new car payment.
What I'm asking is, if one has a vehicle that's paid for, and is costing very little to maintain, but equals about $50/tank fill-up, averaging $200/month; is it worth trading that particular vehicle for say a new Toyota Corolla = $15k just for better gas mileage??
I'm helping a friend decide this very situation, my logic tells me that the truck's monthly gas bill is about equal of a new car payment, probably less actually, and he's only paying $75/month for insurance for that same truck. Whereas if he gets a new car, insurance and the payment could equal more then his monthly gas bill.
FWIW - he does use the truck for what it's designed for at least 75% of the time. Would like your guys opinion on what you would do?
As I personally don't see any logic to it - if he was still making payments on the truck I could clearly see trading it for a cheaper vehicle; as his monthly gas bill and payment together would definitely justify trading it.
Need financial opinion: paid off truck versus
- Thread starter Ramblin Fever
- Start date
- Status
The math almost never works in favor of buying a new car. With the additional insurance, taxes and payments plus the fact that you're only saving money on the DIFFERENTIAL of the vehicles' gas usage, it just doesn't make sense.
Let's see, if your Corolla gets 3x the fuel economy as the truck you are going to spend $67/month for fuel instead of $200.
However, at zero % APR, $15K for 60 months will cost you $250/month.
I doubt there is any zero percent money on a Corolla, so payments are probably closer to $300/month, minus what you might get in trade or in selling the truck.
Just for giggles, let's say you get $5K for the truck. So now you are looking at spending $200 /month on a car payment, and $67/month for fuel.
You are already $67/month behind.
The only way I'd do this is if you can trade the truck even up, or close to even up for the Corolla.
The biggest cost of driving for most folks is not gas, but the vehicle.
It's almost always cheaper to keep driving what you have.
Of course, your mileage may vary, LOL.
Actually, I recommend the corolla. I have a Geo Prizm, which is a Corolla with the Chevy badge.
Buy one used for $2500 like I did, and drive it when you don't need the truck.
It's hard to see any savings with a new one, but used, yeah.
Have a nice truck and a beater car, or vice versa. Frankly, I tend to find the best value for my daily beater, and have a nicer ride for those days I'm not working.
I may look for a $500 to $1000 truck, just for those homestore runs, gas for the lawnmower, etc.
But that's just me.
If he needs a truck 75% of the time, is it even a consideration?
I have an economic analysis spreadsheet that I made for comparing vehicles. I recently compared my buddy's '88 Dodge Ram 1/2-ton to a new Toyota Yaris, and the Ram came out way ahead. A used car would have fared better, but it's tough to get rid of the truck you've relied on for 18 years for someone else's used vehicle!
I hear ya, and I couldn't imagine trading in a reliable truck for someone else's used car with potential issues that could amount to more then the $200 in gas.
I cringe at the visioning of plywood in a car. I can remember years ago when we had an '83 Honda hatchback 3-door car, mind you with 180k+ miles, old tires, shocks, etc. we managed to get about 500# of 6' cedar fence posts in the back of that car - course they hung out quite a few feet, and the rear of that car kind of drug on it's tires.
But we made it! Would "I" do it again?? ![[SPAZ!]](/forums/graemlins/spaz.gif)
JHZR2
Staff member
Yeah, if he NEEDS to use the truck, what is the issue???
Particularly if he doesnt have the money to pay for the corolla ourtright.
I own four cars (well, one is a pickup truck) I use whichever is best suited for the application at hand. Why? I paid for all outright, I enjoy tinkering on them, I have excellent insurance rates, and like to own them. My choice, bu it works well for me.
The econbomics of owning only a truck is usualy quite poor - unless you need to use it, which in the inbstance you cited seems to be the case. Otherwise, it is merely a choice, which everyone is free to have, but is not ecessarily the most socially responsible.
If I was in that situation, Id keep the truck, since it seems that it is really needed... and then either save and trade up for a higher efficiency diesel model, or else save up and buy a stripped, crank windows and AC only type corolla to use when the truck just isnt needed. No point in taking a loss on the truck if it is necessary and works well - but having a second vehicle will let one reduce wear on the truck, extract efficency when the truck isnt needed, and have a spare.... Only an individual's driving circumstances themselves, with the supporting maths can decide if it is truly worthwhile. And its not always just a dollar calculation.
JMH
usually the depreciation on a new car is greater then the gas savings over two years.
the only real reason to buy a *new* car is that you want a new car, financially it never works out.
If you need a truck, you need a truck and will be disapointed with a car. If you don't need one and could possibly see some issues withthe truck down the near road then I could see how a small car would be feasible. You would have to burn alot of gas to justify the cost that way. I have a 2003 dodge cummins which I get about 18mpg with. Since fuel has went up over $2.50 a gallon we just use the wifes 2000 malibu for everything unless we NEED the trck for some reason. My truck pretty much takes me back and forth to work now. I enjoy driving my truck much more than here car but you got to cut costs where you can sometimes.
I would definately keep the truck. It is paid for and he needs it. He will be wanting a truck again really soon if he sells it.
If he wants something efficient, he should look into a cheap second car. Something only $1500 or so that gets good gas mileage, and that he could just have liability insurance on.
Definately keep the truck. Having no car payments is a wonderful feeling. I used to trade trucks every 3 years- as I've gotten older I've realized how foolish that was/is.
quote:I second that opinion, in this case if thats to be his dependable single vehicle. But here is what I did with my second vehicle. I had an old 95 3/4 ton chevy truck second vehicle that I sold, but still needed a truck. So I bought a beater 77 1/2 ton chevy truck for $700. It gets about 16mpg, compared to the 14 on the 95 model. I can buy alot of $3.25 gas on the pocketed money difference between the two trucks sale price, much less, the gas saving on the 2 mpg difference. Figuring about 11,000 miles can be driven on the price difference alone. Only downside is that I almost prefer to drive that old beater truck to the Liberty that I am still making payments on. This doesnt make sense.......
Originally posted by Schmoe: Keep the truck, car payments still buy a lot of gas.
quote:
Originally posted by rusty 63 model:quote:I second that opinion, in this case if thats to be his dependable single vehicle. If he needs a truck 75% of the time, there is no question in what to do. Maybe he needs a second vehicle, like an old Honda or Geo. Here is what I did with my second vehicle. I had an old 95 3/4 ton chevy truck second vehicle that I sold, but still needed a truck. So I bought a beater 77 1/2 ton chevy truck for $700. It gets about 16mpg, compared to the 14 on the 95 model. I can buy alot of $3.25 gas on the pocketed money difference between the two trucks sale price, much less, the gas saving on the 2 mpg difference. Figuring about 11,000 miles can be driven on the price difference alone. Only downside is that I almost prefer to drive that old beater truck to the Liberty that I am still making payments on. This doesnt make sense.......
Originally posted by Schmoe: Keep the truck, car payments still buy a lot of gas.
OK fellers, I know I just edited that previous post the wrong way. I'm bad.
One of the variables that we don't know from your information is the value of the truck.
I decided a while ago that, despite living on an acreage and hauling lots of stuff, I would be money ahead with a car. I have a 4X6 enclosed utility trailer that I use for my hauling, pulled by a 2005 Subaru Outback. I can haul nearly everything I used to haul with my 94 Dakota with my utility trailer and still get 28MPG doing it.
If I have to haul something too large or heavy for the trailer or car, then I simply rent a U-Haul for a day ($20), rent a Lowes truck for a day (about $20), or have it delivered ($35 to my place from Menards).
I bought my full-size truck at below blue book almost two years ago. BB value now at par. Plus IRS deduction for any business use has kept my true cost-per-mile low.
Less than if I'd bought a new hybrid AND rented when needed, (as projected over a five year/60,000 mile span). I go from periods of inactivity to non-stop activity.
One really needs to do all the homework. Gasoline costs are really not the issue. Safety, utility, reliability, insurance and depreciation mean more.
I'd rather drive a car. But that day is yet a ways off.
Any of you ancient fellers remember the great gas crisis of '74?
That's 1974 you young whippersnappers.
I vaguely recollect the various articles in car magazines and elsewhere ridiculing the high prices asked and paid for for econoboxes.
Folks were selling their HUGE Detroit iron machines for little money and paying top dollar for those generally cruddy, rust-away in a day, hard-to-find-parts-for, tinny cheap Japanese cars or...... )))))))shudder((((((( a Vega!!!!!
Eeeeeeek!!!!!!!!!!!!!
Well, the articles consistently mentioned that viewing the situation logically that it would behoove the then-typical car buyer to buy the inexpensive gas guzzling land yacht and use the savings to pay for the gas. It would take several years of ownership even with a poor mpg land yacht to equal the cost of a new gas sipping puny wimpy girly car.
- Status
