So you’re in the market for a new car and you’re also feeling the pain at the pump of rising gas prices. Join the club. So the thought crawls into your head: should I get a fuel efficient vehicle? You could be looking for a hybrid or a smaller car like a mini cooper. But is the high cost of a fuel efficient car a good financial choice?
In order to find out whether it’s right for you, you’ll need to determine a few things. Do you drive a lot? If not, you won’t be saving much. Are you buying a car because you want it to pay for itself in savings? If so, you should be driving a gas guzzler and will be trading it for a hybrid.
A great tool is this gas guzzler tool from Edmunds. With it, you can calculate your monthly savings in gas by comparing your current car with the more fuel efficient vehicle you’re thinking of getting.
Let’s look at a typical example. You drive a car that gets 21 miles per gallon and you want to buy a car that gets 28 miles per gallon. With typical driving habits at the current gas prices you stand to save about $60/mo. or $700 every year. A $15,000 car would then pay for itself in about 20 years.
But instead of thinking of when the car will pay for itself you should just look at the savings in gas compared to your current situation. Most of the time when you’ve previously bought a car it might have used more gas or the same as your previous ones. So think of the gas savings you’re going to get as a bonus.