The obvious issue related to the math mistake regarding the long-term costs of hybrid-powered vehicles made of Consumer Reports involves the popular magazine's credibility. If the engineers and editors at CR can't correctly do the kind of math problem that public school kids can handle, why should we be paying attention to their judgments on what vehicles we should buy?
This of course follows a demonstration of bias for cars with Japanese badges that should make the Consumer Reports people blush (or at least question their motives), but doesn't. Using mostly subjective judgments from a small group of people, the magazine decided that its top-10 picks should all be from four Japanese car companies. They're so deluded on this subject that they think people believe them to be anti-American when they claim bias, when in fact the bias is really a pre-disposition for Japanese brands so strong that it precludes rational thought.
Consider that CR named the Toyota Highlander Hybrid the best big-ticket SUV when they thought it was going to cost its owners about $16,000 more to operate over five years than a gas-powered Highlander, and that the Toyota Prius was the best "green" car when it was going to cost an extra $5,900 to operate over the same period. Honda's Ridgeline the magazine deems to be the best pickup, even though it's so narrowly focused it could only be of value to a small part of the pickup market, and is selling less than expected because even the members of that narrow market don't like it that much.
To put it directly, the people at CR have thought Japanese vehicles to be superior for so long they aren't capable of accepting new realities that oppose their prejudices.
But the bigger issue involves the tendency of some folks (like CR) to make projections about a vehicle's future resale value sound like solid scientific fact, when they are in fact largely biased and subjective guesswork.
It turns out that the folks at CR looked at some cost analyses on hybrid and non-hybrid vehicles done by a Detroit firm and did some math that completely misrepresented the results. I challenge you to go to the study on www.vincentric.com's home page and try to figure out how CR could have come up with the original results for "extra depreciation cost" it published in its Annual Auto Issue, but have since dropped from its website without comment. The new results are available at www.consumerreports.com.
The Vincentric study makes the case that's been obvious about hybrids from the start to anyone with basic math skills -- that they cost more to own and operate than non-hybrids, so if you're thinking about buying a hybrid to save money you're making a huge mistake. Not as huge a mistake as CR first claimed, but big enough to make the smart person reconsider buying a hybrid unless all they're interested in is using slightly less gasoline. If saving fuel were genuinely a concern, however, they wouldn't be buying something like the Toyota Highlander SUV (which carries the largest extra cost burden of any hybrid) with any powerplant.
But it's not the creative math of Consumer Reports that's really important in this case. The bigger issue is the creative math of Vincentric and other firms that claim the ability to guess correctly at what the resale value of a vehicle will be in the future, which they call the "depreciation cost."
Sure, there is a certain amount of empirical data involved with forecasting resale costs, but a lot of it's guesswork. This has rarely been more obvious than it is in the estimated values of today's hybrids in five years. Vincentric and Consumer Reports claim that today's hybrids will be worth more (by about three percent) than their non-hybrid siblings in 2011, but my guess is they're wrong.
Hybrid sales are slowing, largely because the trendoid buyers have already bought theirs, and the more rational people are saying no to hybrids because of their extra costs and their inability to deliver significantly better fuel economy.
At the same time, newer hybrids will cost less, as GM's Saturn Vue Greenline proves, and future prices are expected to get even lower.
On top of that, hybrid technology is improving all the time, so that today's hybrids will look decidedly antiquated in five years, and it will be hard to find parts and technicians who know how to service them. All of this suggests that hybrids will be worth less than their non-hybrid siblings on the used car market by the end of the decade.
Ironically, this probably means that Consumer Reports higher estimates for extra costs for hybrid vehicles will probably prove to be right in the end.
This of course follows a demonstration of bias for cars with Japanese badges that should make the Consumer Reports people blush (or at least question their motives), but doesn't. Using mostly subjective judgments from a small group of people, the magazine decided that its top-10 picks should all be from four Japanese car companies. They're so deluded on this subject that they think people believe them to be anti-American when they claim bias, when in fact the bias is really a pre-disposition for Japanese brands so strong that it precludes rational thought.
Consider that CR named the Toyota Highlander Hybrid the best big-ticket SUV when they thought it was going to cost its owners about $16,000 more to operate over five years than a gas-powered Highlander, and that the Toyota Prius was the best "green" car when it was going to cost an extra $5,900 to operate over the same period. Honda's Ridgeline the magazine deems to be the best pickup, even though it's so narrowly focused it could only be of value to a small part of the pickup market, and is selling less than expected because even the members of that narrow market don't like it that much.
To put it directly, the people at CR have thought Japanese vehicles to be superior for so long they aren't capable of accepting new realities that oppose their prejudices.
But the bigger issue involves the tendency of some folks (like CR) to make projections about a vehicle's future resale value sound like solid scientific fact, when they are in fact largely biased and subjective guesswork.
It turns out that the folks at CR looked at some cost analyses on hybrid and non-hybrid vehicles done by a Detroit firm and did some math that completely misrepresented the results. I challenge you to go to the study on www.vincentric.com's home page and try to figure out how CR could have come up with the original results for "extra depreciation cost" it published in its Annual Auto Issue, but have since dropped from its website without comment. The new results are available at www.consumerreports.com.
The Vincentric study makes the case that's been obvious about hybrids from the start to anyone with basic math skills -- that they cost more to own and operate than non-hybrids, so if you're thinking about buying a hybrid to save money you're making a huge mistake. Not as huge a mistake as CR first claimed, but big enough to make the smart person reconsider buying a hybrid unless all they're interested in is using slightly less gasoline. If saving fuel were genuinely a concern, however, they wouldn't be buying something like the Toyota Highlander SUV (which carries the largest extra cost burden of any hybrid) with any powerplant.
But it's not the creative math of Consumer Reports that's really important in this case. The bigger issue is the creative math of Vincentric and other firms that claim the ability to guess correctly at what the resale value of a vehicle will be in the future, which they call the "depreciation cost."
Sure, there is a certain amount of empirical data involved with forecasting resale costs, but a lot of it's guesswork. This has rarely been more obvious than it is in the estimated values of today's hybrids in five years. Vincentric and Consumer Reports claim that today's hybrids will be worth more (by about three percent) than their non-hybrid siblings in 2011, but my guess is they're wrong.
Hybrid sales are slowing, largely because the trendoid buyers have already bought theirs, and the more rational people are saying no to hybrids because of their extra costs and their inability to deliver significantly better fuel economy.
At the same time, newer hybrids will cost less, as GM's Saturn Vue Greenline proves, and future prices are expected to get even lower.
On top of that, hybrid technology is improving all the time, so that today's hybrids will look decidedly antiquated in five years, and it will be hard to find parts and technicians who know how to service them. All of this suggests that hybrids will be worth less than their non-hybrid siblings on the used car market by the end of the decade.
Ironically, this probably means that Consumer Reports higher estimates for extra costs for hybrid vehicles will probably prove to be right in the end.