I bought this car new in 10/02 while looking for, and failing to find, a Toyota Echo for a commute car. The Echo is a tiny gas-engined Toyota that gets over 40 mpg and, at the time, cost about $10K less than the Prius. $10K is a lot of gas, even at the current price of $3.00/gallon. Don't forget the $850 savings on California sales tax, and the savings on California registration and license plate costs. The Prius came with a $2,000 deduction off your adjusted gross income (AGI) which saved a little in federal taxes.

I have 38K miles on my Prius now, and, in that short time have put 10 new tires on it. The first full set lasted slightly less than 25K miles. Two tires failed for unknown reasons, and the second full set needed two replaced at 11k MILES. The tire people tell me the Prius's they serve eat tires for lunch. At nearly $100 per tire installed, I have used up a lot of petroleum and another $1,000 just on tires. I commute in the San Francisco Bay Area, mostly on freeways and some driving in San Francisco.

The car has averaged about 41.5 miles per gallon since I got it. When gas was $1.50 I could commute 50 miles a day for a whole week on slightly less than $10. It is twice that much now at $3.00.

The car is now out of warranty. At the urging of my wife we bought an extended warranty (another $700) because of the possibility of expensive technology failures. When the car was about 18 months old, and still under warranty, it just stopped running and lit up the computer screen like a Christmas tree. It cost me $70 to get it towed to my Toyota dealer, who gave it back two days later with this explanation: "It was a computer glitch. We just rebooted a computer and it ran fine. We have no idea what happened, and have done nothing to assure that it will not happen again. Toyota has no bulletins on this". Apparently, I am the only owner at my dealer to whom this has happened, and perhaps one of only a tiny handful of owners worldwide since Toyota knows nothing about the problem.

Fast forward to another 16 months when I try to start it in my garage, yesterday morning (Saturday 9/17/05). It started with the gas engine idling very roughly, then quit running and lit up the computer screen with warnings again. I ran some errands in my other car, and then called the dealer. They say bring it in and we'll see about it maybe on Monday. I tell them I have the extended warranty, but you must pay the dealer $100 to run a diagnostic on it, then they call the warranty provider to see if the problem is covered. If not, I may just donate the car for a tax deduction. There are at least 6 major computer systems on this car that can fail. The cost of repair is prohibitive.
If the dealer says it is not covered, and it is related to some computer failure, I will suggest as calmly as I can, that it should be covered by Toyota's original warranty since it turned up at 20,000 miles and neither the dealer nor Toyota made any attempt to correct whatever caused the failure (some unknown computer glitch?) at that time.

Perhaps Toyota has perfected this technology in later models, which speaks to why you should never buy early new models. Of course the 2004, 2005 models cost at least $6,000 more than the 2002, if you could get one, and you had to wait at least 7 months in this area.

Sure, it is a green car, and for the most part I like it. It has plenty of room for 4 adults and one smaller adult or child. The trunk is roomy, fit and finish is good, the standard A/C, sound system, power doors/windows/steering/brakes have been faultless. The gas mileage is very dependent on whether you are going slow on city streets so that only the electric motor is working. If you stay at 55 or below on freeways you can probably get 50 mpg, but for the way I drive I am OK with 41.5 mpg, especially factoring in going up and down hills in San Francisco.

What would keep me from recommending this car until the technology is perfected is the two (2) unexpected failures that caused the car to shut down completely. Fortunately, neither happened in the middle of nowhere at night when help would have been hard to get. For what I have spent on this car to date I could have bought two (2) Toyota Echos and paid for gas. The Echo is not as nice, but for a 1 hour commute, and then parking all day, all I would need is an upgraded sound system. Slightly more pollution from the Echo, but way better than most of my neighbors in their SUV's. Before you buy a hybrid, read some expert reviews on the technology to make sure you don't have some huge repair bills when the 36 month/36K mile warranty runs out.

UPDATE 5/17/09): I still have this car with 86,000 miles on the odometer.  It has gone through several more sets of tires, but nothing else has gone wrong (oops, I shouldn't have written that since there is no "wood" for me to knock).  My dealer tells me a few of the Prius's they work on have over 150,000 miles on them using the same batteries.  I still have my original battery pak and the car battery.  Still getting 41.+ miles to the gallon, but my wife now uses it for everything.  The car gets no rest.
Amount Paid (US$): 20,000
Condition: New
Model Year: 2002
Model and Options: Standard only