With gasoline prices above $4.00, many are spending large amounts of money to fill up their pick-up trucks and large SUV`s with V8 engines.
The temptation is to either sell or trade them in to get something more economical that ds not require something akin to a small loan to fill up at the gas station. Should you walk down this path, too? It depends.
There are some larger issues at work that you need to consider. We all make financial mistakes but, hopefully not the kind that will devastate us. Owning a vehicle which requires large amounts of fuel to keep it on the road hurts, but it is not the end-all of your financial picture.
There are additional costs that are just as important when considering the total cost of keeping a vehicle. And, you need to take heed of these in order to navigate through this important decision.
Trying to sell one of these vehicles out-right will be a frustrating experience. There are bargain hunters out there that are looking for those who want to unload their large vehicles for next to nothing. If you value your sensibilities, watch out for these types of buyers. Other buyers are just avoiding these vehicles all together.
If you choose to trade-in for a more fuel-efficient vehicle you will save on gas, but you will still have other hard costs.
Current Market Conditions.
Since used trucks and SUVs are in ample supply right now, dealer are not going to give you a whole lot for yours if you try to trade it in. They are having problems selling them, so why should they give you a reasonable trade-in allowance for yours?
Some reports coming in tell us that trade-in values have dropped between $5,000 to $10,000 on a vehicle. That`s a huge hit to take, coupled with depreciation on a new car. All together a stunning amount. Then, don`t forget the state sales tax which can be $800 to $1,500, even on a compact car.
If you are upside-down on your existing loan (you owe more than the vehicle is worth), then you will have to bring a large amount with you to bail you out. Do not allow an auto dealer talk you into rolling that amount over onto your new or used vehicle. That is something that you should never do, under any circumstance. All of this to avoid the $4.00 plus per gallon price of gas?
Fuel costs on a truck or an SUV are in the range of $4,616.00 per year (15,000 miles / 13mpg = 1154 gallons x $4.00 per gallon).
The same fuel costs on a compact fuel saver is in the range of $2,000 per year (15,000 / 30mpg = 500 gallons x $4.00 per gallon).
All of your additional costs of financing a vehicle (new or used) just to save $2,600 per year.
If you take some simple steps, you can save that $2,600 without having to give up your vehicle. But, it will require you to make some changes.
First, limit your driving in your truck or SUV. Make a target of 100 miles or less per week. This will not only save you money on fuel, but you will also save on maintenance costs. And if you change the insurance designation on the vehicle, you can save money there, too.
Second, look at alternatives to driving your vehicles. Car pooling or using public transportation to work are very real options in most metropolitan areas. Since costs are so high for owning a vehicle right now, it`s time for us to stop looking down our noses at public rides and ride-sharing.
Bicycle sales are going through the roof as are sales of scooters. Don`t laugh. These scooters get 100 mpg. Dsn`t sound funny now, ds it? And, bicycles give you something that a motorized form of transportation can never afford you exercise.
The bottom line is that you need to be very careful when deciding whether or not to get rid of the gas hog. Look at all sides of the issue, and make your choice based on fact and reason, not emotion.