## Saturday, June 14, 2008

### Fuel Economy Websites

Thinking of getting a car with better gas mileage? Find out how much money you can save, click here

Update: Here's another website to help answer the question "Should You Trade in Your Gas Guzzler?" Thanks to Ironman.

At 6/14/2008 7:55 AM,  Ironman said...

Now, find out if replacing your current gas guzzler makes real economic sense once you factor in things like insurance, maintenance, car payments, etc!...

At 6/15/2008 2:01 AM,  OBloodyHell said...

> Update: Here's another website to help answer the question "Should You Trade in Your Gas Guzzler?

LOL. This is so simple, it's basic math:

a=#miles you drive per year (typ. 8k to 12k miles)
b=MPG of car you own
c=MPG of car you consider
d=remaining amount on your current auto loan, divided by the number of years left on it (i.e., yearly outlay for existing car). Include insurance, if relevant.
e=Final, delivered price, including interest, delivery charges, taxes, etc. (remember to include any costs associated with changing out your existing loan), divided by expected number of years of the loan (i.e., yearly outlay for new car) Include insurance, if relevant (may be higher or lower due to safety features or coverage requirements)

Assuming \$4/gallon gas. Adjust as you feel needed, Calculate:

Current yearly gas expenditures
X=(a/b)*4
Expected yearly gas expenditures
Y=(a/c)*4

Expected gas savings per year:
Z=X-Y

My guess is, this is going to be not much over a grand or two, tops. Probably a grand +/- 25%.

This is about what you get if you move from a 16mpg vehicle to a 30 mpg vehicle @10k miles per year.

So if

e-d is less than Z (and likely is) it's a stupid choice.

Gas consumption is a significant factor in the choice of a *new* vehicle.

It's rarely an intelligent factor in CHANGING your vehicle, because the headaches, time, and expense are far out of proportion to the operating expenses -- and you're typically adding onto your expense load, as well as the longevity of your obligation, itself of limited desirability.

This is much more significant if you are anywhere close to having paid off your car -- your total indebtedness is much, much lower than if you get a new one -- so nominally your savings over the course of the next five years (the typical time of a car loan) can be HUGE -- because over the next five years, you're going to pay out (e+Y)*5 instead of (say you have one year left on the loan), d+5X.

So your yearly expense is (d+5X)/5 instead of (e+Y). Chances are, the former is a much smaller number.

Yes, the older car may have slightly more repair expenses associated with it, but chances are, those are a small fraction of the yearly car payment. Those are typically in the \$2000 range, tops, for a 10ish year old car.