| Okay, so you want to say money on gas. There | | | | different, and much depends on how old a car |
| are any number of ways, but isn't a better goal | | | | you get and how many miles you drive. |
| to reduce the overall cost of transportation? Of | | | | Consider a new car that gets 35 miles per gallon |
| course it is. At the end of the day, we're | | | | and an older car that gets 27 miles per gallon. The |
| concerned about how much we spent to get us | | | | difference is 8 miles per gallon. Assume you drive |
| from one place to another, so there are many | | | | an average of 15,000 miles a year and gas costs |
| other factors to consider, not just the higher cost | | | | $4.00 a gallon. The new car will save you roughly |
| of fuel. | | | | $510 in fuel costs. |
| Have you thought about buying a new, more fuel | | | | How far does that $510 go toward higher |
| efficient car? Many have, but that probably isn't a | | | | insurance, registration, and monthly payments. If |
| good idea, especially if you don't drive all that | | | | you're lucky, it will cover 2 monthly payments and |
| much to get yourself to and from work. The new | | | | that's it. If you assume another 2 monthly |
| car has: | | | | payments worth of maintenance and repair on |
| - high monthly payments - for years | | | | the older vehicle, that still leaves you in the red by |
| - finance charges - for years | | | | 8 months of payments and all the other costs of |
| - much higher insurance premiums - for years | | | | owning the new car. |
| - high registration fees - for years | | | | The fact is that we are most likely to spend way |
| - little or no maintenance/repair costs | | | | more money on a fuel efficient new car, in an |
| What about a used car that doesn't get good fuel | | | | attempt to save money through better fuel |
| economy? Would that be a better value for your | | | | economy. It's often a false economy at best. The |
| money? The used car has: | | | | bottom line is easy to understand when we do |
| - higher cost of refueling | | | | the math. Indeed, we save fuel, but we aren't |
| - no payments - you pay cash | | | | saving money. |
| - lower insurance premium - liability only | | | | We need to stop distracting ourselves with a |
| - low cost of registration | | | | fixation on getting better fuel economy and start |
| - modest maintenance/repair costs | | | | focusing on spending less money. This is where |
| If you do the math, you'll probably find that the | | | | "the rubber meets the road" in terms of our |
| "cost of ownership" for the new car is more per | | | | personal finances. |
| year than the used car. Every situation will be | | | | |