Tow Vehicle Total Cost of Ownership

[KK4YZ]

Originally Posted by pmclemore

When I'm not pulling my rig with my big honkin truck, I drive to the golf course in it three days a week. About a hundred miles a week that way.

If I buy a sweet little convertible to drive instead, do I have to include that in my total cost of ownership of a diesel truck?

Pat

Nah. Just consider the big smile on your face as dividends from the convertible😀

[DewTheDew]

Originally Posted by BayouBiker

In estimating the total cost of ownership for a new generation electric tow vehicle nearly all of the internet analyses use depreciation schedules, and insurance costs from conventional ICE vehicles despite the clear trend for EVs that are far and away more costly on both fronts. The EV accident repair charges are running quite a bit higher than traditional vehicles and insurance charges reflect that. The Cybertruck's stainless exoskeleton is likely to see this in spades. So in my neighbors analysis he is using the average surcharges for insurance. Twice the insurance cost is not unusual. Depreciation is also nearly double, as another poster mentioned. No reason to suspect this will change in the next few years, however there is a good deal of uncertainty so he used a range for both of these costs. The other big cost when towing is the number of extra intermediate overnights and the campground costs for those. He had 35% more non destination overnight stays in his numbers.

Using expected costs as described based on current experience, the EV as a choice is not a contender costing $27k more than the diesel option. By making some assumptions about changes in insurance and depreciation, they get closer, but the EV experience over the past 10 years does not bode well, so you'll have to throw caution to the wind in choosing an EV until a few more years have transpired.

Makes sense to me. I'd have called someone crazy if they claimed that EVs were cost effective at this moment for towing a large Airstream. They will be, I am sure, but not yet. Though honestly I'd think the depreciation numbers are too hard to estimate given the rapid changes. Heck, Tesla has only been building cars for just over a decade so how do you realistically consider depreciation on a new one? Not enough data. The source of charging will vary hugely as well.

[vanster]

All the big manufactures will have EV trucks on the road in the next few years. Rivian is interesting as well. Our local UPS hub has a few EV delivery trucks. This is happening and the cost of batteries is dropping every year and charging is getting better. If boon docking and using a small Honda generator, I wonder how it would pair with an EV charge?

[jcl]

Originally Posted by BayouBiker

In estimating the total cost of ownership for a new generation electric tow vehicle nearly all of the internet analyses use depreciation schedules, and insurance costs from conventional ICE vehicles despite the clear trend for EVs that are far and away more costly on both fronts. The EV accident repair charges are running quite a bit higher than traditional vehicles and insurance charges reflect that. The Cybertruck's stainless exoskeleton is likely to see this in spades. So in my neighbors analysis he is using the average surcharges for insurance. Twice the insurance cost is not unusual. Depreciation is also nearly double, as another poster mentioned. No reason to suspect this will change in the next few years, however there is a good deal of uncertainty so he used a range for both of these costs. The other big cost when towing is the number of extra intermediate overnights and the campground costs for those. He had 35% more non destination overnight stays in his numbers.

Using expected costs as described based on current experience, the EV as a choice is not a contender costing $27k more than the diesel option. By making some assumptions about changes in insurance and depreciation, they get closer, but the EV experience over the past 10 years does not bode well, so you'll have to throw caution to the wind in choosing an EV until a few more years have transpired.

I found it interesting that the analysis including camping fees. Presumably, the goal is to go camping. The two vehicle types don't change the number of camping days. They may change how far afield one travels. If camping fees are an expense to be avoided, wouldn't the ultimate solution be to just stay home?

We need to keep clear the distinction between current EVs and future EVs, which may include EVs capable of towing larger Airstream trailers.

Given that the product hasn't been released yet, by any manufacturer, I think that any analysis of TCO for a BEV tow vehicle is too uncertain today to be of much value. Once there is a product that is commercially available, then the analysis risk will focus more on the repair cost and the resale value, the rest will be much more certain.

But we can learn from the history of EVs that are available, eg the current experience. Keep in mind that the BEVs being reported on are early generation, and not necessarily representative of current offerings, with respect to range, etc. But it is all we have as a cost basis. These comparisons are for a variety of vehicle classes, excluding pickups. Small cars, medium cars, SUVs, etc. And some of us prefer to tow with SUVs or cars, so there is that. Then we can decide to what extent those analysis methods and data trends should be applied to a future BEV truck which is capable of towing a larger Airstream.

One of the better analysis reports that I saw was Consumer Reports. It doesn't concur with many of Brian's statements, in particular, re depreciation, and insurance. The report has lots of details on how they calculated costs. An example of this is that they estimated the % of charging at home, vs % of charging on long trips, and this could be varied for a potential BEV tow vehicle.

Full report here: https://advocacy.consumerreports.org...l-Report-1.pdf

Some key takeaways from that report:

While electric vehicles (EVs) typically have higher upfront purchase prices, they can save consumers a lot on operating expenses. This study relies on new data on electric vehicle depreciation rates and maintenance and repair costs, along with real world average vehicle prices, to estimate how much today’s most popular EVs can save consumers when compared with similar ICE vehicles.

Overall, BEVs were estimated to save consumers about 60 percent on fuel costs compared with the average vehicle in their class. Fuel costs were also analyzed by state, with the majority of states falling within 10 percent of the national average.

For all EVs analyzed, the lifetime ownership costs were many thousands of dollars lower than all comparable ICE vehicles’ costs, with most EVs offering savings of between $6,000 and $10,000. While new EVs were found to offer significant cost savings over comparable ICE vehicles, the cost savings of 5- to 7-year-old used EVs was found to be two or three times larger on a percentage savings basis.

Overall, these results show that the latest generation of mainstream EVs typically cost less to own than similar gas-powered vehicles, a new development in the automotive marketplace with serious potential consumer benefits.

I think the sales trends for the currently available BEVs support them having a lower TCO. We just need to wait to see a BEV tow vehicle with more range, and confirm that the savings currently being calculated apply to that type of BEV as well.

[Prettygood]

Originally Posted by vanster

My VW TDI gets about 17mpg around town (which I don't do much of with it) Towing my 17 ft Caravel I get about 16mpg. Oil changes are about $250 . It just lumbers along. I have about 150k on the clock and when it's time to replace it or rebuild it I will strongly consider an EV. Torque is everything

V10 Tuareg??

[BayouBiker]

I see the Consumer Reports analysis relies on inclusion of tax incentives and proprietary algorithms applied over the ownership period to bring depreciation schedules into line. Real year over year depreciation is a more realistic method. Forcing your neighbor to pay for your vehicle purchase does not change real TCO. The fact that someone else is taking a hit and contributing to TCO does make it a non-cost.

Another clever approach Consumer Reports used to get the results they obtained was in what they decided not to include in their TCO analysis.

"This analysis focuses on model year 2020 and 2021 BEVs and PHEVs. It brings together depreciation, financing, fuel, and repair and maintenance costs, and compares them with similar ICE vehicles. It does not include other vehicle ownership costs, such as sales or property taxes, registration fees, and insurance."

Edit: My neighbor reasoned that while camping, the purpose was the destinations and places of interest. A quick overnight stay as an intermediate imposed on him due to journey fatigue did not fit the goal and should be considered an inconvenience.

[jcl]

Originally Posted by BayouBiker

I see the Consumer Reports analysis relies on inclusion of tax incentives and proprietary algorithms applied over the ownership period to bring depreciation schedules into line. Real year over year depreciation is a more realistic method. Forcing your neighbor to pay for your vehicle purchase does not change real TCO. The fact that someone else is taking a hit and contributing to TCO does make it a non-cost.

Another clever approach Consumer Reports used to get the results they obtained was in what they decided not to include in their TCO analysis.

"This analysis focuses on model year 2020 and 2021 BEVs and PHEVs. It brings together depreciation, financing, fuel, and repair and maintenance costs, and compares them with similar ICE vehicles. It does not include other vehicle ownership costs, such as sales or property taxes, registration fees, and insurance."

Edit: My neighbor reasoned that while camping, the purpose was the destinations and places of interest. A quick overnight stay as an intermediate imposed on him due to journey fatigue did not fit the goal and should be considered an inconvenience.

I think various incentives should be included if they in fact exist. Given that more incentives are regularly being announced, including in the US, ignoring them seems somewhat blind. One could always turn a rebate down if it offended one's principles. But to not include them would be like using what one thought should be the price of something, instead of what the price actually was. Unrealistic IMO.

And of course, some of us live in places that don't have those same incentives. I received no incentive on my BEV due to the purchase price cap for the incentives here. I chose not to purchase a lower cost vehicle that would have had a significant incentive applied.

My error on insurance rates. I have multiple TCO analysis reports open. For reference, I didn't see an increase in my insurance rate with a BEV over the previous ICE vehicles I had (same vehicle class) The vehicle value changed, the vehicle safety features (and available insurance premium credits for those features) changed, the net didn't.

If your neighbour doesn't value the stays along the way, that is certainly their prerogative to consider those as an inconvenience. Personally, I travel for the trip, not the destination. I find lots of places of interest along the way. If it was only about the destination, I would be more likely to use a vacation home instead of a travel trailer. YMMV.

[BayouBiker]

Originally Posted by jcl

I think various incentives should be included if they in fact exist. Given that more incentives are regularly being announced, including in the US, ignoring them seems somewhat blind. One could always turn a rebate down if it offended one's principles. But to not include them would be like using what one thought should be the price of something, instead of what the price actually was. Unrealistic IMO.

I don't suggest ignoring subsidies in making decisions. But they don't reduce the total cost of a good or service. They only change who pays that cost. Thus in calculating "Total Cost" it is an error to remove part of the cost. To call them a rebate is also misleading as a rebate is a reduction in the price of a good. A subsidy is a shift in who pays the cost. The actual price is the total cost not the actual price minus the subsidy. It is unrealistic to describe a subsidy as a cost savings, it is a cost shift to your neighbor.

If your neighbour doesn't value the stays along the way, that is certainly their prerogative to consider those as an inconvenience. Personally, I travel for the trip, not the destination. I find lots of places of interest along the way. If it was only about the destination, I would be more likely to use a vacation home instead of a travel trailer. YMMV.

The extra stays are a direct result and consequence of the vehicle choice. It is part of the cost of owning and using that vehicle. If you find a non-monetary value to justify the cost, it goes in the derived value column but you don't subtract it from the cost column. Very similar to how subsidies are properly treated. No change in total cost but a bonus for people who don't mind that their neighbors are forced to pay for part of their purchase.

[jcl]

Originally Posted by BayouBiker

I don't suggest ignoring subsidies in making decisions. But they don't reduce the total cost of a good or service. They only change who pays that cost. Thus in calculating "Total Cost" it is an error to remove part of the cost. To call them a rebate is also misleading as a rebate is a reduction in the price of a good. A subsidy is a shift in who pays the cost. The actual price is the total cost not the actual price minus the subsidy. It is unrealistic to describe a subsidy as a cost savings, it is a cost shift to your neighbor.

I used the broad term "incentives" IIRC. The programs we are referring to reduce the price to the consumer. The analysis in this thread title is about the tow vehicle cost of ownership, and it seems obvious to me that we are talking about the cost to the owner. Thus any effective price reduction is relevant, however it comes about, if the owner doing the calculation benefits from it.

If I follow your argument, you would prefer that any discussion of vehicle purchase not include any discounts offered by dealers, manufacturers, or whatever, because they don't reduce the original price, just the purchase price. You could go to all those threads asking about discounts from MSRP and point out that they aren't really discounts. The manufacturer or dealer is paying them, so that appears to be a shift of the burden to your neighbour.

If you want to talk about societal costs, not individual costs, then perhaps you should start a new thread. We could include all the externalities that aren't currently priced into many vehicle purchase decisions. I suspect it would get political very quickly.

[BayouBiker]

I began the thread and used the term "Total Cost of Ownership" and I can tell you I meant all of the costs, not just the part of the cost the consumer pays. Again value derived by consumers who enjoy burdening their friends and neighbors with part of their purchase cost goes in the derived value column.

Discounts offered by the dealer go into the final agreed price and is included in the TCO analysis as part of the formula for determining average price paid. So unlike subsidies, they will figure into the total cost of ownership. There is no intrinsic value involved in the discount, nothing of net value changes hands as a result of the discount. With subsidies monetary transfers occur, and that is one way to determine if something truly fits being called a subsidy. The formula is pretty easy and is all covered in Economics 101. I find your mental gymnastics cute how you suggest a discount or sale price is somehow forced on your neighbor like a tax.

I'm not interested in delineating and assigning costs to various parties, I am interested in "Total Cost" as the title indicates.

Edit: I would be happy to include costs of "externalities" if they are real, but be prepared because that is a two way street.

[DewTheDew]

Originally Posted by BayouBiker

I began the thread and used the term "Total Cost of Ownership" and I can tell you I meant all of the costs, not just the part of the cost the consumer pays. Again value derived by consumers who enjoy burdening their friends and neighbors with part of their purchase cost goes in the derived value column.

Discounts offered by the dealer go into the final agreed price and is included in the TCO analysis as part of the formula for determining average price paid. So unlike subsidies, they will figure into the total cost of ownership. There is no intrinsic value involved in the discount, nothing of net value changes hands as a result of the discount. With subsidies monetary transfers occur, and that is one way to determine if something truly fits being called a subsidy. The formula is pretty easy and is all covered in Economics 101. I find your mental gymnastics cute how you suggest a discount or sale price is somehow forced on your neighbor like a tax.

I'm not interested in delineating and assigning costs to various parties, I am interested in "Total Cost" as the title indicates.

Edit: I would be happy to include costs of "externalities" if they are real, but be prepared because that is a two way street.

don't forget the cost of global warming and health concerns from pollution for ICE vehicles, of course. And the tax incentives for oil exploration and other fossil fuel incentives. That's why it doesn't make sense to include all of this; because it is so difficult to put a number on. If you drive a more fuel efficient vehicle and few miles than your neighbor, then they are paying for your roads as well. It just seems like an unnecessary rabbit hole because the numbers are so vague.

[jcl]

Originally Posted by BayouBiker

I began the thread and used the term "Total Cost of Ownership" and I can tell you I meant all of the costs, not just the part of the cost the consumer pays. Again value derived by consumers who enjoy burdening their friends and neighbors with part of their purchase cost goes in the derived value column.

If the cost of ownership you referred to isn't about the cost born by the owner, then I suggest the thread has little value. It appears to be a way to have a political/economic discussion without using the word politics.

Also wondering why, in your original post in this thread, you referred to "his costs" for your neighbour, when you didn't mean just his.

[DewTheDew]

Originally Posted by jcl

If the cost of ownership you referred to isn't about the cost born by the owner, then I suggest the thread has little value. It appears to be a way to have a political/economic discussion without using the word politics.

Also wondering why, in your original post in this thread, you referred to "his costs" for your neighbour, when you didn't mean just his.

I agree. Especially if you are adding "inconvenience fees" because you camp at a place that is not your final destination.

[BayouBiker]

Originally Posted by jcl

If the cost of ownership you referred to isn't about the cost born by the owner, then I suggest the thread has little value. It appears to be a way to have a political/economic discussion without using the word politics.

Also wondering why, in your original post in this thread, you referred to "his costs" for your neighbour, when you didn't mean just his.

Total cost is one piece of the puzzle, and so is derived value. Value though is much more subjective and individual so I won't attempt it. I don't begrudge anyone for how they derive their value drivers and they will be in a good spot to compare total cost to derived value for each option. if they are willing to choose an option with a $25k premium because they get $50k more derived value from that option, great! This analysis helped make their decision more objective.

Several posters have commented that the only thing that matters is the value side, and quit worrying about the cost side. I don't subscribe to that idea as I think everything is important.

The value or utility of this thread is also described in the original post which is to address the common perception that diesel vehicles are more costly, to discuss the peer reviewed papers that concluded diesel vehicles have a lower total lifecycle cost, and relate it to towing using my neighbors example. I did not insert any political components in the threads purpose.

I believe I used the term his costs since the example fit his specific analysis which was not intended by him to fit the general case.

[BayouBiker]

Originally Posted by DewTheDew

don't forget the cost of global warming and health concerns from pollution for ICE vehicles, of course. And the tax incentives for oil exploration and other fossil fuel incentives. That's why it doesn't make sense to include all of this; because it is so difficult to put a number on. If you drive a more fuel efficient vehicle and few miles than your neighbor, then they are paying for your roads as well. It just seems like an unnecessary rabbit hole because the numbers are so vague.

Fictitious numbers are very hard to derive, but if they are real, then they are less challenging. I'd be happy to include any real numbers that contribute to the total cost. Suggest the item and we can talk about if it is a real cost and what that cost is.

edit: as I suggested to jcl, if you find value in making additional intermediate overnight stays you can figure the value you get for those stays and drop them in your value column.

[jcl]

Originally Posted by BayouBiker

I believe I used the term his costs since the example fit his specific analysis which was not intended by him to fit the general case.

Great, so his costs, not John Doe's costs. Got it.

That is where we started in this thread.

You now say you want to include all costs, not just those that your neighbour that you provided the example of, pays. Is that identified in the original post? What does it even mean?

Is this an example of what you have previously termed "moving the goal posts?"

[BayouBiker]

Since the original intent is intact even though one can pretend to not understand, moving the goalpost would not apply. For the literalist, I suppose I should have said "for his specific situation". I guess I owe you some gratitude for helping me with my english lessons, so thanks for that.

Did you have any additional cost items I might suggest he add?

[jcl]

Originally Posted by BayouBiker

Did you have any additional cost items I might suggest he add?

No, because given the specific way in which you and he are addressing costs, I see little utility in the calculation for myself, or others. Post #72.

[BayouBiker]

It can be bitter to have to include all costs, including the ones you don't want to include in a "Total Cost" analysis so I can understand your loss of interest.

[jcl]

Originally Posted by BayouBiker

It can be bitter to have to include all costs, including the ones you don't want to include in a "Total Cost" analysis so I can understand your loss of interest.

It is not at all bitter, I am not clear why you would conclude that.

My lack of interest in helping you answer your original question re why this analysis didn’t match up to conventional wisdom, is because we can’t comment on the analysis. You won’t show it to us. How many miles per year, things like that, all the base assumptions. We learned things along the way, as you disclosed some details, such as the neighbour ignoring manufacturers oil change intervals to close the maintenance cost gap for the diesel; that overnight stops are a cost when camping and not the purpose of the trip; and that all costs are being considered, not just those borne by the owner directly. Also, apparently some total costs elements are fictitious, but we don’t know which ones those are. We don’t know what other items you and he included that aren't based on generally accepted principles for such analysis.

This all leads to the conclusion that there is little value for the community in proving out this analysis. It is unlikely to be of benefit others.

And that is even before we get to a full cost analysis, including things like particulate emissions and deaths attributed to that. See the latest Harvard study. It reported deaths, so you will have to assign a value to life for your various options.