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The person who wanted to buy a new car, she gets 17mpg city/21mpg hwy, so around 19mpg combined and she wants to go to a car that gets 30mpg combined and she drives around 20k a year. At $4/gallon, she would save $1,540 a year. With the cost of buying a new car, higher cost of insurance for a new car, taxes, it's not worth it.
If you're buying a cheap car that gets good gas mileage, than it could be worth it. But a new car? Hardly worth it.
Actually, I drive well OVER 20K a year with 95& of my driving being highway driving. The car I'm buying actually gets 37 mpg on the highway and I know it will be higher on cruise control. In my SUV, I only get 21 mpg on cruise control. And I'll be moving back to NY where gas is well over $4 a gallon. My car insurance won't increase. It will actually decrease.
I get a new car every 5-6 years because I rack so many miles and cars start having things go wrong with them. I'd rather pay a loan and have my car than a car repair bill and a rental while it's fixed. Been there done that. No thanks! I make several long trips each month. Some trips are all the way to New York and Cape Cod. I can't have a car breaking down in that middle of those trips.
Again there are other reasons I have for wanting a new car not that it's any of your concern since you're not paying for it. Why are you so hung hung up on this? You aren't paying for it so what's it to you? Our economy needs people to spend money. Maybe to you this is a frivolous purchase, but when did you become my accountant?
Actually, I drive well OVER 20K a year with 95& of my driving being highway driving. The car I'm buying actually gets 37 mpg on the highway and I know it will be higher on cruise control. In my SUV, I only get 21 mpg on cruise control. And I'll be moving back to NY where gas is well over $4 a gallon. My car insurance won't increase. It will actually decrease.
I get a new car every 5-6 years because I rack so many miles and cars start having things go wrong with them. I'd rather pay a loan and have my car than a car repair bill and a rental while it's fixed. Been there done that. No thanks! I make several long trips each month. Some trips are all the way to New York and Cape Cod. I can't have a car breaking down in that middle of those trips.
Again there are other reasons I have for wanting a new car not that it's any of your concern since you're not paying for it. Why are you so hung hung up on this? You aren't paying for it so what's it to you? Our economy needs people to spend money. Maybe to you this is a frivolous purchase, but when did you become my accountant?
I'm just expressing my point of view that it's not smart to buy a new car after few years. Economy does need people to spend money so the spenders keep getting poorer and the rich keeps getting richer. Rich people have their money work for them by investing. It's as simple as that.
I'm going to now ramble so my apology in advance.
There's a reason that gap is widening between the rich and the poor. We're told to believe in consumerism of needing to spend money to keep our economy moving. Who provides the consumer goods? The rich people do. They understand that in order to succeed in this country, you have to have your money work for you and have others spend it. So, they do a very good job of everyone else spending their money so they reap all of the benefits.
In order to save $4,000 in gas with high mpg(let's say 50mpg) to middle mpg car(let's say 30mpg car) at $4/gallon, you would have to drive 75,000miles a year.
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Actually, since someone mentioned an SUV, I was working the numbers on 15mpg(middlin' for a ute) on the current large Ute vs 30mpg(high for a ute) on something new(I think these numbers represent many more of the vehicles on the road compared to a 30mpg vs 50mpg showdown). We drove 30K miles last year...15mpg = 2000gals @ $3.50(last 12 months avg)= $7000
Buy the new vehicle: 30K miles @ 30mpg= 1000gals X $3.50 = $3500
(We're in between, by the way, in our actual vehicle...Volvo XC60)
Run that out for the 4 years of warranty coverage, factor in the NO COST of scheduled maintenance and road-side assistance and the peace of mind of a road-worthy vehicle for your family to drive along desolate stretches of I-26 on the way to Charleston and there you go!
I'm pretty sure we've done an okay job of investing and having our money work FOR us...that's one reason we can purchase a new vehicle every few years.(And, no, we are not 'rich'...whatever that means. )
AND, if we let Volvo fly us over to Sweden next year to replace our then 4.5 year-old XC with a new one(to celebrate my 'zero' birthday next summer), who are we to say "NO" to a discount on the car and free airfare and hotel stay and tour of the factory? I've never been to that part of Europe and wouldn't mind a nice vacation abroad, driving our new wagon through areas I've only seen in pictures or on a map or in a movie or on the computer or in my dreams.
Actually, since someone mentioned an SUV, I was working the numbers on 15mpg(middlin' for a ute) on the current large Ute vs 30mpg(high for a ute) on something new(I think these numbers represent many more of the vehicles on the road compared to a 30mpg vs 50mpg showdown). We drove 30K miles last year...15mpg = 2000gals @ $3.50(last 12 months avg)= $7000
Buy the new vehicle: 30K miles @ 30mpg= 1000gals X $3.50 = $3500
(We're in between, by the way, in our actual vehicle...Volvo XC60)
Run that out for the 4 years of warranty coverage, factor in the NO COST of scheduled maintenance and road-side assistance and the peace of mind of a road-worthy vehicle for your family to drive along desolate stretches of I-26 on the way to Charleston and there you go!
I'm pretty sure we've done an okay job of investing and having our money work FOR us...that's one reason we can purchase a new vehicle every few years.(And, no, we are not 'rich'...whatever that means. )
AND, if we let Volvo fly us over to Sweden next year to replace our then 4.5 year-old XC with a new one(to celebrate my 'zero' birthday next summer), who are we to say "NO" to a discount on the car and free airfare and hotel stay and tour of the factory? I've never been to that part of Europe and wouldn't mind a nice vacation abroad, driving our new wagon through areas I've only seen in pictures or on a map or in a movie or on the computer or in my dreams.
I used 50mpg vs 30mpg since you said high mpg to middle mpg. Even if you work out the numbers with 15mpg to 30mpg and driving 30,000miles year, your break even point is still at least 4 years. Since SUV's driven 30,000 miles a year, by the time of the trade in, it will have over 100,000 miles and the trade in value will be less than $10,000 for sure. If you're buying a vehicle with 30mpg(it will most likely be compact SUV or mid-size sedan), it will set you back $24,000. So, you would need to come up with $14,000. With saving $3,500 in gas, it will take you 4 years to make it up and that's if you continue to drive 30,000 miles a year. Also, this does not count the higher insurance, property tax, and finance cost.
I'm all for people trading in their gas guzzling SUV for used high MPG cars that's less than couple of thousand dollars more than your trade-in value. Then, you'll start saving money almost right away.
However, my opinion is, if you're financing a brand new car to save on gas, you're not really saving money.
[quote=Bummbull;24058833] With saving $3,500 in gas, it will take you 4 years to make it up and that's if you continue to drive 30,000 miles a year. Also, this does not count the higher insurance, property tax, and finance cost.
/quote]
So, you could spend the extra $3500/yr on petrol and not save it? That's nothing to sneeze at. Also, our TOTAL insurance bill on $90K worth of vehicles(two people, two vehicles..a 2010 and a 2011) is only $1100/yr. Insuring a newer vehicle is not significantly higher than one that is a few years old(unless you are dropping collision because the value of the vehicle is so low). The property tax(even in Atlanta where I considered it to be a complete rip-off) was still only $450/yr per vehicle...that $3500 savings is looking better and better.(BTW...NO property or ad valorem tax per se here in Texas...$70 total tag renewal fee per vehicle we own). AND 1.49% financing is readily available to purchasers with good credit...we're not talking about credit card rates here.
So, somebody trades the gas guzzler in, gets 10 grand toward the $25K purchase, finances 15K @ 1.49% or less, saves the $3500/yr in petrol, doesn't have to worry about unforeseen repair bills, has the latest in safety equipment, roadside assistance and a safe, roadworthy vehicle...works for me . Maybe they will keep THIS vehicle for 10 years and keep reaping the petrol savings all the while. That $3500/yr savings will make a lot of car payments. Your approach was certainly more effective in the 'old days' of 14-18% finance rates, 12/12 warranties and $1/gal fuel, I'll admit. Of course, it never hurts to evaluate driving habits( and driving record ) to realize even greater fuel savings by consolidating trips, maintaining the vehicle systems and tires, running the proper octane rating for the vehicle, etc, etc.
With saving $3,500 in gas, it will take you 4 years to make it up and that's if you continue to drive 30,000 miles a year. Also, this does not count the higher insurance, property tax, and finance cost.
/quote]
So, you could spend the extra $3500/yr on petrol and not save it? That's nothing to sneeze at. Also, our TOTAL insurance bill on $90K worth of vehicles(two people, two vehicles..a 2010 and a 2011) is only $1100/yr. Insuring a newer vehicle is not significantly higher than one that is a few years old(unless you are dropping collision because the value of the vehicle is so low). The property tax(even in Atlanta where I considered it to be a complete rip-off) was still only $450/yr per vehicle...that $3500 savings is looking better and better.(BTW...NO property or ad valorem tax per se here in Texas...$70 total tag renewal fee per vehicle we own). AND 1.49% financing is readily available to purchasers with good credit...we're not talking about credit card rates here.
So, somebody trades the gas guzzler in, gets 10 grand toward the $25K purchase, finances 15K @ 1.49% or less, saves the $3500/yr in petrol, doesn't have to worry about unforeseen repair bills, has the latest in safety equipment, roadside assistance and a safe, roadworthy vehicle...works for me . Maybe they will keep THIS vehicle for 10 years and keep reaping the petrol savings all the while. That $3500/yr savings will make a lot of car payments. Your approach was certainly more effective in the 'old days' of 14-18% finance rates, 12/12 warranties and $1/gal fuel, I'll admit. Of course, it never hurts to evaluate driving habits( and driving record ) to realize even greater fuel savings by consolidating trips, maintaining the vehicle systems and tires, running the proper octane rating for the vehicle, etc, etc.
"So, you could spend the extra $3500/yr on petrol and not save it?"
You can't just say that line and include the face smacking itself without including everything that I said. I said it will take at least four years to make up the difference, then your car will be four years old again. The person who was using this argument stated that he/she gets new car every 4-5 years. So, with that habit continuing, it's time to trade in that car again. Also, this was his/her first year and a half of driving over 20k miles/year.
Your argument is valid if the person decides to keep that new car for a long time, and that is the only time it is economically justified to buy a new car. But guess what, before you can find me one person who has driven a brand new car to dirt, I can find 100 people who buy new car and trades in for another new car after few years. Most people who buy new cars tend to want something new so they'll buy another new car after few years. Frugal people who keep their car for a long time and tend to be smart with their money and never buy a new car, but purchase a reliable low cost of ownership used car.
To save on vehicle property tax in SC one could buy a used car with very high mileage, then replace the engine with new one after registering it. Or buy a new car and before you register it replace the engine with a used engine with high mileage on it and keep the new engine in storage. ;-)) It's only a joke, not a serious advice.
Well that is funny.... but it is not only the mileage but the age of the car... I bought a '95 Lexus ES300 last year that had 47K on the odometer... OK I know what you are thinking but I knew the lady that was selling it and knew it was not turned back and had all the maintenance records etc... When I registered it, the clerk at the DMV asked "is this mileage correct" and I said yes with a big smile... with sales tax and other fees it was less than $400
You have to pay sales tax on the sale price $5,000
Just got my renewal for next year, total = $41.00 x (Lots)
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That's nothing to sneeze at. Also, our TOTAL insurance bill on $90K worth of vehicles(two people, two vehicles..a 2010 and a 2011) is only $1100/yr. Insuring a newer vehicle is not significantly higher than one that is a few years old(unless you are dropping collision because the value of the vehicle is so low). The property tax(even in Atlanta where I considered it to be a complete rip-off) was still only $450/yr per vehicle...that $3500 savings is looking better and better.(BTW...NO property or ad valorem tax per se here in Texas...$70 total tag renewal fee per vehicle we own). AND 1.49% financing is readily available to purchasers with good credit...we're not talking about credit card rates here.
. Maybe they will keep THIS vehicle for 10 years and keep reaping the petrol savings all the while. That $3500/yr savings will make a lot of car payments. Your approach was certainly more effective in the 'old days' of 14-18% finance rates, 12/12 warranties and $1/gal fuel, I'll admit. Of course, it never hurts to evaluate driving habits( and driving record
x (Lots)
