Gas prices are high, and that has lots of folks making knee-jerk car decisions. I’m an enginerd, so I don’t do “knee jerk” (unless I find a holy grail, of course); I’m the kind of person who likes to run the numbers. So let’s dig into whether my wife (and I; we’re a unit, you see) should trade in her excellent 2017 Lexus RX350 for a vehicle that most car reviewers don’t like — a Lexus RZ450E.
The last-gen Lexus RX is a car that, I have to admit, I used to find a bit boring. But then, as part of a “One Car Challenge” in which my city paid my wife and me to drive only a single vehicle for a month, I started driving the Lexus, and I began to realize that a vehicle that fulfills its intended function this well is worthy of respect.
Here’s what I wrote after I drove my wife’s car for a few weeks:
The leather seats are comfortable and feel durable — they’re heated, cooled, and power-adjustable with memory function. They’re excellent seats in an excellent cabin in a car that floats quietly like a magic carpet…
It’s an excellent car, and Lexus should be commended for building something that perfectly aligns with what [my wife] and so many other consumers are looking for: The ultimate no-bullshit luxury SUV. That’s what the Lexus RX350 is. You buy it, you’re comfortable, you’re confident, you’re safe, you rarely have to worry about significant mechanical issues, the dealership will give you a great service experience (my girlfriend actually enjoys going to the Lexus dealer, which says a lot about what Lexus is doing right), and the car just demonstrates its competence every time you’re behind the wheel. It fades into the background, and lets you live a life where cars are not at the forefront.
I wrote that review two years ago, and to this day I maintain that her car is excellent. The only major issue we have had are the front brake rotors, which are hideously warped after being changed only two years ago. But that’s not the car’s fault, that’s the fault of whoever did the repair. [Checks notes; oh crap, that was me using Advance Auto Parts components!].
Anyway, we find ourselves deciding whether or not we want to trade in this magnificent machine, not because gas prices are high, but because my wife, Elise (not her real name), likes the idea of going electric after driving around my i3, and she would like something newer.
In The Eyes Of Many, The Lexus RX Is The Hero, The RZ Is The Zero
If you read reviews of the fourth-gen Lexus RX, you’ll see a lot of journalists singing the car’s praises, just as I did. But if you read reviews of the Lexus RZ — Lexus’ first electric vehicle — you’ll see the opposite. People deride it. And the reason, primarily, is the range, which sits below 200 miles for the RZ450E on 20″ wheels. In the winter, 150 might even be a stretch.
This may have you a bit confused. David, why would Elise ever think about trading a universally beloved SUV for a universally loathed one that, by the way, is actually a bit smaller?
Well, hear me out.
An EV Might Be The Cheapest Way To Upgrade To A Newer Car
Rather than fearing the Lexus RZ’s range limitations, I think my wife and I can actually take advantage of them. Specifically, I think we can leverage the RZ’s dramatic drop in resale value — something that seems rather common for modern EVs sold in the U.S. — in our favor, especially considering our lifestyle that works well with even a mediocre-range EV.
Check out the two depreciation curves above from Car Edge. The first is that of an RZ, the second is that of an RX350. Despite being nine years old, Elise’s $50,000, nine year-old Lexus’ value is somehow not that far off the value of a $60,000, three-year old Lexus RZ — largely because the RX’s curve not only lacks that initial steep drop, but also features a shallower slope over the span of 10 years.
She’s been offered over $20,000 for her car, while Lexus RZs are trading all day for between $27,000 and $30,000:
Being able to trade a 2017 gas SUV for a certified pre-owned 2023 electric SUV (with a six-year, unlimited-mile warranty) from the same brand without having to pay even $10,000 is pretty remarkable. And yes, the RX is a bit bigger inside, but it’s not that much bigger.
Still, $10 grand is nothing to scoff at, and it’s worth analyzing whether it’s worth it. The goal with the RZ is twofold: 1. My wife wants a new car. Some of that has to do with her car’s lack of modern infotainment (it has only basic Bluetooth capabilities with no CarPlay or Android Auto), and some of that may have to do with the car just feeling old for aesthetic or other reasons. To be honest, I’m not entirely sure I fully understand the desire for a newer car if that desire isn’t based on specific features, but I also buy a new junker every few years, so who am I to judge? The second reason we’re considering the RZ is that we have a Level 2 charger at home, and she’s a stay-at-home mom with no commute, so we’d like to avoid having to spend money on gas and maintenance.
So let’s just dig into those two reasons and see if the RZ makes sense.
The RZ: A Huge Step Up In Modernity For Shockingly Little Money
Viewed through the eyes of a Lexus fan for whom range isn’t a huge concern, the RZ seems like an amazing proposition. Here’s a look at the Lexus RX’s cabin:
And here’s the RZ’s:
The RX’s cabin was developed for the 2016 model year, and I have to hand it to Lexus — it still looks nice, and its standard “PRNDL” shifter works well while offering no discernible disadvantage over the RZ’s rather large dial+button shifter. As for features, the RX has Adaptive Cruise Control, Heated and Cooled Seats, Lane Departure Alert, a nice 12.3-inch color display, but a fairly primitive infotainment system that allows for Bluetooth connectivity to a phone, and a super basic backup camera. Here’s a look at the vehicle’s infotainment screen:
Meanwhile, the Lexus RZ features a lot more active safety features that annoy the everliving bejesus out of both my wife and me (constantly beeping and booping all over the place), but crucially, it has a great 360-degree camera and a 14-inch infotainment screen that comes equipped with Apple CarPlay.
Now, this might lead you to say: “Well, why not just get the RX detailed and upgrade the infotainment system?” That’s a good point, and after talking with our resident infotainment nerd, Thomas, I learned that there is a kit that would upgrade the RX to have Apple Carplay:
$600 to bring a nine-year-old car into modernity? Seems like a good deal, because powertrain-wise, the Lexus’s V6 and eight-speed automatic seem modern enough for a gas, non-hybrid car.
What’s more, this would fix my wife’s biggest complaint with her RX, without adding all the fussiness of the RZ’s infotainment system. From my RZ review:
And in many ways, the RZ feels just like an electric version of her RX. The ride quality is exceptional, the cabin is quiet as a confessional, the seats are cushy, every surface feels high-quality, front visibility is great, the seating position is high enough, acceleration is decent — it hits all the high spots a traditional Lexus driver would want. But sadly, I think the infotainment system falls short.
Notice how there are only a few physical buttons — two climate control temperature dials, a volume dial, a couple of defrost buttons, a park assist button, and a camera button. For conservative, well-heeled (and usually older) Lexus buyers, this just seems like a misstep. Which 30 year old is buying this Lexus RZ whose technology is years behind the likes of Lucid, Tesla, Hyundai, and others? Nobody. This car is being purchased by people who drive Toyotas and other Lexuses; they want the vehicle to be luxurious, reliable, and simple to use. Maybe I’m wrong and Lexus has customer clinic data that disagrees with me, but it seems to me that the last thing a Lexus owner want is to have to deal with all the controls being on a touchscreen, a shifter that require a how-to video, and a bunch of beeping and booping electronic nannies.
What About The RZ’s Running-Cost Savings?
Now let’s talk about the money side of things. To trade Elise’s $20,000 RX for, say, a typical 2023 RZ, would cost us $9000. But is it worth it? Ignoring all the emotions of it all, will we recoup these $9000 in savings somehow?
Let’s assume Elise drives 8,000 miles a year, which is a bit lower than average, but makes sense for the suburban lifestyle we’re living here outside of LA. Her RX, realistically, gets about 20 MPG around town, and with fuel at $5.50 a gallon and climbing, that means we’re spending $2,200 a year on fuel.
Meanwhile, energy prices sit around 25c per kWh, and the RZ can easily manage 3 miles per kWh. Again, assuming 8,000 miles per year, that’s 2666.67 kWh, which cost $666.67, for a savings of $1,533 annually in fuel costs.
Add maintenance to the gas car, factor in increased tire wear for the RZ (on 18-inch wheels), and factor in the RZ’s higher insurance costs and registration costs, and we’re probably saving about $1000 a year at least. If we own the car for nine years like we have her RX, then yeah, we basically make up the cost of buying the RZ, and all the while my wife enjoys a new car that has integrated CarPlay, a nice overhead 360-degree camera, drives incredibly smoothly, and is theoretically helping the environment a bit.
Of course, then there’s the resale side of the equation, and that’s where the business case for the RZ falls flat. It may save us money in terms of operating costs, but if in nine years Elise wants another car, that RZ is likely to be a fairly weak trade-in. In fact, I’d venture to say that, by 2035, her 18-year-old 2017 Lexus RX350 will likely be worth more than the 12-year-old RZ. How much more? I’m not sure. The longer we keep the RZ, the less that matters, because both vehicles will eventually be worth so little that the delta will be negligible. But my point is: Buying the RZ to save money may sound smart with high gas prices right now, but in reality, the numbers aren’t going to work out.
Still, Elise could significantly upgrade her daily driver to something she’ll probably enjoy driving more each day, and it’s basically going to be a negligible expense in the end, if any. And that alone has me convinced this is probably the right move, as I suspected it would be when the two of us went on a romantic birthday drive to wine country a few years ago. From that review:
In a year or two, I bet these will dip into the $20,000 range. And Elise’s 2017 RX only has 42,000 miles on it; she should be able to trade that thing in for $20 grand at least:
All in, she’d pay probably less than $10,000 to upgrade from a 2017 to a 2023, she’d save money on running costs, and she’d finally have Apple Carplay and other modern tech. As someone who has a place to plug in at home, and who regularly commutes only a few miles a day, she just doesn’t need a gas car. The Lexus will be perfect for her; she became a fan after our Solvang trip (she didn’t find the bings and boops and nannies too bad), and assuming she enjoys driving it (I drove the whole trip) and the car keeps depreciating, why the heck not?
We’ll have to make sure the RZ’s size works for her, but the range shouldn’t be a concern, and I have no doubt she’ll be delighted driving electric all day, as I myself find it to be a lot more relaxing than commuting in an ICE car.
So we’re probably going to pull the trigger, though maybe we should do so soon, because if fuel prices keep rising, maybe RZs will actually appreciate a bit.
What’s the cargo space like in the RZ? Do you plan on traveling with your kid in this car? I’m not familiar with the RZ, but my sister-in-law has a Lexus NX and I was surprised how small the cargo area is compared to a conventional RAV4 or CR-V.
My kids are grown but I recall taking weekend trips with a baby which required a portacrib, a stroller, changes of clothes, feeding accessories, possibly even a high chair. Throw those in the back of the RZ and how much space is left for anything the adults plan to pack?
Some parents, for safety reasons, don’t like to pack hard items in the same passenger area where their kid is sitting, but if you’re fine with that, I’m sure you could just stow stuff on either side of the kid and be fine. Just don’t turn sharply or make an emergency stop.
> I also buy a new junker every few years
You spelled “weeks” wrong I think
Why not an RX Hybrid? Is that a thing? That would be a nice middle ground I guess.
We carefully considered an RZ, and test drove a nice RZ450e premium twice earlier this year. Ultimately, we decided to stay with gas, as the range is just too poor for our primary family car. Also, the interior and features are frankly underwhelming compared to almost all competitors. It really, really shows that Toyota didn’t try hard on this vehicle, and there are so many better options in gas, electric, or hybrid.
The way I have rationalized these irrational purchases is comparing safety scores. RZs do very well in crash tests, with a rare ace of the updated overlap front test. I doubt an RX of that era would do as well, despite good scores. And while I’m not a fan of the arms race to make heavier cars, having inertia on my side is a huge plus when I’m dealing with homicidal north Jersey traffic.
Another upside is that 9-year replacement cycle you predict should coincide nicely with year VW actually brings the Scout to market and you liked those.
Oh I LOL’d hard at this friend. Scout ain’t coming when it said, if it at all.
Well if your wife wants it and it’s not totally irresponsible, just say go for it. This has been serving me well for 16 years this month. After all, my wife carried and gave birth to my children, and is usually more grounded than I am.
Also I have been seeing a ton of these around lately.
You’re way overthinking this. There are only two questions you have to answer: 1. Can we afford it? 2. Will it materially increase Elise’s happiness? If the answer to both of these questions is yes, buy it. If the answer to either question (especially Q1) is no, stick with what you have.
This is true, but I don’t see that he’s overthinking.
1) “Can they afford it” requires calculating what it will costs, not just immediately, but also with running costs, and potential trade in. Otherwise a person ends up in an 84mo loan going after a monthly payment they “can afford”, and paying $20k or whatever in interest!
2) Happiness is a strong and sufficient reason to do something (provided #1). But what I see is David trying to decide what will make her the most happy. Aftermarket infotainment in a car she definitely likes, will she actually like the RZ, will the range work for her, etc. These all seem like legitimate thoughts to explore.
Yeah, a lot of things go into #1, that’s for sure, but what I see in the article is comparison with the existing car, not an analysis of how it would fit into his budget. As far as her happiness goes, I don’t think he can make that decision for her. If she thinks the new car will be better than a different solution, I don’t think he’ll be able to convince her otherwise. I could be wrong, but that’s been my experience with my wife. Once she decides on something, it’s pretty much settled.
Interesting. My wife is different. She is clear about what she likes and what she doesn’t, and what she thinks will make her happy, but she doesn’t want to waste time considering the market, available options, technology, range, etc., enough for her to definitively say what the best answer is for herself. Cars are my domain and we trust each other (I certainly defer to her judgement in other areas!!!). She trusts me to take all that into account and to make the decision regarding cars. So far I’m batting 1000 with happiness; so far so good anyway.
I think David knows his wife and is probably putting just the right amount of thinking into it.
Others have already said it, but I don’t think the RZ is anywhere near the bottom of its depreciation curve. The RX has long been the benchmark for the luxury crossover because in the aggregate it does everything its competitors do but better. The RZ is the inverse – it does everything its competitors do, but worse. For that reason, I don’t see the RZ building a cult following to stem the depreciation for a long, long time (if ever).
Get literally any other EV. The RZ was always half-assed.
And at $25-30k, it has a long way to depreciate still.
The interior comparison isn’t convincing. Those look like literally the same interior to me.
I’m usually partial to newer stuff for daily driving, but the RZ ain’t it. If you have your heart set on a newer EV, almost anything else will be better. Ioniq 5, EV6, BMW i4, hell, even a Tesla.
> Those look like literally the same interior to me.
That was literally (literally literally, not figuratively) my reaction. I took an extra minute to look for differences, and I didn’t find any significant ones other than a little more plastic here and a little less there, and the surfaces. And the annoying giant screen.
One has CarPlay and the other does not.
Didn’t David have a 30 mile range, cheapest Leaf for sale, once? After that range, a massive 150 mile winter range would feel like enough juice to get to the moon and back.
“Add maintenance to the gas car, factor in increased tire wear for the RZ (on 18-inch wheels), and factor in the RZ’s higher insurance costs and registration costs, and we’re probably saving about $1000 a year at least.”
And CA sales tax, any dealer fees, etc.
I hope he’s taken that into account! California state is 7.25%, but there are local taxes that make it from 7.75-10.75%!! Sales tax on a $30k car will be another $2,300-$3,200 !!!
My state is 7%, but it’s still a PIA to get to the BMV to register a new(to me) car and to know they’re going to take another big bite out of me.
You should keep the RX because the interior comes equipped with a coffee cup
Your reasoning and math make total sense. Why not apply that to a vehicle that is actually well-regarded? Ionic 5, GV60, Mach-E, EX40…
A fairer time period for the comparison might be owning the car for six years, since you sell Elise-mobiles at nine years old.
It you live in the city and can charge at home, EVs are tops. It is so much easier and more relaxed driving our Ioniq 5 around town than the Odyssey. Instant power and one pedal driving is so much better for driving around doing boring everyday things. And with fixed energy costs it gets better by the day. The gas station closest to my house (San Jose) is $6.60 for 87! I never have to waste time at the gas station because it refuels while a sleep.
“The gas station closest to my house (San Jose) is $6.60 for 87!”
Shop around. I paid $5.19 for 87 in SJ just yesterday. Lots of stations are in the $5.49/gal range.
Gas buddy is your friend
I also live in SJ and I’ve done the maths. Up until this stupid ass war it cost roughly about the same to fuel a typical PHEV with local regular as charge it with PG&E overnight joules. Now its about the same as a mix of PG&E overnight and daytime joules (but still WAY cheaper than public charging).
Will this war keep gas prices high? Short term yes but long term? Nobody knows. PG&E rates ain’t dropping though.
To be fair, that station is on Alma right off 87. So it is a rip off station. Closest to my house, but I never fill up there. Costco by the Airport was $5.49 on Thursday when I topped off the Odyssey. To scare the non-Californians 91 is $7.05 at the rip off station!!
I’m on the PG&E EV plan which is only 30 cents a kw from midnight to 3pm so charging the Ioniq is pretty cheap at home. Yes, non-Californians I know that is still a rip off, but everything in this state is.
As for gas prices, they shoot up like a rocket and fall like a feather.
I mean, you don’t have to get that crappy RZ. There’s tons of lightly used EVs that are better in most ways in that price range. Or you could just have her drive your new WW2 Jeep and pocket that $20k, that seems more fun.
I’m confused not having whizbang bullshit in the RX is an upside not a downside
Man, I know life is busy, but kicking the can on “hideously warped front rotors” is kind of lame. Just swap that crap out
It sounds like the reason he hasn’t is that she’s been driving Delmar around in the i3.
I think he got a bad set from a discount store.I trust he torqued them properly. I have done several sets, (different cars, never needed re-do) from rock, no complaints.
Never buy cheap brake parts.
I Always buy high quality name brands (zinc coated,to keep cooling channels rust free) from rock, usually half or less what napa asks for the same brand. Been a few years now, don’t know what tariffs did, but they pull from a lot of warehouses, and sometimes have clearance prices for top quality old stock that they won’t be replenishing.
> Never buy cheap
I don’t know if those three words in that order can be parsed by David’s otherwise excellent brain.
I work with a guy who has one of these, so I ride around in it to lunch a lot. His range issue is solved by Lexus basically giving him a loaner hybrid up to 3 times a year or something like that. So if he needs to go on a longer trip, he calls up the Lexus dealer and they let him borrow a car. I have no idea if it was a Lexus thing or a dealer thing or what, and it may or may not apply for CPOs, so your mileage may vary.
It does make a lot of noises in the cabin. But it is all very calming, unlike my A4 Allroad which basically screams at me for every little thing. Reversing in the RZ and hearing the parking sensors go off sounds more like being in a hospital bed than a car.
I was talking with someone about this recently. They also said their dealer (Thousand Oaks) does the same. Free RX loaner when needed. Not a bad deal at all.
It’s sweet…really…her letting you “participate“
Yeah, this.
I think you are framing the problem well.
Joint decisions with your spouse tend to lead to less resentment too. Good thinking there.
I think the downside risk is low here and it sounds like you like the RZ and it has potential to be a wash
I think some of these BEVs that are sort of under the radar of most shoppers will be future enthusiast cars
We bought an A6 Avant when my oldest was about 4. Fast forward a few years and my wife wanted to be one of the drivers on school field trips. To limit the number of cars and parents on said trips the only ones who were allowed to drive were parents that could seat at least 5 kids (none in the front row, obviously). So…we sold the Avant and bought a 3 row Honda Pilot.
Long winded way to say that you should really think about your future needs/wants for when Delmar gets bigger (It happens shockingly fast!). Our Pilot ended up getting stuffed with kids for many years of soccer, baseball, camping, etc.
oh man, worst trade in history.
To be blunt, the math/logic is simple. If your wife wants it, it’s not a ridiculously stupid thing to do, and you can afford it, well, decision made. It may not be the same decision as the one we would make, but it’s HER car. My wife’s car cost more than my three combined but she loves it and ultimately that’s what matters. She’s happy with it and that makes me happy with it.
Agreed. My spouse had an ionic from 2019. 50+mpg. My ancient 300 RX. 16mpg. My toy Del sol. Summer only 38+mpg. My 40 year old not quite running ok yet Cabriolet Summer only VW 30mpg. I’m guessing the value of ‘my’ 3 is roughly the value of her 1. Men are stupid.
Adding Apple Carplay to my wife’s 2017 Mazda CX-9 was a major factor in my wife recently deciding not to upgrade to a new(er) car after pondering it for a while. It modernized the feel a lot.