Many people are still driving the 15 or less mile per gallon gas hogs. That is real sad. I understand some of us still need the gas suckers. I do flea markets, farmers markets, yard sales and auctions as part of my way to generate funds to survive on disability pay. I hardly ever buy anything new. Especially furniture and cars. Many people who are poor can not afford to pay the price for an economical car, I know it is hard but they really can not afford to keep driving the gas hogs either. I am currently looking for something that gets at least 30+ MPG for myself. It has to be in my budget. The thing is that it will pay for itself in a short while. I did the math and if you drive 10,000 miles per year and by a 40 MPG car it would cost you $875 That is at gas prices of $3.50 a gallon. If the price of gas goes to $5.00 the cost jumps to $1250. That is compared to a cost of $2333 and $3330 respectively for the 15 MPG car. A savings of between $1456 dollars and $2080 a year. Does that sound a little crazy well keep reading and I will show you how I figured it out.
If you have a 15 MPG car and drive just 10,000 miles per year, which is only 192 miles per week. You will spend $2333 per year at $3.50 per gallon. If the price hits $5.00 the cost to drive goes up to $3330 per year. If you run that out for five years which is what it usually takes to pay off a new car the total is $16,650 and that is with no payment, not figuring in insurance or maintenance like oil changes and a total of 50,000 miles over five years. Over the same period and the same 50,000 miles a car getting 40 MPG would only spend $6250 on gas. That would be a savings of 10,400 dollars. Most people would consider that a good sized savings.
Just to put it in perspective. If you are one of the people who drives for a living. Maybe a paper carrier or some other job where you drive a lot the amounts becomes staggering. If you drive a 15 MPG car for 5 years and put 50,000 per year or a total of 250,000 miles on it, it will really pay to move to a cost saving car. If you don't it is going to cost you $58331 over five years at $3.50 per gallon and if it goes up to the $5.00 mark the cost will climb to $83,325.00. Those prices are just for the gas with no payment.
So how much can you really save? I was looking at the Ford Fiesta and the price was $240 a month. Full coverage insurance was $100 a month. So an annual cost of $4080 or a five year cost of $20400. If gas stays at the $3.50 mark the fuel cost would be $21875 over five years. That would be a total cost of $42,275 and if it went to $5.00 it would be at a cost of $51650.
At the end of five years you will have paid $42,275 or a savings of $16056. That savings will buy another $14400 Ford Fiesta and you will have change to boot. If fuel goes to $5.00 you will have a savings of over $31675 dollars. Remember these prices included the car payment and the car insurance as well as the gas. The cost for the 15 MPG car did not include insurance or replacement costs of a new cars.
Even a 30 MPG car driven 25,000 mile per year, over a five year period would save the owner $14, 583 which would cover the cost of the car but not insurance and gas. Each person will need to figure out what works for them. read some of my other blogs to get an idea of the cost.
So you can save way more than the price of a car if you switch to the better gas mileage car. In essence you will get a free car. Or more money in your retirement account. The decision is up to you. Can you really afford to keep driving a gas hog? If you would like to figure the cost of driving your car and know the miles per gallon of the car you are interested in my blog on The Cost of Driving from 10/28/11 has a chart that will give you a cost per mile to drive your car.