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Tell me if this is a good investment (CNG tanks)
Posted on 5/16/11 at 2:19 pm
Posted on 5/16/11 at 2:19 pm
Let's say I get a new vehicle in the somewhat-near future:
A CNG tank would cost me $11,000.
I would get a 50% tax credit the next tax season.
I currently spend about $80/week on gas, and natural gas is consistently between 40-50% of the cost of gasoline. Also, there is a gas station with CNG pumps very close to my workplace, so it wouldn't be inconvenient to fill up.
Let's conservatively say that NG is 50% of gasoline, so I will save $40/week.
I would break even after 2 years, 9 months (($5500 tax credit + ($40/wk X 137.5 weeks) = 2 yrs, 9 mos)).
After that, I would begin saving $2080/yr, or an 18.9% return on my initial investment of $11,000.
What am I missing?? - Obviously, if gas prices go down, my savings per week will go down. Is there anything else I'm not thinking about?
A CNG tank would cost me $11,000.
I would get a 50% tax credit the next tax season.
I currently spend about $80/week on gas, and natural gas is consistently between 40-50% of the cost of gasoline. Also, there is a gas station with CNG pumps very close to my workplace, so it wouldn't be inconvenient to fill up.
Let's conservatively say that NG is 50% of gasoline, so I will save $40/week.
I would break even after 2 years, 9 months (($5500 tax credit + ($40/wk X 137.5 weeks) = 2 yrs, 9 mos)).
After that, I would begin saving $2080/yr, or an 18.9% return on my initial investment of $11,000.
What am I missing?? - Obviously, if gas prices go down, my savings per week will go down. Is there anything else I'm not thinking about?
Posted on 5/16/11 at 2:34 pm to NaturalBeam
quote:
What am I missing?? - Obviously, if gas prices go down, my savings per week will go down. Is there anything else I'm not thinking about?
If you find a way to hedge the risk associate with an increase in Nat Gas, then it's a good deal, assuming you have done all the research correctly.
The biggest risk is a price spike making your investment tank. You can probably just offset it by buying into something on the market, or if you have the ability, going into the futures market (probably too complicated for most.
How did you calculate "the cost of Natural Gas"? You need to do it on a per mile ratio, IMO.
Posted on 5/16/11 at 2:45 pm to NaturalBeam
What's the increase in insurance going to be? Any?
Posted on 5/16/11 at 3:27 pm to NaturalBeam
Would the conversion of a CNG tank void your warranty?
Posted on 5/17/11 at 1:21 am to NaturalBeam
Will you be able to get gas if you travel?
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