10,000 miles by electricity and 2,000 miles by gasoline (for trips out of town and to start the engine once a week to keep it going...)

Civic yearly consumption (gasoline): 12,000 miles, or 413 gallons
Volt yearly consumption (electricity + gasoline): 10,000 miles or 2,352kWh plus 2,000 miles or 42 gallons of gas

So if gasoline is $2.50/gal and electricity is 12c/kWh (current conditions)..

Civic: $1,032/yr
Volt: $282 + $105 = $387/yr

A difference of $645/yr. You can see that its no where near enough to compensate for the $16,000+ purchase price difference.

Now if you bump up gas prices to $3.50 a gallon it looks better...

Civic: $1,445
Volt: $282 + $147
A difference of $1,016/yr. Closer but still no cigar.

Even at $4.50/gal, its still about $300/yr short.

Civic: $1,858
Volt: $282 + $189 = $471
A difference of $1,387.

Thats not to say people still wont buy Volts. But it will be because they want to be environmentally responsible (make a statement), not because its cheaper.

RE: Cool
By rdeegvainl on 3/11/2009 12:00:13 AM , Rating: 2
another poster brought up the interesting point of interest on the loan. Factor that in to your calculations and you will get an even better picture.

RE: Cool
By Doormat on 3/11/2009 1:15:46 AM , Rating: 2
Yes, this math does ignore finance costs. If I had more free time I could do an NPV calculation on both.

RE: Cool
By bankerdude on 3/11/2009 11:25:54 AM , Rating: 2
If I had more free time I could do an NPV calculation on both.

Ok, I'll take a crack at it. Based upon your calculations of annual costs for each vehicle plus the assumptions posted earlier in the thread of a six year loan at 7.5% (assuming no money down for simplicity) it looks like you will be paying an additional premium of $6,202.50 over the initial cost differential of $16,200 between the two vehicles (assuming the $7,500 tax credit on the Volt).

Here's my calculations:
Finance the Civic - $16,300 @ 7.5% for 72 months = $281.83/mo. This ends up costing $3,991.76 in interest over the life of the loan.
Finance the Volt - $32,500 @ 7.5% for 72 months = $561.93/mo. This ends up costing $7,958.96 in interest over the life of the loan.
The interest savings alone therefore save you (7958.96-3991.76)= $3,967.20.

In addition, you will also be saving money on your monthly payment, to the tune of $280.10/month (561.93-281.83). If you assume this equal stream of 72 monthly payments of $280.10 are invested in a money market account at a constant interest rate of 3% per year, the NPV of that stream = $18,435.30. The NPV calculation is as follows: C/i * [1-{1/(1+i)^n}] or in our example 280.10/.0025 * [1-{1/(1+.0025)^72}].

So, if the NPV of the cash flow stream is $18,435.30; plus the interest savings of $3,967.20; that equals $22,402.50 total additional cost of buying Volt, or a premium of $6,202.50 (22402.50-16200.00) over just the initial purchase price of the vehicles.

Adding the additional cost premium of $6,202.50 to your 10 year cost analysis example equals another $620.25 per year of cost savings necessary just to break even.

RE: Cool
By Steve Guilliot on 3/10/2009 11:58:50 PM , Rating: 2
Your experience with a laptop battery gives you exactly zero anecdotal expertise with Li batteries in cars. These batteries have a 10 year warranty, meaning a very high percentage last at least 10 years, probably much longer given the calculus manufacturers consider before setting warranty coverage of auto components.

This reminds me of that recent Daily Tech story saying that Prius batteries were about to start dying becuase the 10 year warranty on the first Prius' were coming due. Sheer genius. In other news, my car will not start next Monday when the powertrain warranty expires.

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