4 neighbors bought new cars to save on gas. Is this a trend!

[daisy1234]

I went out for a walk this evening to find out that 4 neighbors went out to buy cars to save on gas...they traded in their current cars and probably lost sooo much on depreciation! One said that they were upside down by 8,000 and still made the trade to get better mileage. It just seems cheaper to drive what you already own. On th flip side is that I'd love to find a nice used sienna....maybe a neighbor can sell me theirs! I just missed the one down the street!

Oopps....sorry about the title...I meant for car to be cars!

 

[Cindy B]

I thought you meant that four people bought one car together.

It sounds like 4 new cars.

We personally won't do it for a few reasons: 1) Both cars are paid off- no payments or upside down issues 2) We drive so infrequently it would take forever for a break even point 3) DH fills his car once a month so the savings are inconsequential.

 

[Calliaz]

I went out for a walk this evening to find out that 4 neighbors went out to buy cars to save on gas...they traded in their current cars and probably lost sooo much on depreciation! One said that they were upside down by 8,000 and still made the trade to get better mileage. It just seems cheaper to drive what you already own. On th flip side is that I'd love to find a nice used sienna....maybe a neighbor can sell me theirs! I just missed the one down the street!

I've done the math and there will be little savings if you are trading in or selling a used car before its useful lifespan is over.

 

[neatokimmo]

My friend did that. She traded in her SUV for an Accord with 31 MPG. She is paying the same per month, just for more months. I guess if you are already making a payment then it doesn't matter.

 

[CarolA]

My neighbor did this, but she had a fairly old SUV that was paid for. Now has a Mazda 3 hatchback. (She needed room for her BIG dog)

If your car is older and heading for replacement anyway then I can understand it. Mine is 7 years old and when it goes in a year or two fuel economy wll be a top part of the decison (and I get very good mpg now!)

 

[Kellydelly]

I thought you meant that four people bought one car together.

.

Me too !

 

[a1tinkfans]

I went out for a walk this evening to find out that 4 neighbors went out to buy cars to save on gas...they traded in their current cars and probably lost sooo much on depreciation! One said that they were upside down by 8,000 and still made the trade to get better mileage. It just seems cheaper to drive what you already own. On th flip side is that I'd love to find a nice used sienna....maybe a neighbor can sell me theirs! I just missed the one down the street!

This is all over the news this week and the people in the "know" say, NO WAY. You save nothing because it will just take longer to pay off what you allegedly save in gas.
In the meantime, I guess if you have a loan and your payment does not go up or extend and you get Better gas mileage its okay. Seems like a long shot to me.
We have 2 suv's, no loans outstanding and despite the gas prices, I just have cut down on the "running" as much as I can and try to plan a bit better when traveling, what else can you do really!

 

[Cindy B]

My DH (economics major that he is) made a very detailed spreadsheet for his car, initial investment, gas cost, break even point, etc..

Even though gas prices have increased, he is still better off with his Ford EXPEDITION (read gas hog) than a new car. I think he came up with a figure of 7K in order to make a new car "work" for him.

Since he fills up once a month at approx $100 a tank = $1200 year.

It would take 5+ years (not quite six) to hit that point. If I am doing my math right, its a little over 5.5 years to break even for that 7k.

7K does not buy a new or used car. So for the meantime he will continue to drive his Expedition sparingly.

 

[Jeanne B]

Me too !

Me three!!

 

[Goobergal99]

I am planning on doing the same thing in October(coincidentally when my inspection is due ), although I am not that much upside down (more like $1100 by then) I just can't justify paying $55 a week to feed the beast and so I decided that I will downsize, probably be offered a rebate to make up the difference and most likely have a payment of about the same every month and since I planned on having a new car anyway for a long time... I will just deal with the payments.

The gas on the other hand, I can't justify anymore... So I am going from a 6 cylinder down to a 4 and will get used to the lack of power!

 

[ChristyJ]

Mid-May, we traded in our 2000 Toyota Sienna with over 100,000 miles that was paid off for a 2009 Toyota Corolla. We got a great amount for the trade in, plus 2.9% financing, making it a good deal for us. The Sienna was rounding the bend and needing new tires, brakes, bigger repairs coming up soon, etc. We needed a new car anyway, so it was a good move for us.

 

[tasha99]

I've thought about doing that (I drive a 1994 Subaru), but decided against it--even though my plan was to sell my car and buy one of similar value, just smaller. Instead, I got a bus pass from my boss instead of a parking pass. I've been on the bus for 2 days now and I actually kind of like it. My goal is to use a tank a month instead of a tank a week.

(Just an edit: My city's public transportation isn't nearly as good as Disney's but the wheelchair lifts on the buses are faster. I guess I compare everything to "at Disney World . . ."

 

[Princess April]

What's funny in my situation is that a few years ago my co workers were making fun of our 4 cylinder cars (at the time we both had Saturns... now DH still has his Saturn, I now drive a Jeep Compass, bigger but still a 4 cylinder non the less)... well back fast forward to today... they have large gas guzzling beasts that they have hefty payments on ... I wonder who is laughing now????

 

[shortbun]

Uh, seems like the goal MIGHT be to use less fuel. Ya know, lessen our dependency on oil. If they save money too, bully but I think your neighbors are being patriotic and enviornmentally responsible.

 

[EMom]

DH did it, but his "new" car was a 2004 costing $6000-ish, with under 40,000 miles that gets 30 mpg as opposed to his truck's 15 mpg. His work involves cost analysis and he can do spread sheets that will make your head spin. He even did alternate ones accounting for the cost of gas in 50 cent increments, to determine how long it would take the car to to pay for itself.

We paid cash, but he based the analysis on a loan. Meaning, the car will "save" us this much per month in gas expense, but what would the theoretical car payment on that car cost us? Turns out, the gas savings cancels out the car payment at about $3.50 a gallon. In other words, even with insurance, etc., the car is paying for itself. Now if it had been a brand new car, it would have been a different story.

 

[kaytieeldr]

But it appears the neighbors in the OP are buying new (2008/2009) cars. That one that's going to be upside down by $8,000 gets me. Understand, this is the middle of the night so my brain isn't necessarily working well, but (all figures estimates only)...
Gas = $4 per gallon
Old car = 20 mpg
New car = 30 mpg
600 miles (for ease) = 30 gallons in old car, 20 gallons in new car, aka $120 in old car, $80 in new car.
Owner will need to fill tank 200 times just to make the purchase financially reasonable. Never mind extra insurance costs, extra interest, sales taxes, excise taxes...

While shortbun makes an excellent point, it doesn't sound - based on the conversations the OP had with the neighbors - that these new purchases were made for any wider reason like reducing out dependency on foreign oil, but rather ONLY to save the drivers' money.

 

[HugsForEeyore]

Where I live, everyone still has Yukons and Suburbans. They are still everywhere on the roads. Not much has changed. As posters here said, everyone already owns these huge expensive cars and they would lose much more money trading them in. So the SUV still rules here. I don't care what the media says - here everyone loves SUVs and won't consider a vehicle much smaller - except maybe a large trendy "crossover" which all still look like SUVs to me!

 

[roliepolieoliefan]

I went out for a walk this evening to find out that 4 neighbors went out to buy cars to save on gas...they traded in their current cars and probably lost sooo much on depreciation! One said that they were upside down by 8,000 and still made the trade to get better mileage. It just seems cheaper to drive what you already own. On th flip side is that I'd love to find a nice used sienna....maybe a neighbor can sell me theirs! I just missed the one down the street!

Oopps....sorry about the title...I meant for car to be cars!

DH and I too don't understand this reasoning. We too are looking for a new vehicle but thats because the transmission went in our '97 Tahoe.

Yea the Tahoe was a gas hog but if we bought a new vehicle( prior to the transmission issue) to help save on gas , then we would have a payment and have to buy gas. The Tahoe was paid for. People confuse me!

And just for a side note I'm still looking at SUV's. I love them. If gas goes to $6.00 a gallon we'll just sit at home more.

 

[eclairemom]

Last year I got a new Rav4 and I am saving a lot on gas not nearly enough to make up the $250 extra per month I'm paying on that sucker but I really hated my Windstar and it was a gas hog costing over $80 to fill it up when I traded. Now a fill up is 1/2 that cost and last the same amount of time. DH is planning on buying a small motorcycle to save on gas it will get 70mpg which is WAAAYYY better than his Chevy Truck.

 

[Cindy B]

DH did it, but his "new" car was a 2004 costing $6000-ish, with under 40,000 miles that gets 30 mpg as opposed to his truck's 15 mpg. His work involves cost analysis and he can do spread sheets that will make your head spin. He even did alternate ones accounting for the cost of gas in 50 cent increments, to determine how long it would take the car to to pay for itself.

We paid cash, but he based the analysis on a loan. Meaning, the car will "save" us this much per month in gas expense, but what would the theoretical car payment on that car cost us? Turns out, the gas savings cancels out the car payment at about $3.50 a gallon. In other words, even with insurance, etc., the car is paying for itself. Now if it had been a brand new car, it would have been a different story.

Your DH sounds like mine. He did the same spreadsheets with cost increments as well. I think he stopped at 6.50/gallon! He also made spreadsheets based on loans instead of cash as well-- even though we would pay cash also.

Your purchase is wise-- it knocks off all the initial depreciation.