Do you drive a gas-guzzling car? You know the type. You measure gallons per mile not miles per gallon.
Gas prices aren’t $0.69 per gallon like they were when I was 16.
Now they are closer to $2.69 per gallon.
So you might be thinking about trading in your gas guzzler for a more economical car.
But does it really make sense financially to do that?
It depends on your personal situation but let’s look at some examples to help you.
Setting Up the 2 Scenarios
Let’s say you live in California.
I’m using California because their gas prices are the 2nd highest in the country at almost $3.00 per gallon.
That’s according to Gasbuddy.com.
Let’s also say you drive 15,000 miles per year. That’s not high and that’s not low.
Now for the cars. Pretend your current car gets 15 miles per gallon (mpg).
That’s about what my Honda Pilot gets.
But your looking at a car that gets 35 miles per gallon like a Honda Civic.
So out of all the variables, we only changed the miles per gallon.
This will give us a good picture.
What Do You Save In Gas Costs?
Ready for the results?
If you made the switch from a Honda Pilot (15 mpg) to a Honda Civic (35 mpg), you save $1,715 per year.
That’s $142.92 per month in gas savings.
Go ahead an cue the disappointing music ’cause that was a let down.
You would pay $3,000 per year in gas to drive the Honda Pilot and $1,285 per year to drive the Honda Civic.
I don’t know about you but I can’t find a decent car with a card payment of less than $142.
So if your Honda Pilot is paid off like mine is, it makes no sense in a normal scenario to trade it in because of gas costs.
When Would It Make Sense to Trade in Your Gas-Guzzler?
There are two variables that could make this make sense.
Gas prices and the amount of miles you drive.
In the Honda Pilot and Honda Civic scenario, you save $48.00 for every $1.00 per gallon gas prices go up.
So at $8.00 per gallon, you save $381 per month. It starts to make sense to switch at that point.
But we have a long way to go to get to $8.00 per gallon. That’s over a 150% increase in gas prices.
The other possibility is the number of miles you drive.
In the Honda Pilot and Honda Civic scenario, you save $10.00 more for every 1,000 miles over 15,000 you drive.
So if you drive 40,000 miles per year, you would save $380 per month making the switch.
But I bet if you drive 40,000 miles per year, your work is giving you a gas allowance.
Those are some lofty numbers to hit for the switch to make sense.
I know it’s tempting to trade in your car for one that saves you money on gas.
But most of the time it doesn’t make as much sense financially as you think.
Gas is just so inexpensive for the amount of energy it produces.
There’s a reason we still use it.
But if you’re already in the market for a new car, that’s a different story.
Get one that fits your needs but consider miles per gallon.
Do you have a gas-guzzler? If so, what kind of car is it?
Let me know in the comments below.
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