Life Cycle Economics and Replacement Optimization for a Generic U.S. Family Sedan 2005-01-1553

In 1998 the United States Automotive Materials Partnership published the life cycle inventory of a generic US family sedan. Several years later, researchers at the University of Michigan expanded this analysis to consider the dynamic replacement decisions over the vehicle lifetime that would optimize energy and emissions performance of generic family sedan ownership. The present study provides further analysis of this vehicle by examining the life cycle cost profile for generic sedan ownership and determining the optimal replacement intervals for this vehicle based on economics.

Life cycle cost for a generic vehicle was estimated as $0.37/mile for a ten year life cycle and $0.31/mile for a twenty year life cycle. This study found that while less than 10% of the generic vehicle life cycle energy (20 year) is consumed during material production and manufacturing, 43% of the total life cycle cost is associated with vehicle purchase and depreciation. Nevertheless, both energy and cost factors favor minimizing the number of vehicle replacements in a given time period. Over the 36 year period examined in this study (1985-2020), the ownership pattern that minimizes total life cycle energy use is replacement every 18 years. While the pattern for minimum life cycle cost is replacement of the first vehicle after 17 years followed by replacement of a second vehicle after 19 years. Further analysis suggested replacement every 9 years could potentially balance a range of cost and environmental objectives.