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ContinuousWave: The Whaler GAM or General Area
Engine Cost Analysis Spreadsheet
|Author||Topic: Engine Cost Analysis Spreadsheet|
posted 10-05-2005 08:32 PM ET (US)
Below is a link to a nice spreadsheet which analyzes the costs of a new engine in terms of potential recovery from improved fuel savings. This was developed by Roger Hudson, Professor of Business, Western State College of Colorado.
The spreadsheet is in Microsoft Excel format, but should be easily converted to other program using import filters.
Roger has a DAUNTLESS 16 with a 115-HP Yamaha outboard, and is a fan of continuousWave .
Clicking on the hyperlink above should download the spreadsheet to your computer. Here is the spreadsheet in AppleWorks format:
posted 10-05-2005 09:09 PM ET (US)
I think [Roger] did a very nice job on this, and if you consider resale value, the break-even is much closer than I thought.
The only depessing thing is how much this will cost over the life of the engine, no matter whether you use new or old.
posted 10-05-2005 09:10 PM ET (US)
The spreadsheet adds some improvements to the original analysis (see the discussion at
New Engine: When to Buy
The spreadsheet allows for:
--a rise in gasoline prices at a selectable rate
and a few other refinements.
Have fun plugging in numbers!
posted 10-05-2005 09:22 PM ET (US)
Excellent tool! Thanks!
posted 10-06-2005 12:03 AM ET (US)
Very nice Roger, thank you! A great tool.
posted 10-06-2005 12:35 AM ET (US)
Very impressive Roger and Jim. You guys have this down like a mutual fund fact sheet. Looks like my motor is good to go for awhile.
posted 10-06-2005 02:30 AM ET (US)
This is very timely, since I towed my Outrage 22 Cuddy with it's DOA Mercury 200 home from the shop today. I may modify the spreadsheet slightly for a DFI engine, which uses less (but more expensive) oil than a traditional 2-stroke, Nice work Roger and Jim.
By the way, it worked fine on my Mac Powerbook, but I do have some very expensive Microsoft Office software running on it. It's nice to use it for something besides work!
posted 10-06-2005 06:34 AM ET (US)
Wow, great model. Thanks for the excellent tool.
If I fill in the fuel costs as being $7.50 USD/gal as it is over here, I can justify the cost of buying a new engine rather easily. Very impressive.
Looks like you guys should sell this model to the all the outboard engine manufacturers before the major European boat shows....
Very well done indeed. Hat's off!
posted 10-06-2005 09:29 AM ET (US)
I retract my earlier statement about people having too much time on their hands, posted on the "New Engine: When to Buy" thread. This is a great tool and I will use it. This site is truly invaluable.
posted 10-06-2005 07:54 PM ET (US)
That is one incredible tool to have available on CW. Thanks to Roger for designing it, and to Jim for publishing it here. Just another reason why CW is so great, thanks to its many contirbutors and unknown lurkers.
Any of the engine manufacturers should have that up on their sites. They'd sell a lot more engines. Dealers too.
I'm placing my order for a new 175 Verado tomorrow morning for my 35 year old Classic 21. Have to bring this boat back to it's factory delivered 4-stroke Bearcat roots.
We are in a unique time frame for a calculator like this, as the old 2-strokes dissappear and 2-Star and 3-Star engines take over with greatly increased fuel economy. It's the increased fuel economy and sky-high gas that makes the new engines a slam dunk. Working with same technolgy engines will not produce the results, it seems.
We just better hope that the people buying our old used 2-strokes haven't been to Continuouswave. As of this minute, their value just plummeted!
posted 10-06-2005 11:35 PM ET (US)
The one assumption that this analysis makes--and this really is the MOST important assumption of all--is that the new engine will only use 70-percent as much fuel as the old engine. I think this is a reasonably conservative assumption if you are going from a carburetor two-stroke to a four-stroke or direct-injection two-stroke (E-TEC, OptiMax, HPDI, TLDI).
Almost all of the potential savings is based on the new engine using less fuel. Some additional savings accrues because of reduce maintenance and repair costs, but these are speculative. It might very well happen that your old engine runs perfectly for the next five years and does not cost you a cent in repairs.
The more time you run your engine and the more fuel your current engine uses, the greater potential there is for savings. For boats with twin V6 engines (225-HP) that run several hundred hours, the cost of a new engine can be recovered in saved fuel rather quickly.
posted 10-07-2005 12:12 AM ET (US)
Jim - I think the chance that an older oil injected carbureted 2-stroke will run trouble free (repair dollar free) for five years, the same period a new engine would be covered under warranty if bought during the winter, is remote. Maybe with EFI, but not carbs, with service costing $95/hour. These low tech engines just don't take care of themselves as well as the new engines, with all their sensors, constant adjustment to fuel mixtures, warning systems like Smartcraft, electronic components, etc.
I have found that the maintenence costs on my carbureted Mercury's are about 4 times the cost of the EFI maintenance, hour for hour of use. There is just too much to go wrong, keep in adjustment, or keep clean. Nor would I buy a carbureted 4-stroke, if any are even still being made, only EFI.
Reading through the repair section of CW, all we see are two stroke problems, mostly older carb and even some DFI engines like Optimax, Ficht, E-tec and HPDI, but the problems are still there lately. We see literally nothing on 4-strokes and 2-stroke EFI, Merc or Yamaha.
With ten times the number of moving parts, I do not understand why these 4-strokes are so reliable compared to 2-stroke. But they seem to be. But then again, any auto EFI 4-stroke is good for 300,000 miles these days also.
One of the keys to 4-stroke outboard power is to buy the boat's full rated HP so that acceleration/plane off issues don't occur under heavier loading.
posted 10-07-2005 04:33 PM ET (US)
Am I interpreting the results on this spreadsheet correctly, in that if you come up with a negative number, that is the ADDITIONAL COST of the owning new engine over a five year period? And that if you have a positive number THAT IS LARGER THAN THE NET PURCHASE COST OF THE NEW ENGINE, you are actually MAKING money by purchasing the new engine?
If that's the case, putting a new Verado engine on my Whaler sure beats working for a living!
And if your positive number is between 1 and the net purchase cost, you are SAVING money, but not making any?
Even if one comes out with a negative number, there is a lot of value in having a newer, quieter, smoother, maybe more powerful and more reliable engine behind you. Seems like a reasonable price to pay.
If one is upgrading to a new technology from conventional 2-stroke, to me there is no reason not to immediately buy a 3 star engine
posted 10-07-2005 11:33 PM ET (US)
Just tell her you use it 125 hours per year, and that you'll be saving $123 to boot!
posted 10-08-2005 10:42 AM ET (US)
That's a nice tool. It's fun to play with.
I think the 3 gallon per hour spread between the old and new engine could be on the generous side. A few years ago, some may recall here that I posted a comparison between the four stroke Yamaha F225 and the 2-stroke Yamaha 225 Ox66 EFI based on data taken from the Pursuit website. See continuouswave.com/ubb/Forum4/HTML/001019.html . It was remarkable to find in that review that the allegedly more fuel efficient motor, the 4-stroke, actually burned more fuel to achieve the same cruise speed as the EFI motor. The only significant fuel efficiency advantage seemed to come at trolling speeds. At trolling speeds, the difference in fuel consumption is likey to be more on the order of 1 gallon per hour from what I can tell.
Also, I think the $400 per year in repair and maintenance for the old motor could be on the high side as well based on my experience with a variety of different engines for a number of years. But leaving that alone for the moment, if the spread sheet assumption is simply changed to assume a 1 gallon per hour average difference instead of three, the spread in the additional cost for the new engine jumps about three fold. At the end of 5 years, the new engine purchaser's wallet is nearly $4,300 lighter essentially to eliminate some smoke and noise! If the repair and maintenance costs were doubled up to $800 per year, the new engine purchaser's wallet would still be nearly $2,500 lighter after 5 years.
So depending on what assumptions are made or how accurate the assumptions are, there could be at least 4,300 reasons to put off the upgrade as I see it if one is strictly looking at the numbers.
posted 10-11-2005 04:52 PM ET (US)
Well, the 7% rise per annum in fuel costs could be a bit low considering that fuel is up nearly 65% in the past two years. Plug those numbers in and see what you get!
posted 10-11-2005 05:56 PM ET (US)
Thanks for the compliments about the engine cost analysis spreadsheet. I did it mainly for the fun of developing it but it is nice to see it can help people think through an expensive decision.
LHG is correct in his interpretation -- a negative "cost difference" number indicates the present value of the additional out of pocket cost to purchase a new engine.
Also thanks to those who challenged the base operating assumptions and helped us all get a better handle on what it really costs to operate various types of engines. An analysis tool is only as good as the assumptions plugged into it and those with good financial records and experience with different outboards can help all of us make better decisions.
posted 06-27-2007 12:14 PM ET (US)
With fuel prices rising, it may be time to reconsider how an investment in a new engine can pay for itself in saved operating costs. The last time I used this excellent spread sheet analysis tool, gasoline was in the $2/gallon range. Very recently I have been buying gasoline at on-water fuel docks for over $4/gallon. Even with my modest use of my engine (of about 70-hours or less per year) I see that the cost of a new engine can be fairly quickly recovered in fuel savings at this high gasoline price.
posted 06-27-2007 12:21 PM ET (US)
I am going to take a close look at this. I just couldn't believe how quickly I went through the first of my two ten gallon tanks yesterday feeding my 1987 Evinrude 88sp.
Selling the wife on a new Etec is going require all the help I can get.
|Casco Bay Outrage||
posted 06-27-2007 01:04 PM ET (US)
Thanks to Roger and Jim! This is a great tool.
FYI - I had no issues downloading this and launching in OpenOffice.
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