Consider too that if you own your car outright with no loan, replacement will involve a new auto loan with monthly payments added on to your fuel bill. My advice is to buy a decent car, pay it off, and drive it until you can't get parts. My step-son is driving a 1988 Ford Tempo that I bought new. My TCO for that car, excluding fuel, oil, and insurance, but including tires and everything else, is still well under $15,000. That works out to less than $750 per year plus gas, oil, and insurance. Three teenagers have learned to drive in that car, and yes, it is a 5-speed stick.

We paid cash for a full size SUV 2 years ago. We recently looked at trading it in for a Highlander Hybrid. We would have had to write a check for $30k, you can buy a lot of gas for $30k.

I wonder how long it would take to chase the accelerating depreciation on your Escalade or Hummer.

Related question: how much would Jupiter weigh if it stood on a Black Hole?

I'd add, in seriousness, however, if you're already driving a car that gets reasonable gas mileage, you'd probably do better waiting until when you'd normally sell your car, rather than feeling pressured to by a hybrid. I'd think that throwing out a decent-mileage car would make the polar bears cry more than switching to a hybrid.

Ok, I own my 2007 Camry free and clear (I know my screen name is odd, but I miss my Silverado). I got the Camry to be more practical since I had a regular cab (no back seat) truck. The Camry is supposed to get 24 mpg city, but that is far from the case. My 4-cylinder is lucky to get 20 mpg and it is perfectly maintained on schedule. Here is the deal, I have really crappy credit. I have student loans and zero credit history, so my score sucks. Would it be better to just keep the car I hate and avoid getting slammed with interest on a hybrid? I usually go through one tank a week (15 gallons). Oh and before anyone asks, my mom bought the car for me cash from the dealer.

@Sudonum: And you wouldn't sell your current SUV? If it's only two years old, you can still get quite a bit for it. I'm not saying that makes it worth it to trade it in right now, but you certainly wouldn't have to put up $30,000 to get something new.

@chevychic55: Do you spend $416/month on gas? If not, that would be silly. That's what a $25,000 Prius would cost (estimated) spread out over a five-year loan.

On the other hand, you'll certainly get something for an '07 Camry. Let's say you get $15,000 for it (probably optimistic).

That would leave $10,000 that you'd need to sink into that Prius. Over five years, that's $166/month. Would buying that Prius cut your gas costs by that much every month?

If that's the case, you might want to go for it. If you're taking out a loan, it could be an opportunity to help build your credit score.

Only you know the exact numbers for sure. I suspect it's not worth it for you, but it might be worth investigating since your current car is so new, and you owe nothing on it.

I gave up a 2004 Chev 2500 Crew Cab that got at best 15 mpg for a 2007 Toyota Prius. I have already put on 22,500 miles. The last time I got gas I averaged 53.6 mpg. Best deal I ever made

@freshyill:
We paid $38k, and were offered $16k, they wanted $46k for a similarly equipped Highlander. We feel we could sell it ourselves for considerably more but we'd still have to write a hefty check for the Hybrid, that's even if we could find one right now. Local dealers can't lay their hands on one for love nor money.

If we could all just stay calm... Funny, when the news that Americans were actually buying less gas reached the Saudi's, their production increased. hmmm...that is a coincidence...

I'm not taking any hits of the hybrid bong for awhile.

A neighbor called about buying one a month ago and went in this month to find the price had climbed by $5,000 for no reason other than greed.

Thankfully my bike gets great gas mileage and my fat butt likes it too. Sort of.

Why are we asking this question? Bad substitutes for bad products are not a solution. Move, drive less, take a bike, a bus, train, etc. Forget replacing a vehicle with a vehicle! We need to talk RADICAL transformation here...

@imdgonz: Clearly we need better train service, but the fact remains that they'll never work for everyone. I go weeks without getting in a car, but I travel every few weeks, and renting a car is really the only option for me.

If you are doing this for the global warming nonsense, fine whatever. But if you are doing this for the financial benefits, I urge you not too.

As the dollar climbs back where it should be, gas will go back down.

Do your research on the hybrids and the Ethanol vehicles, as they can cost more then gasoline. For instance ethanol is 20% cheaper, but 20% less efficient then gas.

We got rid of our Subaru Forester right after Katrina. The better half got my Accord, and I got a Scion xA. Say what you want about my car, but it's a blast to drive, and it pushes 40 MPG when driven carefully. The good news was, we were able to sell the Forester privately for a decent price to somebody who lives in the Adirondacks and really needs it. I doubt we'd be as fortunate now.

@imdgonz: Move? You gotta be kidding. You want to talk about expenses? Moving is right up there with buying a new car, especially if you have to employ a Realtor to (hopefully) get your house sold in a timely fashion for a decent price. Lots of luck with that in today's housing market.

@Steaming Pile: That's what I think of every time someone talks about moving. The amount I'd have to pay in closing costs and commissions would buy my gas for 10 years.

my wife is on the prius bandwagon now. we have a 3 yr old Kia Sedona that gets 15 mpg around town and a 17 gal tank that costs over 75 bucks to fill.

Anyway, I told her she should settle for a 30 mpg car vs 40 mpg. I figured at 6.00 gas , 30mpg is 20c /mile and 40 mpg is 15c/mi, 5c mile difference. She drives 20k mi a year, so that's 1000.00. The 30 mpg car costs 20,000, the prius 30-35000. That's a lot of gas!

@Steaming Pile: I want to point this out for the people that suggest moving: I just bought a house for $113,000. According to the finalized contract I signed, the sellers only got about $50,000 of that after taxes and fees (including Realtor comission). LESS than 50% of the actual selling price.

I'm probably going to get flamed, but this is making me consider another Expedition. No, not as a daily driver... that's just wasteful. But they're so cheap now, I could buy one outright (no payment, and not brand new).

Plus as I've learned from my current, paid-for car, $4 gas is downright cheap when you don't have a car payment. At every cheap, high-mileage option I look at, I can't beat staying in my current car. It's also encouraging that it's on the Consumer Reports best used cars to own list.

I'm already considering my next new car when it's out in 2010, but even with the 43 mpg it will get, that's still the equivilent of $2 gas with my current car, and isn't it at $2 when we all started griping?

I just bought a 1995 Honda Del Sol to commute in. I am going from commuting in my Tundra @ 16mpg to now commuting in the Del Sol @40mpg. I paid cash for the Del Sol for $2000 with only 147,000 miles on it. I did this solely for the gas savings and nothing to do with the environment. This decision will start paying dividends in 8 months. I did not get rid of the Tundra as it is still needed.

It would take me 460000 miles for a switch to a Prius to be economically feasible for me. I think I might hold off for a bit (especially since I drive maybe 5000 mi a year)

Gas prices are obnoxious ..... but why panic and trade in your car?

Look at the issue from the point of $ increase per year. Remember a year ago the gas price and mileage for your vehicle was acceptable.

My gas bill is up $339 per year based upon 7000 miles annual at 20.6 mpg, assuming $1 per gallon increase in the past year.

My wife and I are just not in the market. She drives a 35mpg 2002 civic ex, and I drive a 45+mpg 1992 civic vx. both paid off.

However, I have relatives that are driving 25mpg vehicles every day, single passenger. They are seriously looking at 50cc scooters, since most of their driving every day is city streets. for them, moving from 25mpg to 110 mpg is really a substantial move, particularly when you consider our scooter driving season (like 9 months) and the price (under $2k). When you are looking at $15+ dollars a week in savings, it makes a lot more sense.

I've got a paid off 2006 Ford Ranger pickup (4wd extended cab with the biggest available engine, the 4.0L V6). I bought it new, it now has 27k miles on it. I do mostly local driving and have a lead foot, so I usually get 15-18 mpg.

I have no plans on dumping in it, but I keep debating if it's worth buying a second vehicle with better mileage for commuting. So far, I can't really make the numbers work - by the time I pay for another car, plus tags, insurance, registration, and maintenance on an older car, I can't imagine the gas savings would make up for it. I was planning on eventually buying a second car - probably a sports car - and I think I probably will still do this, but I'll probably focus more on mileage than fun when I do.

@chevychic55: You're only paying $160/mo for gas, plus another $100/mo or so for insurance? No new car is gonna beat that. Drive it 'till the wheels fall off.

Sorry, make that $240 for gas. Numbers still work to keep it.

Nobody is buying SUVs. Nobody. You can try and sell your slightly used one but you will take a huge hit. Even dealers aren't taking them on trades much. SUV owners and large pickup owners are 169% owned, boned and dethroned.

Can't afford to " downsize " a car. I can go with the bus option with monthly payments for unlimited mileage.

I especially love the giant SUV owners that are 10,000 dollars upside down on their loans when they try to trade them in. Not only do they have to keep the 600 dollar a month payments but it costs them over 100 a week to fill the things. Pure comedy at the gas stations these days.

I say wait a few years. With the research being put into alternative-fuel vehicles due to oil prices, we're bound to have more advances in this area. Hell, look at the XP Vehicles electric car. (myxpcar.com)

@chevychic55:

Random thought... Last summer my Miata started getting crap mileage (it's usually 28-30, more on pure highway tanks -- I managed 40 on one road trip last month). Anyway, it was getting about 20 over several tanks. I took it in to Mazda and it turned out that only one of the spark plugs had been attached correctly after a tune-up several months before. I hadn't noticed because I take the light rail to work and only drive once or twice a week. (I go through about one tank per month.)

Maybe the people who are maintaining your car aren't doing a good job. After the spark plug incident, I changed mechanics, and everything's been great since.

I'd have someone else do the next service and see if that changes anything. My 2000 Camry with a V6 got a pretty consistent 28 the four years that I had it.

@Sudonum: What. I cannot seriously believe people are paying 46k for a Toyota SUV. The choices for cars in that bracket are virtually endless. Hell, you might as well get the Lexus hybrid for that kinda coin!

What did you buy for 36 that's worth 16? That's nose bleed inducing depreciation.

@thinwhiteduke:
We looked at the Lexus, it's $50k and not as big as the Highlander (Highlander has 3rd row seating), and the Highlander has better mileage rating.

We got a certified used Escalade with 3000 miles on it. 100,000 mile guarantee. Any full size SUV is sucking wind in resale value now. Edmunds is stating a trade value of $23k and a private party sale price of $28k, certified used at $30k. The Toyota dealer was trying to hose us.

We got it for my wife to haul clients, family vacations, and towing a trailer. It's not that the gas is hurting us financially, we just hate giving any more money than we have to to the oil companies.

@chevychic55: Less than 20 mpg? Thats sad, but not unheard of, the 4 cylinder Accord is like 19 city. My old 89 Mustang with a 302 V8 Automatic got 22 on average... Its amazing (and a weebit shameful) that these modern midsize cars have such low city figures.

Scion isn't a bad car brand to look at. You can get a Scion tC (a.k.a. Toyota Celcia) for $17k. They aren't priced much above invoice. The trick is not to buy any accessories.

I have a Subaru STI that gets around 22 MPG. It's half way paid off and really doesn't make much sense to switch to a different car. Instead, I downtuned the engine and am getting around 28 MPG, but I also bought a $3000 motorcycle that easily gets 75 MPG, so I don't have to worry about wear and tear on my car. Works for me

@Trai_Dep: And generally the rule of thumb (rule of thumb, not God's own law!) for environmental friendliness has been to drive your car for 10 years, then get a new one (new new); that's the point at which technology has typically advanced that you'll do more good in terms of emissions and gas use than you'll do harm by "disposing" of a vehicle and demanding extraction of raw materials to get a new one.

I'm sure this number has shifted somewhat with the introduction of hybrids, but if you're driving a reasonably fuel-efficient sedan, you might look at that 10-year mark as the guideline for when a new car becomes financially and environmentally a good idea.

----

"In northern regions, consider using your SUV as a winter-only vehicle"

How about NOT? I mean, really, higher center of gravity = more SUVs in ditches. If the snow is THAT BAD that you need an SUV for clearance and traction, why are you driving in it to begin with? And for the TWO of you who actually know how to drive trucks in snow, shut up. You know I'm talking about the 99 million Americans who think an SUV is a car and drive accordingly.

@Eyebrows McGee:

I agree on the SUV comment. If the roads are that bad which a 4x4 is needed, then they should stay off the road until it can be plowed.

I've lived in northern climates all my life and got by fine with my RWD Ford Ranger and subsequently my FWD Pontiac.

If you know how to drive in the snow, you don't need an SUV. I, however, both know how to drive in the snow and have a big ass SUV with which I enjoy helping the idiots who don't know how to drive in the snow.

That said, the big ass SUV is all but parked 7-8 months of the year, and I ride a motorcycle instead.

So my blended average fuel economy is something like 30-32 mpg, which I can live with.

@WraithSama: They undoubtedly had an existing mortgage or two to pay off, in addition to fees, taxes, sales commissions.

I drive a hybrid Honda Insight, which weighs 1900 lbs, and gets amazing mileage, but a number of my neighbors drive modified diesel Mercedes that run on used vegetable oil. I believe there's a guy in Silverlake (in Los Angeles) that does the mods. There was a piece about it in the LA Times a while ago.

Whatever car you get, I think it's important to get one that has a working airbag. It was something that made me really nervous -- not having one, that is -- when I could only afford an old junker.

Also, for those who think they need a huge vehicle to haul stuff...if you only haul stuff a couple times a year, maybe it's cheaper just to rent a large vehicle then? Or borrow a friend's vehicle and take them out for a really nice dinner.

@Trai_Dep: Ha according to the never reliable KBB, it's saying trade in on my SUV is 2 grand more than the retail price I paid in March. KBB is so worthless.

@Eyebrows McGee: What a helpful rule of thumb. Thanks!
Although, cheap bast*rd that I am, I'll do a 10+2 years, since I'd sooner commit seppuku than take the hit to the wallet that new car drivers experience rolling it off the lot. :)

@thinwhiteduke: It must be hard for the KBB to keep up, and the car lots too.
I have a friend shopping for cars tracking Hummer prices in the car mags the past few months out of perverse curiosity. They retailed for around $60-70,000 in their glory days? Were going for $30K, trending towards $23-ish thou now. That's gotta sting.
The small or mid-sized ones are different, of course. Or larger ones for those that really need them. But around my parts, they're fashion statements. Like mood rings or super-baggy jeans were. Just as dated, but more embarrassing.

My 2003 Subaru Baja gets 28 highway, 20 in town, can carry just about anything and is paid off. I'm driving it until the wheels fall off. That being said, gasoline is never going down again. Four dollars this year, five the next, six after that and so on. In five years, think ten dollars a gallon, and that is a low estimate.

My car is the last direct internal combustion powered vehicle I'll ever own. By the time it dies (10 - 15 years) most present day vehicles will be cycled out of the national fleet from wear and tear and the odd accident.

True hybrids will be the way to go. They will store electricity for short trips and use chemical energy for long trips.

@Eyebrows McGee: How I can relate. I had a one wheel drive ancient F-250 that still got places one day while some SUVs were sitting on their door handles in the ditches. Black ice.....

Like my AWD for now, its full time and limited slip ALL the way around, side to side and front to back. So spoiled.

@balthisar: I've thought of getting one of those used for my business. Not for people but for tools and materials. Rip out the seats and the plush and it's a nice big truck for construction. But the way fuel costs are going, perhaps just a trailer for wood and paying for deliveries of large items.

I'm keeping my small SUV, thanks. It's rarely driven (24,000 miles in 3 years) and nearly paid off. But when I need the car, I need the car, which is primarily used to transport several people and a dog, with attendant luggage, on trips exceeding 3 hours in all varieties of weather. Commute is public transportation.

And to the guy who said that if you know how to drive in snow--I'm partially with you. I drove a two-seater toyota in upstate NY for several years. But this car is much easier in the snow. MUCH! And when some idiot who doesn't know how to drive in snow hits me, there is a much higher probability that I will walk away in my current car...

I agree you don't need a SUV for winters. I drove an FWD (front wheel drive, for non car geeks) Dodge shadow in Rochester NY, for 5 years, slow down, have good tires, use common sense (this is the most important tip in ALL driving), you'll be ok in all but the worst snowstorms.

At which point, if your job dosen't involve saving people's lives, stay inside. No one wants to come pull your SUV out of the snowbank.

BTW my 1999 Mazda Protoge LX 4cyl 1.6l (smaller engine) gets 25mpg in everyday driving with a K&N air filter ($50), with the A/C on in the city. If I make HWY trips I get about 32mpg.

You would have to give me a new car for it to make financial sense to switch to ANY new car as long as it keeps running reliably, it's paid for. What a great car it's been for 110K miles.

Crunch the numbers, people. I put everything into an Excel spreadsheet...how many miles I drive per year, current and projected gas prices, and my monthly/yearly fuel consumption.

My current car is paid for and gets about 26 city/30 hwy MPG. Turns out that I'd save $33 a month moving to a Honda Fit (35 MPG), and $60 a month moving to a Prius (50 MPG). Hardly worth a $400 a month car payment and the $3000 I'd instantly lose driving a new car off the lot. Since I only drive 10,000 miles a year, there's very little payoff in fuel savings moving to a smaller car.

Now if I were going to sell the present car *anyway*, then I'd probably buy the Fit. Although not as fuel efficient as the Prius, the price tag is $10,000 less. If I were going to have car payments anyway, the fuel savings would certainly help and might be a good hedge against gasoline prices going even higher.

So, unless you're in the market for the car, and unless you drive enough miles such that your gas bill starts to become a significant percentage of your car payment, don't bother running out and spending $26,000 on a new Prius. That's purely from a financial standpoint. If it makes you feel good, by all means...have at it...but running out and buying a new car isn't necessarily going to save you a wad of cash....quite the opposite.

@Trai_Dep: Oh, ditto. The other option is to figure "I'm buying used, those resources have already been extracted, so I can cut a couple years off waiting." (But then you miss some technology benefits.) But I'm so cheap about cars I'll wait the couple extra years too, just to not have to buy a new car! :D

@Jesse: "I've lived in northern climates all my life and got by fine with my RWD Ford Ranger and subsequently my FWD Pontiac."

I know, my husband's from the south and he TOTALLY INSISTS we require 4WD and large urban assault vehicles to drive in snow. I'm like, "Butthead, I learned in an Oldsmobile Cutlass Ciera and we're a lot safer in our little low Focuses than in giant, flip-prone SUVs. Especially you, since you seem to have yet to have grasped the concept of "go slower when slippery."" He makes me extremely nervous in snow and tornado weather ("I can totally beat that tornado home!").

Also the odds of being able to push your compact sedan out of a stuck spot are a lot higher than of being able to push your SUV out. I can shove my Focus out of a stuck spot BY MYSELF and I'm pretty small.