Is it Time to Buy a Car Yet?

I have always wondered when it is economical for me to buy a new car. With the internet and home computers, I can do far more research and calculations than my father or grandfather were able to do at my age. The car that I currently drive is 15 years old. Technology has improved over the last 15 years and with gas prices at all time highs I thought it would be beneficial to put together a spreadsheet and determine what made sense dollar wise.

An engineer's favorite tool is the spreadsheet. It is not as elegant as a custom designed program, but can be created a lot quicker. I have made spreadsheets for everything, including finding out which insurance plan my company was offering would be the least expensive. So to start out my spreadsheet I needed to have an idea of what I was going to compare.

My baseline would be my current car. A 93 Dodge Intrepid. It is all paid for, and gets about 20 mpg. I drive it to work and not much else so I only put about 5000 miles on it a year now. However, to make it more conservative (since all of the newer models get higher gas mileage) I chose to use 9000 miles per year as my baseline.

Next I needed to choose what car to buy. While I could always look for the smallest car available and make the comparison uneven, I chose the Honda Civic. It is a smaller than the Intrepid, but works for my needs without being a spit dropping on the road. I selected 3 options from Edmunds.com: a 01 Honda Civic EX ($8600, 29MPG), a 08 Honda Civic EX ($18000, 31MPG) and a 08 Honda Civic Hybrid ($22,600, 43MPG).

I also decided to do a hypothetical analysis with the Chevy Volt. I assumed that it would cost $30000 and get 150 MPG equivalent (this is based on charging the car at night rather than running on the engine/generator in the car). I have not been much of a fan of hybrid cars because the initial cost outweighs the marginal increase in MPG. However, the Volt is configured more like a locomotive. The engine only operates the generator (thus allowing peak efficiency) to charge the batteries, which in turn provide power to the electric motors that run the wheels. Running just the engine (and not plugging it in) would equate to 50 MPG.

Several costs and variables go into the calculation, so I'll detail those here.

Cost of gas: This is a variable that can change pretty unpredictably. I used $3.50 constant for the entire 15 year analysis. Some may argue that this is too low. However, historically, this may be too high (just 10 years ago in 1998 I bought gas for 68 cents in Missouri). Gas is anywhere from 7% (Chevy Volt) to 35% (93 Dodge Intrepid) of the total cost of the vehicle. In the end, the price you predict for gas 5, 10, or 15 years from now is just a guess.

Financing rate: More than likely you are going to have some interest rate on your financing. The 0% gimmicks usually don't apply to used cars or cars that are in demand. I chose 5% over a 5 year loan. This might be a stretch for a used car, but should be reasonable for a new car.

Credit Card Interest rate: If you are someone who charges everything and then lets it sit on the card, you are paying interest on it. One way of figuring this is if you pay off something over two years, then the effective interest rate is the rate on your card (17%). Myself, I may charge it but I pay my bill each month so my interest rate is 0%.

Down payment: This is how much you pay up front.

Resale value: I assumed that the new car was worth 60% after 5 years, the hybrid and volt were 65% after 5 years and the used car was 50% after 5 years. I have seen some info that hybrids are maintaining their value better than comparable gas only cars. For the 10 year and 15 year I used 50% and 15% of their 5 year resale value for all cars.

Maintenance Costs: This is another guesstimate although there is a lot of data available on Edmunds.com that you could use. A couple of things to keep in mind. As cars age, they require more maintenance. Also, maintenance costs go up with inflation each year. My current car I started at $1500 a year and increased it by $300 a year until it was at $3200 and then kept it level (at that point I would buy a new car anyway). The used Honda I started at $1000 and increased it by $250 a year until it was at $3200. For the new cars, I started them at $350 and increased it by $50 a year for the first 5 years. Then I jumped to $1000 and increased by $250 a year until it reached $3200.

Insurance/Taxes/Other: I elected not to include these because they don't contribute a significant percentage to the overall cost and they vary little between the vehicles in my area.

Inflation: Any cost analysis over time needs to normalize the numbers for inflation or they aren't comparing the same thing. In other words, a $1000 outlay now is more than a $1000 outlay 10 years from now ($1000 vs $737 at 3% inflation). I used a constant 3% inflation in my calculation.

After all of this, I assumed that I sold the car after 5 , 10, or 15 years and calculated the cost in comparison to my current vehicle. The table below is the results of the total 2008 dollars spent and the ratio with the current vehicle.

	93 Dodge Intrepid	01 Honda Civic EX	08 Honda Civic EX	08 Honda Civic Hybrid	Chevy Volt
Total Present Cost After Resale -5 Year	$17,231	$17,856	$17,276	$17,579	$18,869
	1.00	1.04	1.00	1.02	1.06
Total Present Cost After Resale -10 Year	$36,107	$35,091	$31,790	$32,838	$34,435
	1.00	0.97	0.88	0.91	0.98
Total Present Cost After Resale -15 Year	$52,273	$49,434	$47,020	$48,150	$49,304
	1.00	0.95	0.90	0.92	1.00

I found the results rather interesting. For my situation, keeping my current car running over the next 5 years is the cheapest option (but only by 4% max -- the Volt isn't available for me to buy). This was what I suspected, although the minor cost difference was unexpected, I was estimating more like 10%.

Over the long run, buying the new gasoline Honda Civic is cheapest. Again, not by much though. This was unexpected, my previous thoughts were that the used car would be less expensive.

Finally, one last conclusion from this data is that cost ratio peaks at around 10 years for new cars. So it appears that it is advantageous to buy a new car every ten years. Unless I overestimated the maintenance expenses for the used cars. A couple of years with much lower expenses and the difference disappears.

For the Hybrid to be the least cost, all other assumptions staying the same. I would have to be driving 15000 miles or more a year. For the Volt to be the cheapest, it would have to have a price of $26000 or less. So, what I decided from this is I will probably keep my old car running for another few years and then buy a new (or nearly new) gasoline car. By that time the Volt should be on the market and I can analyze it better for its overall value.

The Andromeda Strain (2008) Review

I watched the A&E remake of the Andromeda Strain the last two nights. At the end of the first night, I was actually excited that they would stay true (mostly) to the book and just have an updated version of the novel. By a half hour into the second night, I knew that I was going to be sorely disappointed. Once the "solution" was found and delivered, I was about to start wretching in my throat.

The first thing that caught my wife's attention was "Why do they always have hot scientists?" Well, Hollywood seems to believe that if you don't have sex in the movie then no one will watch it. I'll admit, the eye candy is nice, but in this movie completely unnecessary. To begin, the book had all of the major characters as male (related to the odd-man hypothesis). The 1971 version threw in a female, but she was frumpy so might as well have been a male. Next, I am amazed that Hollywood seems to portray all world reknowned scientists as 30 something. Let's be honest. We have had some young geniuses (Einstein was well known in his 20s). However, there are a lot more old scientists that would be better choices academically to study in the underground laboratory.

The cocaine snorting reporter confused me. I guess it was a plot choice to introduce some conflict. However, if we aren't going to allow smoking cigarettes in movies (or make the R), then why bother showing him snorting cocaine or the hippie girl smoking pot. It added nothing to the storyline, and only made a minor appearance that ended up not being a conflict at all (the Colonel was going to kill him no matter what). And how does an unarmed, handcuffed, druggie (who isn't currently high) overwhelm a fully armed, battle dressed (including kevlar helmet) soldier just by letting off the fire extinguisher and then hitting him a couple of times. Has someone done any experiments on stomping on the valve of a fire extinguisher and it coming off? I don't think it would happen from the first stomp (especially given his limited range of motion).

Hollywood is in love with nuclear reactors (even though they want to shut them all down). The computer diagrams of the laboratory showed the reactor offset from the main maintenance shaft of the compound. However, at the end when they entered the maintenance shaft, it sure looked like the familiar blue glow of irradiated fuel to me. Unfortunately, they don't go into a lot of details as to the workings of their reactor. They do say it will give you a dose of 5000-8000 rem (I think they mean dose rate 5000-8000 rem/hr). But they don't say at what distance this is. When the two people fall in they are dead within 5 minutes. Given that the lethal dose of 1000 rem will still take 24 -72 hours to kill you. We'll assume that they recieved a dose 10 times that in 5 minutes. That is approximately 100,000 rem/hr dose rate at the top of the cooling pool. Assuming Dr. Stone is 30 ft up, his dose rate would be 1000 rem/hr. So he probably got 100 rem for all the time he spent in the shaft. More than likely, that would put him in the hospital for a few days. I sure hope that all of the equipment has been radiation hardened, or we have some electronics primed for malfunction.

But, if we look closely, we could see that the water in the pool was bubbling. So maybe the people got cooked rather than dying of radiation. This then begs the question of how someone could stand in a boiling pool of water and not have a natural reaction to flinch. Of course if the pool was boiling, then the entire maintenance shaft would be filled with steam, and moisture would be condensing on all of the components, which eventually would reach 200 degrees fahrenheit and you wouldn't be able to grab on to anything. To say nothing of what your lungs would look like after breathing steam saturated air at 200 degrees.

How the reactor produces power is a mystery. Typically a boiling water reactor or a pressurized water reactor are at a much higher pressure than atmosphere (1000 psi-2000 psi vs 14 psi). Since the reactor appears to be at the bottom of a pool it is probably more similar to a research reactor that is found at many universities. Unfortunately, these tend to be a lot smaller (0.5 - 2 MW thermal) compared to a naval or power reactor (200 - 4500 MW thermal). Oh yeah, and they don't produce electricity. My guess, since they never talked about generators or steam turbines is that it is using thermovoltaics (like solar cells, except they convert heat into electricity). The problem with this is that since the reactor isn't pressurized, its not going to have a high temperature, therefore, the efficiency of the system will be extremely low. Also, since thermovoltaics involve high temperatures, we have to magically assume we have found a low temperature thermovoltaic material.

All of this is completely unneccessary as Crichton gave a perfectly good scenario for the odd-man (who doesn't need to die) climbing up the shaft which is guarded by dart guns (to get escaped animals). The woozy odd-man (having been hit with multiple darts) makes his way to the terminal and stops the detonation before passing out.

Finally, after all the Greenpeace propoganda, bashing of the oil industry, and moral dilemmas of the President we find the solution. A bacteria that lives in the thermal vents of the ocean floor and feeds on sulfur (which is the base component of Andromeda). Where do we begin to pick this apart?

First, the premise is that civilization has killed off this bacteria in the future because of our rape of natural resources on the ocean floor. Therefore, there is no cure for Andromeda in the future. (The Law of Unintended Consequences). They send Andromeda back to us through a worm hole with the clue to killing it (how they figured out how to kill it without the bacteria is unknown). The scientists do ask the question of what affect this bacteria would have on humans. The answer: none that we have found. Based on this we are going to pump thousands of gallons of an organism that lives on the ocean floor onto the surface of the earth. Isn't that the same short sighted thinking that supposedly got our civilization into this mess in the future to begin with. Did anyone bother to think about the onion crop (yes, sulfur is found in the foods we eat), how the bacteria might disrupt it (flavorless balls of skin), and the implications to the larger society (no more tex-mex, riots at Taco Bell)?

Personnally, I like Crichton's solution much better: We don't find out where it comes from and it naturally floats back up to the upper atmosphere, having mutated into a benign form (for now). I know it doesn't wrap up all of the loose ends, and we don't look like heroes at the end, but guess what. Sometimes we don't find the answer, no matter how much money (and hot scientists) we throw at things. The good thing about Crichton's ending is that we could have another encounter with Andromeda again (i.e. more money at the box office).

Second, the dispersion of the bacteria. It is grown in some big biologic reactors (beer making machines) and then pumped into some helicopters for dispersal. This is going to be fun. I wanted to calculate how much stuff they would need. To begin, the area they were spraying had to be large (the red andromeda was shown moving at a fairly good clip at the end). I made a conservative estimate of 50 miles by 50 miles (the town where the sheriff killed himself was 40 miles outside of the quarantine area). This gives a total area of 6.4 billion sq meters. I estimated coverage at 1 liter per 1000 sq meters (that is the equivalent of 2 drops per sq foot). This means they need 6.4 million liters. Assuming each tank was 50000 liters, they would need 128 of them (more than what was portrayed in the movie, but doable).

I assumed the helicopters to disperse the bacteria were Hueys. They have a payload capacity of 2000 kg (or 2000 liters). According to the movie, they were able to disperse all of this within 5 hours. A total of 3200 trips would be needed to disperse the 6.4 million gallons. If I assume that each trip takes 30 minutes, then 400 helicopters would be needed. I highly doubt that the US has 400 Hueys equipped with crop dusters.

If we change the numbers to be more realistic, the results become laughable. At 100 x 100 sq miles area, 4 drops per sq foot, 20 helicopters available, and 60 minutes a trip, they would need 1500+ biologic reactors and 106 days to cover everything. By that time, andromeda would have spread around the world and annihilated everything. Its a good thing Hollywood can bend the rules at will.

Mormons and Evangelicals

Block voting has interested me a lot this election season. Particularly of interest is Romney’s support from Mormons (historically, an extremely conservative voting bloc) and Huckabee’s support of Evangelicals (historically, a relatively conservative voting bloc). In order to do a theoretical analysis, I used data from two sources.

First, for historical election and 2008 primary voting data I used Dave Leip’s Atlas of U.S. Presidential Elections at http://www.uselectionatlas.org/. This website is great in giving enormous amounts of data about past and current elections.

Second, for the religious data I used numbers from the Association of Religious Data Archive at http://www.thearda.com/. An issue does arise in looking at these two blocks of voters. Namely, Mormons are a well defined religious denomination. There is very little debate about who is a Mormon. Evangelicals on the other hand are not a defined religious denomination but a subset of Christianity that includes members of several denominations (although not necessarily entire denominations). Therefore defining who is an Evangelical poses a problem. The ARDA takes a denominational approach.

I wanted to determine answers to a few questions. 1) What are the voting habits of the block in comparison to the rest of the population? 2) What influence does the block have on the outcome of the election? 3) Was Romney’s support primarily because of the Mormon factor?

To begin I chose one heavily Mormon state (Utah – 66.45%) and two Evangelical states (Alabama – 40.59% and Oklahoma – 41.49%) to develop a baseline. Arkansas has a higher percentage of Evangelicals, however since it was the home state of Huckabee I elected to exclude it. Some may argue that based on this I should exclude Utah (since Romney lived there while running the Olympics), unfortunately, there isn’t another state that is as heavily Mormon (Idaho is next with 24.07%).

For each state, I determined what the non-block vote would theoretically be by assuming that the states bordering them would vote similar to the non-block population. Admittedly, this is more accurate for the Mormon block since the states surrounding Utah have a much smaller non-Mormon population. The states surrounding Alabama and Oklahoma have less of an Evangelical population, but still a significant percentage of Evangelicals.

I used Presidential election returns from 2000 and 2004 to develop a baseline. The non-block vote (Other) was compared with the Total returns for those years to obtain the block vote that would result in those returns.

Mormon Voting
	R	D	VAP	REG
Utah - Other	58.04%	38.70%	55.32%	75.81%
Utah - Total	69.18%	26.17%	54.25%	70.60%
Utah - Mormon	74.81%	19.84%	53.71%	67.97%

Evangelical Voting - Alabama
	R	D	VAP	REG
Alabama - Other	56.33%	41.89%	50.58%	66.05%
Alabama - Total	59.46%	39.22%	52.90%	69.30%
Alabama - Evangelical	64.05%	35.30%	56.30%	74.06%

Evangelical Voting - Oklahoma
	R	D	VAP	REG
Oklahoma - Other	56.33%	41.89%	50.58%	66.05%
Oklahoma - Total	62.94%	36.43%	51.90%	61.80%
Oklahoma - Evangelical	72.26%	28.73%	53.76%	55.81%

R is the percent that voted for the Republican Candidate, D is the percent that voted for the Democratic Candidate, VAP is the percent of the voting age population who voted, and REG is the percent of registered voters who voted.

From these numbers, I conclude that Mormons are slightly more conservative than Evangelicals as a whole, but that they are also slightly less likely to vote than non-Mormons.

With this information I looked at the 2008 primary returns for Utah, Alabama, and Oklahoma. I ran various scenarios of support for Romney and Huckabee with differing amounts of the block turnout. The following is what I found:

1) Even if Mormons turned out in massive numbers in Utah (90% to 10%) and supported Romney by a substantial margin (95%), for Romney to win 90% of the vote, he still would need 56% support from non-Mormons. This was echoed in the CNN exit poll.

2) With 60% Evangelical turnout (as in Iowa) and 50% of Evangelicals supporting Huckabee (as in Iowa), Huckabee would need the support of 26% of the other voters in Alabama and 9% of the other voters in Oklahoma to match his returns there.

From this then I can conclude a few things. Romney’s support is not primarily based on Mormon voters. There are enough non-Mormon voters to have given him the win in Utah, and there aren’t enough Mormon voters in other states to explain the support in other states (this is further supported by exit polls which show that Romney did have the support of a significant amount of Evangelicals and Catholics). Huckabee on the other hand had a majority of his support from Evangelicals, although exit polls do show that he did get support from other block groups. This is also evident from his wins in the South, Kansas, and Iowa which had significant Evangelical turnout according to exit polls.

One thing I have seen often mentioned on the blogs is the Mormon vote in states outside of Utah (particularly Nevada, Colorado, Wyoming, California, and Florida). So I decided to create a swing factor which is a product of the % registered to vote, the percent of dominant political party, and the percent of the block in the state.

State	% Mormon	Swing Factor
Utah	66.45%	33.79%
Idaho	24.07%	12.24%
Wyoming	9.54%	4.85%
Nevada	5.85%	2.98%
Colorado	2.15%	1.09%
California	1.56%	0.79%
Florida	0.47%	0.24%

An election would need to have a margin less than the Swing Factor for the block to have any real political clout. All of the primary/caucus margins were greater than the swing factor for these states; so, in essence, the Mormon vote (as a block) was not a deciding factor in any primary/caucus. There simply are not enough Mormons in other states even if we assume they are all Republican and that they all show up to vote to influence the elections by themselves. An interesting note, with the Florida swing factor of 0.24%, this means that during the 2000 election, there was enough Mormon clout to swing the election to Gore. However, based on the fact that Utah (ergo Mormons) overwhelmingly voted for Bush in that year, that would have been a near impossibility (besides if Mormons were for Gore, then Utah would have voted for Gore and the whole Florida mess would have been moot).

Governors vs. Senators

There is plenty of talk of Governors making better presidential candidates than Senators. Senators are said to lose while Governors win. The usual reason cited is executive experience. I decided to see for myself whether this was the case. I looked at all of the presidential elections since 1900. I divided candidates into four categories.

1) Senators - candidates whose last elected office was Senator (not necessarily a sitting Senator)
2) Governors - candidates whose last elected office was Governor (not necessarily a sitting Governor)
3) Presidents/Vice Presidents - candidates whose last elected office was President or Vice President (not necessarily a sitting President or Vice President)
4) All others (Congressmen, Supreme Court Justices, Businessmen) Senators won the presidency 2 out of 7 times (29%).

Governors won the presidency 6 out of 14 times (43%). Presidents/Vice Presidents won 16 out of 25 (64%). Using the Governors value as a baseline probability, and a cumulative binomial distribution, there is a 36% probability that the Senators would only win 2 contests out of 7 tries. Not a high percentage, but certainly not prohibitive; ergo, Senators are not really disadvantaged compared to Governors. In comparison, there is only a 3% probability that the Pres/Vice Pres would win 16 of 25. This indicates that the Presidents and Vice Presidents definitely have an edge over Governors or Senators. A couple of interesting tidbits. While Governors and Senators are statistically fairly even, Governors have received twice as many nominations as Senators. Only once have we had a Senator vs. Governor matchup, in 1920 and the Senator won.

Apples and Oranges

Comparing apples and oranges must be a required course for candidates in order to run for office. Here is a quick example. http://www.factcheck.org/elections-2008/myrtle_beach_blarney.html Huckabee continues to tout the roads as a great accomplishment. However just listening to the words should raise red flags. Going from worst to most improved doesn't mean anything. Going from worst to 4th worst is not something most people would brag about (apples). But comparing it to improvement (oranges) makes it more palatable. Of course if you start out at the very bottom, there is plenty of room for improvement. So what the truth is, is that the roads in Arkansas were awful before Huckabee, after Huckabee they are still awful, just not as much.

Regional Candidates

Now that Mitt Romney has decided to suspend his campaign, I thought it would be worthwhile to examine some of what I have read about regional candidates. On Super Tuesday, my wife and I discussed the image of the US with the states highlighted that each candidate had won. It gave the picture that Romney's support was in the west and midwest, McCain's support was in the Northeast and California, and Huckabee's support was in the South. So I decided to examine this further.

I took the percentages that each candidate received in the the states thus far. Then I divided them up regionally and found the average. To determine if someone was a regional candidate I assumed that they would have to have greater than 35% support in one region and less than 15% support in at least two regions.

McCain Romney Huckabee Paul
Northeast 43% 37% 9% 7%
South 32% 22% 36% 4%
Midwest 28% 33% 23% 10%
West 23% 50% 11% 11%
Average 32% 35% 20% 8%

From the numbers I have above, only Huckabee meets my definition of a regional candidate. He won the majority of the states in the South and had a good showing in the states he didn't win. However, his support in the Northeast and the West is dismal, and even in the Midwest, his victory in Iowa is what is boosting his average (without Iowa, his Midwest average is 18%). What I found more interesting were the numbers for Romney and McCain. Romney had strong support in each of the three regions he lived in (Massachusetts, Michigan, Utah), and was still able to draw a significant number of votes in the South against a regional candidate. His West average is skewed upward by the 90% landslide in Utah (look for my article on the Mormon vote for more on this). However, he still won the majority of states in the West. McCain like Romney has fairly strong support all over the country. His strength is the Northeast with a significant support component in the South. His West support has been concentrated in California and Arizona (his home state).

I don't think that anyone would argue that McCain is not a regional candidate. However the question remains, is Romney? I would say no. His numbers compare very favorable to McCain, and the overall average is similar to McCain's (32% vs 35%). So what is the difference? McCain has significant support in the more populous states in each region. In the Northeast, McCain won NY, NJ, and CT compared to Romney's MA and ME. In the Midwest McCain won IL and MO while Romney won MI and MN. In the South McCain won FL, Romney didn't win anything. In the West McCain took CA and AZ while Romney had UT, CO, MT.

One other piece of evidence to look at is the number of states versus the percent of support.

McCain Romney Huckabee
0%-10% 1 0 7
10%-20% 4 3 9
20%-30% 5 8 3
30%-40% 9 9 6
40%> 8 7 2

From this we can see that the majority of states have Huckabee in the 0%-20% support range. McCain's majority is in the 30% and above, while Romney's is the 20%-40%. Excluding Utah, Romney and McCain garnered greater than 10% support in every state that has been contested. What this all tells me is that Romney did a good job of gathering a strong support for himself across the country. It wasn't enough to beat McCain who also has widespread support. Huckabee has not shown that he can get significant support outside of the South.

Next would be to look at how the numbers shake out with Romney out of the Race. A simple analysis of Romney voters going half for McCain and half for Huckabee yields the following regional result:

McCain Huckabee
Northeast 61% 27%
South 43% 47%
Midwest 44% 39%
West 48% 36%

McCain still wins three of four regions. If we assume Huckabee is able to court 2/3 of the Romney vote the outcome is different.

McCain Huckabee
Northeast 55% 33%
South 40% 50%
Midwest 39% 45%
West 40% 44%

Huckabee wins three of the regions. That being said, McCain still has strong enough support that he can win another 500 delegates and lock in the nomination. Since Huckabee has not shown much support in the West and Northeast, I would consider it very optimistic to assume that he even gets half of the Romney votes in those regions. All this is well and good, but in the end a state by state analysis would be better and nothing beats the actual results from the primaries and caucuses. If I was a betting man, my money would be on McCain.

Interesting Use of Poll Statistics

I have been amazed at how much the RealClearPolitics (RCP) poll average is quoted. This number is basically meaningless. What they do is compile all of the polls and then take an average of the most recent several polls. In some cases I have seen the polls that are averaged being weeks apart. So for instance say McCain was up by 20 points three weeks ago in one poll. However more recent polls show only a 3-4 point spread between McCain, Romney and Huckabee. Because of their averaging method, the RCP average may still have McCain up by 5-8 points. This could be the case even if Romney or Huckabee is ahead in the more recent polls. Additionally, each poll has a different methodology of selecting their sample and asking the questions. So trying to compare what the Rasmussen poll means in relation to the SurveyUSA poll is not a simple task of looking at the numbers. A better way to look at the polling information is to look at each poll over a period of time. This is especially effective for those tracking polls that do a rolling sample over a few days. This way one can see if Obama has "momentum" or if Clinton's support is remaining steady. In the end, a poll doesn't tell the story like election returns.