MPG Demystified: The costs of driving and maintaining a new vehicle are probably significantly higher than keeping your old one–for the first 12-18 years.
As we go about our daily lives, we rarely have the opportunity to step back and observe where our attitudes originate from. Cars sold in America over the past several decades have been a reflection of the massive land area which the country spans and the desires of consumers. These desires come in part from advertising, which seeks to insert the message that anytime is the right time to buy a new car. In the previous decade, the popular rage was the SUV. These gas-guzzling monsters boasted huge cargo space, factory-installed home theater systems, a tendency to be the victor in accidents, massive engines, massive emissions, and poor fuel economy. The instant that gas rose above four dollars a gallon in many parts of the country, consumers began feeling the pinch in their wallets and screaming for hyper-efficient cars. That pinch was temporary enough. But, the important thing to realize is that, if saving money is your immediate goal, then buying a new car should not be.
There is no perfect formula for deciding whether it is time to move on from your adored first car. After all, the number of variables for both the car you have and the car you want can be overwhelming: buying costs, insurance costs, maintenance costs, and operating costs are the major ones. The key is to sit down and write out just how much you anticipate your current vehicle to cost driving and how much the one you desire will cost.
Here is an example of how to plot the comparative costs of a vehicle. Let’s say you had a 1998 Ford Taurus (a large car, but an average-sized vehicle) and you wanted to buy a new Honda Civic or maybe a Toyota Prius for its fuel economy. Here is a side-by-side comparison of the vehicles, with.
Vehicle 1998 Ford Taurus 2010 Honda Civic 2010 Toyota Prius
Trim/Engine V6 3.0L Auto 4cyl 1.8L Auto 4cyl 1.8L Auto
Published in: Personal Finance