SUVs are worth so little that it could take 15 years for a more fuel efficient vehicle to pay for itself in gas savings. Before rushing to trade-in your gas-guzzler, do the math and make sure it isn’t economical to hold onto your unfashionable behemoth. Here are three questions to consider…
- What’s The True Cost Of A Trade-In? Use Edmonds’ calculator to price-out the cost of a trade-in. The results may be surprising: trading a 2005 Ford Expedition for a 2008 Toyota Highlander hybrid won’t produce savings for almost 15 years.
- Is A Small Car Practical? You bought a SUV for a reason, right? RIGHT?! Yeah, think about that for a moment before looking at a new Smart.
- Are You Thinking With Your Brain Or Your Gut? Gas prices are rising, but the overall cost of ownership is stable. Your insurance bill is probably the same, and your mechanic isn’t raising prices. Now might seem like the right time to get a new car, but “if you’re selling an S.U.V. or trading it in, you’re selling an asset at the low ebb in its value and trying to buy an asset that’s been bid up in value,” says Mr. Nerad of Kelley Blue Book. “In stock market terms, this wouldn’t be a propitious time to make that kind of trade.”
Is it worth trading in your gas guzzler? [Edmunds]
Ditch the Gas Guzzler? Well, Maybe Not Yet [The New York Times]
(Photo: Getty)
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@wellfleet: I’m sure buying a new car is much better for the environment. Never mind the impact from building a new car (all that plastic and metal and computer parts and chemicals) and transporting it to you (either across the country or across the globe) – not to mention dumping the old one in a landfill somewhere to rot.
Seriously, I’ve not done the enviro-math. You could be right or it may be “better for the planet” to drive the older car that burns more gas. MPG isn’t the only variable here. Saving the planet isn’t nearly as clear cut as people would like to think it is.
@wellfleet: just as long as you aren’t going on about hybrids… Cause the process used to make the batteries for ONE Prius is more dirty for the planet than a Land Rover for its entire life
@wagnerism: Regarding the depreciation of new cars being huge in the first two years. The market now is so screwy that the retail price for my one-year old Honda Fit is now two thousand more than what I paid for it new. The dealer trade-in price is only $200 less than what I paid.
I got my Fit when gas was in it’s now-annual Fall decline. There were a few on the lot and I actually got it for $200 under retail. Gas is starting to drop again. Everyone should just wait a few months to buy a small car. I am already hearing how people are now referring to the current $3.50 a gallon price around here as cheap again. By October it might actually drop under $3.00 and people will be partying in the streets and buying SUVs again!
I’m not sure about the math, but I saw an blurb in Saturday’s Syracuse Post-Standard that said increased insurance costs can eat up ALL your gas savings when you trade your SUV. Sounds dodgy as hell to me, but I guess if you’re trading in a 1998 Ford Expedition that’s been paid for for years for a new Prius, which has got to be on the top ten list for auto theft, I suppose there might be something to it.
The real point, which was not included in the Post-Standard blurb, was that a paid-off but mechanically-sound vehicle that eats gas and only requires basic liability insurance is still cheaper than a gas sipper on which you are still making payments. True, but if you were planning to trade the thing in anyway, it still makes sense to reconsider your vehicular needs (how many times a year do you actually go camping/boating/snowmobiling, anyway, and is it worth spending fifteen bucks a day going to work?) before deciding on which new one to get.
Seems to me, from the other SUV-releated threads on which I post, that most SUV drivers “need” their dinosaurs for some recreational activity. I would crunch the numbers with my insurance company on the additional cost of hanging onto the SUV for that purpose while buying the compact car for my ridiculously long daily commute that’s eating me alive. A second vehicle that is only used for recreation can’t cost that much extra, right? Has anyone actually done this? Your thoughts?
OK, I don’t think I’ve seen this in the comments yet, so…
First, a little math to prove a point: If you have a gas-guzzling SUV, you don’t need to replace it with a Prius to realize savings. In fact, as the fuel economy of your replacement vehicle increases, the savings per increase in MPG decreases. Let me explain.
Let’s say you’re starting with an ’05 Ford Explorer. Edmunds gives it an MPG of 16. Furthermore, we’ll say you drive 700 miles a month, and gas is $4.25 a gallon. With these numbers, you’re paying about $186 a month for gas.
Now let’s say you replace that gas-guzzler with an ’05 Subaru Forester wagon. The Forester has AWD and a decent amount of storage space. But you’re not getting a huge MPG improvement – it only gets 24 MPG. But that 8 MPG increase means a monthly gas bill of about $124 — you save over $60 a month!
OK, so you say if that’s good, why not go whole-hog and get a Prius? Great! 47 MPG is a HUGE improvement. You’ve made an increase of 23 MPG over the Forester, and 31 MPG over the explorer! Your gas bill is $64 a month. You saved another $60.
In other words, if you have an Explorer, you can save $60 a month by getting something that gets just 8 MPG better mileage. But to save another $60, you need to find a way to make a 23 MPG improvement.
Bottom line? If you have a gas-guzzler and want to replace it with something efficient, realize that a small change (like going from an SUV to a minivan or station wagon) may give you the cost and gas savings you want.
OK, and here’s point #2. I have to admit, I’m biased — I drive a VW Golf diesel. But look at this: The “new” EPA estimated mileage (according to the Edmunds link) for my car – a 2001 Golf GLS TDI – is 39 MPG. Realistically, around town, I get in the low 40s. On a recent road trip, I got 52 mpg. Sure, diesel is a little more expensive these days. But when I’m consistently getting over 45 MPG with mixed driving… the price of gas isn’t such a concern. I can go over 700 miles before I need a fill-up.
It’s strange — almost every time you hear a discussion of fuel-efficient vehicles, the Hummers and Expeditions are at one end, and the Prius and other hybrids are at the other. In the US at least, diesels rarely get mentioned as a fuel-efficient alternative.
@milqtost: There is no need to buy a NEW car. But how about a smaller, used car? I guess it doesn’t matter if you think I’m wrong, because I am looking for a car right now and the lots are full of trucks and SUVs at bargain prices but a ’91 Civic is $6000… I’m certainly not advocating everyone letting their old vehicles linger in a landfill for all eternity, but there must be a better way than literally wasting gas in an enormous vehicle when a smaller one would do fine.
I certainly agree with a lot of you guys that this article is sort of off base. If you can’t afford to put gas in your truck/suv/whathaveyou, chances are good you can’t afford a new car. As long as I can remember, there have been small japanese cars, hondas, mazdas, toyotas, that get great gas mileage out there. My first car was a 5 year old Mazda 626 that I bought for 3500 dollars with 60k on the ticker. I ran it for 2 years and put 80k on it, averaging in the mid 30s (42 on a cross country trip).
At that point I certainly would have enjoyed having a pickup truck, but I just plain couldn’t afford it. Couldn’t afford to put the gas in it, couldn’t afford to change 8 (or 10) spark plugs instead of 4, couldn’t afford 8 quarts of oil instead of 4 (anyone see the price of Mobil 1 these days? sheesh.), couldn’t afford the cost of 33 inch tires (200) vs 215s (50). I made a lot of considerations when I bought that car, and I bought it solely because I knew I’d get about 100k out of it maintenance free. Hell, at 150k I was still on the original clutch, and my driving style is quite spirited.
I’m not sure where this rambling is really going, all I know is that if you wanna dump your big SUV, you should buy a used japanese car for cheap.
Or get a job with a company car, and keep your pickup or SUV for weekend trips to home depot.
@brockmjd:
Diesels are rarely mentioned as a fuel efficient vehicle because people see the per-gallon cost of diesel and are instantly scared off. Diesels are also less polluting than gasoline engines, but no one ever talks about that either. (There’s all that yucky black smoke…it MUST be pollution/sarcasm)
@wellfleet: Not sure if you are aware, but while a hybrid such as the Prius may get great gas mileages and cause less harm to the environments once it hits the road, the production aspect of these vehicles causes more harm to the environmentthan any suv on the road.
I’m curious to know what will happen with all these toxic batteries when hybrids start reaching the end of their lifecycles?
36 million SUVs in a decade? It makes you wonder how many of those vehicles were *really* needed. 1%? Half of one?
And the obsession of the cars is annoying. Why no mention of the possibility of a scooter as a second vehicle? If a second or replacement car isn’t feasible, why not a cheap, light vehicle for individual travel to minimize operating the lump? Borrowing one to two thousand and saving thousands in gas makes more sense than the status quo.
@ckaught78: I’m curious to know what will happen with all these toxic batteries when hybrids start reaching the end of their lifecycles?
This is yet another reason to hope the Air Car hits North American shores. That problem won’t exist.
@P_Smith: Anyone know how much a scooter costs to insure?
I sorta fell into this trap a little over a year ago. Went out and bought a “smaller” car to replace my Bronco as a DD. Yes I have actually saved a couple of bucks doing that. But, I recently have gotten into some situations where the car (An 02 Maxima) just isn’t big enough to do what I need. So now I’m having to look into a wagon. Only problem is all modern wagons are all too small for me (6’4″) so for the most part my knees are in the dash or if they aren’t the back seat ends up being useless. Not only that but most of the vehicles I tested were just basically useless when the skinny pedal was pressed. Except for one, one that had enough room, had enough power and had the right egronomics. The Toyota 4-Runner… Crap here we go again…
It’s your money, buy and drive what ever the hell you want!
@mythago: @ogman: If you can find a way to fit my two large dogs safely into a minivan/smaller car, then please enlighten me. Otherwise, I’ll keep the SUV, and my husband will continue to drive it for his 10 minute commute while I drive a camry for my 45 minute commute. And I won’t feel guilty about it at all.
@ckaught78: NiMH batteries, such as the ones in a Prius, are routinely recycled. I’m not too worried about that.
@HurtsSoGood: Depends on the state, but in most states you aren’t required to carry any insurance on scooters under 50cc.
@corporatedrone: The European solution to carrying dogs is a station wagon. Most wagons there even have a “dog gate” available to keep the dogs from coming to join you up front.
@battra92: A reasonable choice, if you have the room for the extra vehicle.
I parked my 2000 Dakota V8 when I got a PT Cruiser in 2005. The Dakota only comes out when it’s time to haul firewood or pull the camper, and the PT can still fit a 3 or 4 big ole’ rackmount servers that I need to haul around for work sometimes.
I’m using a lot less gas, and the Dakota will last indefinitely at this rate, it only gets about 1600 to 2000 miles a year. The tires will dry rot before they wear out. I still change the oil twice a year though, you don’t want a bunch of sludge building up in the oil pan…
@MPHinPgh: The problem with keeping another vehicle around is there are significant fixed costs — insurance and registration for each of my cars costs about $350/year, and that’s with only liability coverage.
JennQPublic: *applause*
I hate being stuck behind SUVs where I can’t see. I also hate being in front of them at night because their headlights beam directly into my rearview and side mirrors. When stopped at a light, I try to creep up to stop being blind, and they creep up with me, not getting the picture.
@starbreiz: I also hate it when I’m trying to turn, and there’s an SUV next to me, so I can’t see oncoming traffic. When I try to creep up so I can see past their hood, they think I’m getting ahead of them and creep up as well.
Part of the problem with SUV headlights is that the U.S. headlight aiming laws are all referenced to the height of the headlamp on the vehicle, not the height above the road, so low beams on taller vehicles end up with a longer throw.
I’ve said it before, and I’ll say it again: we will give up our paid for SUV when someone comes out with a car my 6″4″ husband can comfortably fit into.
Every once in a while we go try. But all the efficient cars are built for 5’3 people.
@brockmjd: However, if that ’05 Explorer is paid off and you take out a loan on the Prius or Subie, all your gas savings are eaten by the mandatory comprehensive and collision coverage. Also, don’t forget the chunk of change you’ll pay in sales/use tax.
I’m pretty sure comp and collision for even the greatest driver with the greatest credit is going to add more than $120 to your insurance bill every month.