So, should I buy a different car?

Charlie posted a link to some controversial advice that it’s better to keep your car rather than get something more fuel efficient.

The advice makes a lot of sense when you do the math.I bought a fuel-efficient car in 2003. I had no choice; I had to buy something. My lease was up and I wasn’t going to buy that car. So I figured I should buy something really fuel efficient and reliable, so I bought a year-old Honda Civic. I’m still driving it today and it’s been a great car.

Now let’s say I’d bought something less fuel efficient, like a Hummer H2, that gets 14 MPG. If I drove that to work every day, I’d burn 29 gallons of fuel per week, and I’d be hurting. With gas at $3.53 a gallon right now, that would be $102.37 per week, which is ridiculous.

So let’s say I had my eye on a 2005 Hybrid Honda Civic priced at $17,000. It gets about 45 MPG. So it would burn a reasonable 9 gallons per week, at a cost of $31.77. The car would save me a cool 70 bucks a week.

It would only take 243 weeks for that car to pay for itself. In other words, not quite five years.

Of course if I traded in the Hummer, I wouldn’t have to pay the full $17,000. If I could manage to sell that H2 for the $18,000 a used Hummer H2 is supposedly worth, then it would make sense to do it. If I could get $10,000 in trade for it, it would take two years for the hybrid to pay for itself. That’s still worth doing, but it’s probably longer than you would expect.

This is proof that buying a car is often an emotional decision.

To make it a logical decision, you need to figure out what you’re spending in gas per week, then figure out what you’d spend driving something else. Subtract the difference, then divide the cost of the car by that savings.

This was a big reason why I bought a conventional Civic rather than some kind of hybrid back in 2003. I would have paid about a $7,000 premium for the hybrid. It probably would have paid for itself, barely, by now. But at the time I made the decision, gas cost less than half what it costs now.

In some cases, it would make sense to switch. But you have to be near the extremes (such as from Hummer to hybrid) to do it. The further you get from that kind of extreme, the less sense it starts to make.

Don’t let a salesman or what the neighbors say sway your decision. Do the math.

7 thoughts on “So, should I buy a different car?

  • August 10, 2008 at 8:11 pm
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    In doing the math, don’t forget ALL the costs. Some of the the big ones, of course, are obvious – purchase and fuel. Interest charges sometimes get buried, but they’re a big one as well. If you MUST finance it, it’s usually better to get the finance somewhere else, rather than to accept the package the dealer is pushing and getting commission on.

    Don’t forget the other costs to keep it on the road. They can vary a lot, even between vehicles that cost the same – consumables like oil and tyres, registration or whatever you call your variation of the government charge to allow it on the road, insurance, service, parts. In particular, whether there are generic parts and service available, or whether there’s nothing else but name-brand.

    • August 10, 2008 at 9:38 pm
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      Those are all good points. Usually it’s possible to dig up an estimate of the yearly cost of ownership of a particular vehicle, and that’s worth doing.

      What I found was that parts and service for my Honda are more expensive than for the Dodges I drove since I was 16. Shocks and struts for my Civic cost almost 3x as much as they cost for my 1992 Dodge Spirit, for example. But the Honda spends less time in the shop and gets better fuel economy, so it still costs less to drive than my Dodges did.

      And I don’t know if all Dodge parts are necessarily cheaper than Honda anymore. When I had to buy tires for my 2000 Dodge Neon, there was one Goodyear tire that fit, period. And it cost more than $200. When I bought tires for my Civic last year, I could have spent $60 per tire if I wanted (not a good idea), $300 for a premium brand’s top of the line, or pretty much anything in between.

  • August 11, 2008 at 8:13 am
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    Of course, with a hybrid, you’d be burning less of a finite natural resource, and putting less CO2 into the atmosphere (along with fewer, other pollutants). Less than even the admittedly quite decent, regular Civic.

    So perhaps overall impact on the world as a whole should factor in to total cost – tho’ how you’d compute a cost for some of this could be problematic.

    Problematic, but well worth doing 🙂

    • August 11, 2008 at 8:29 am
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      Well, I think from memory it takes something like 18 years (well, many many years anyway – depends on the vehicles compared, obviously) of running a new more efficient vehicle to overcome the damage done by manufacturing it, compared to the minimal damage of adopting a conservative (conservationist) approach and keeping an older vehicle on the road. Obviously, the best thing to do is find an old diesel VW Rabbit that’s been owned by a little old lady who only used it to run to church and shopping on alternate Sundays since it was purchased. If you know where there’s one of those in right-hand drive, please let me know.

    • August 11, 2008 at 9:39 pm
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      If I were buying today, I might very well get a hybrid, but at the time I couldn’t do it. That proved the right decision, as my finances actually got worse for a while, and I might not have been able to afford the payments. One of the things that got me through those times in between jobs was not having a car payment. Plus, in 2003 there were more questions about hybrid technology than there are now.

      Getting a fuel efficient car, driving it sensibly, and driving it as long as possible seems like a good compromise.

      • August 12, 2008 at 8:37 am
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        Absolutely agree (with you and Don).

        I remember reading an article recently about a mechanic (back East, I think), who combs eBay, etc… looking for that old, 3-cylinder model of the Geo Metro. He fixes them up and sells them to folks who then get 40-50 mpg.

        Yeah, they’re not terribly well-built, have a stick shift, and no A/C – but get roughtly the same milage as a new Toyota Prius…

        • August 12, 2008 at 8:26 pm
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          I’ve seen the same article. I think lots of people are doing that, because all of a sudden I see a lot of Geo Metros, Honda CRVs, and other old cars that got 40-50 MPG. I can see buying a Metro or a CRV to use as a commuter car, if the math works.

          The parking lot at work used to be mostly pickup trucks, Suburbans, and other large vehicles. Today I see a lot more compact cars than I ever did, including older Civics and Corollas. And although that may not necessarily help the pocketbook, it certainly is better for the environment and for society, and it has something to do with why gas prices retreated from $4.

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