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Gas Dilemma #1: Does It Make Sense To Trade In A Vehicle For Something That Gets Better Mileage? Absolutely Not!
by Nina Gass
TheSyndicatedNews columnist

Nina Gass has more than 18 years of business writing and editing experience, including writing for Market Drive News, Mortgage Banking Magazine, and

An article on the Internet recently proclaimed that gas in Europe is between $9-$11 per gallon as if that is supposed to make us in the US feel better or psychologically condition us for higher prices. Many in the industry are predicting that the national average will surpass any previous record. With prices on a constant upwards swing, it seems like gas station owners should install electronic signs that flash the accelerated movements similar to a stock market ticker.

No relief at the pump is hitting the pocketbooks hard. While certain plans can be changed or abandoned, the biggest challenge lies in the commute to work where some must fill up their tanks at least twice in one week. This has caused many to stare at their beloved vehicles and contemplate trading in that gas-guzzling truck, SUV, or high-performance luxury vehicle. Before emotionally detaching yourself and possibly trading down in vehicle status, let’s examine if it really makes financial sense.

Keeping it in Park: Reasons for Not Trading-In
There are a number of reasons to keep your favorite ride in the garage, but one of the biggest is the depreciation hit that you experienced when you left the showroom. Vehicles can lose a significant percentage of their value within the first two years. If this is the case, ask yourself why you would want to go through that financial loss again anytime soon, especially if your vehicle is still relatively new. While you might be single-handedly helping to revitalize our sagging economy and vehicle manufacturers may thank you for it by giving you discounted or free gas as an incentive, buying a new vehicle is not the best financial move.

Even if you pass this point in the decision and go ahead to the next step to trade-in your beloved gas-hungry vehicle, you may be surprised to find what little money you will get for it. Because of the gas crisis, dealerships are flooded with these high-consumption vehicles on their re-sale lots. With little demand, the dealership is not going to give you the maximum value that you may have expected even if it is in pristine condition.

Plugging these reasons into a mathematical equation does not compute into a good idea. In order for this decision to make financial sense, the amount you have in gas has to equal or be greater than the gap between depreciation, the purchase price, and the lost value. Even if gas does hit $5 or $6, the financial implications do not lead to vehicle trade-in as a viable solution.

For everyone that has then discounted the first three reasons and are rushing to buy that hybrid vehicle, thinking it will solve all your problems, stop and reflect on these findings. Many people have not considered the long-term ownerships costs and the length of time it takes to possibly re-coup the higher price paid for these vehicles. Battery replacement and maintenance costs, such as oil changes, are significantly more money and tend to put a large dent in what could be saved by needing less pump stops. A 2005 study conducted by Runzheimer International found that some hybrids cost about $8,000 more than their non-hybrid counterparts and estimated that it could take at least 15 years to make-up for the higher price on the vehicle. With gas prices being considerably higher than three years ago, it may not take as long to earn back that extra investment but it could still be costly considering the aforementioned outlays of money on these specialized vehicles.

Leaving it in Neutral: The Numbers Tell a Tale
Before just jumping at the reasons above on why not to opt for an econo-box when you don’t really like it and you fear for your life on the freeways, it helps if you do some research for yourself in regards to analyzing your vehicle’s performance to see if the numbers indicate if it would be possible to improve its gas consumption.

A log is essential for tracking fuel economy and for pinpointing changes in usage and highlight possible problems with the vehicle, which could eventually affect performance levels and overall fuel consumption. Seeing more frequent trips to the pump even though you are still going the same distance means it is time to look at certain maintenance needs, such as a tune-up, oil change, or under-inflated tires. Think about signing up for a service that allows you to maintain your log online so that you can check and update it on a real-time basis.

As your online vehicle advisor, Ownersite offers detailed fuel consumption statistics compiled by the Environmental Protection Agency (EPA) that can also provide you with advanced fuel economy techniques to better understand how your vehicle performs. Under the Vehicle Reports section of the website portal, you can select Miscellaneous Reports and access two different reports related to fuel economy. The EPA Fuel Economy Report asks you to input your vehicle model and engine. In return, you receive a report that lists the vehicle’s estimated annual fuel costs as well as average city, highway, and combined mileage figures. You can then review your own figures that have been compiled under the Maintenance and Expenses section to see how your vehicle stacks up against EPA estimates.

Accelerating Gas Maximization by Shifting Lifestyle Patterns
If you are convinced that you don’t have to part with your favorite vehicle, consider taking these fuel-saving tips for a test drive to get the MPGs and your gas budget under control:
• Go easy and steady in your driving as well as find ways to minimize multiple stops and starts.
• Keep on top of your vehicle maintenance to ensure that your tire pressure and other key functions are optimizing performance.
• Remove any excess weight from your vehicle that could be dragging it down and burning up that fuel.
• Do not leave your vehicle idling.
• Consider utilizing your overdrive gears to slow your speed.
• Opt for a lower fuel grade that does not lead to engine knocking and still maximizes savings.
• Try gas additives that help with a cleaner fuel system and combustion chamber.
• Turn off your air conditioner and roll down the windows to stop the horsepower needed to run it from draining your engine’s efficiency.
• Invest in public transportation cards and bus passes.
• Drive less and ride a bike, walk, or carpool.
• When you do need to fill up, consider using, a large user community that contributes real-time pricing so you can find the local stations with the lowest prices.

These should leave you with money in your pocket and a reason to leave that vehicle in your garage. What it comes down to is that you should not necessarily give up something that you love when certain lifestyle adjustments might make more sense. And if gas does ever reach the price level recently recorded in Europe, then maybe it is time for all of us to consider public transportation, a bicycle, or a return to the olden days of horse and buggy.

Published: Aug 6,2008 18:47
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