To buy or not to buy, that is the question. Gas is at its highest price ever. Forget about inflation and supply and demand. Most consumers are feeling the pinch at the gas pump because gas has gone up over two dollars in the past decade, most of that within the past year. We’d be feeling the same if the price of a Big Mac went up by $2. Heads would roll.
One question on car owner’s minds is “how do I get rid of my great all-powerful truck or SUV?” The price of large vehicles has taken a hard hit in the past few months. Once “too-proud-to-sell-at-that-price” large vehicle owners are actually paying money to get out from under their gargantuan gas-guzzlers.
For those owners I would say, stick with what you’ve got, or at least do the math before you try to sell your Hummer for scrap. Let’s say the price of unleaded is $4. Let’s say at best your SUV is getting an average of 20 MPG. On a 22 gallon tank that’s an average of $80 every time you fill up. If you drive 12,000 miles a year, you are spending $2400 a year on gas alone. And that’s a conservative estimate for those of you who know what I’m talking about. But if you’re a long commuter, you may fill up every week and spend as much or more than $4200.
If you own your vehicle outright, you are talking about at least $20,000 if not $30,000 to purchase a new Civic or Camry. Even used, I would be surprised to see a 1-3 year old fuel efficient car go for less than $20,000. That’s five to ten years of gas right there.
If you owe more than you can sell the car for, consider a) what your monthly payment is; b) how much cash you’ll have to have to get out of the car; and c) how much you spend yearly on fuel and maintenance. For some it is possible to negotiate a dealer trade where they roll your negative equity into the purchase price of a new car. Be careful here. Dealers too often throw in things like rebates, dealer incentives, and attractive financing offers to lure you in. Use an outside source like NADA, Kelly Blue Book, or Edmunds to ascertain a fair market price for the vehicle you are buying and selling. Some other factors to consider about your car is how much your insurance costs, how much do you pay in tag and tax fees every year, and how often are you taking your car in for service and how much does that cost you.
Americans have short memories when it comes to the economy, so $4 for gas right now which seems egregious, will be the norm at some point in the near future. One last tip that might help you absorb that ridiculous gas bill is how much you spend cleaning that car. I’ll tell you I haven’t washed my car in over a year and it looks fine. If I can get by with once a year, you can think about trimming your weekly $20 deluxe car wash and pour that money into your tank.
However, don’t undervalue the worth of your own self-esteem. On the one hand, if you have to drive a 12-cylinder diesel truck and have nothing to do with the construction industry, you might better spend your money on a professional who can help you discover your underlying motivations. On the other, if driving a reasonably priced SUV is what it takes to make you happy, then by all means do so. What’s a few Benjamins when it comes to your happiness?
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