Dave Says

Rental Runaround (August 2016)

Do you think having cancer insurance is a good idea? (July 2015)

Setting up the kid's car insurance (February 2015)

Check cashing for the unbanked (September 2014)

Keep the lifestyle simple (May 2014)

Should she have skin in the game? (September 2013)

Time to pay it off! (September 2013)

Making It Through Medical Leave (July 2013)

Should We Ever Buy A House? (January 2013)

Be Tightfisted Until The Crisis Is Over (January 2013)

Paying the parents (December 2012)

Sallie Mae vs. selling the car (December 2012)

Whatís the worst that can happen? (December 2012)

Letting them in on the secret (December 2012)

Not ready to combine finances (November 2012)

What The Law Will Allow (August 2012)

Making The Right Choice (August 2012)

Baby comes first! (August 2012)

Get the brother-in-law out! (August 2012)

Trust Broken After Cosigning (April 2012)

Review The Research (April 2012)

The Investing Makes Her Nervous (April 2012)

Lifestyle Changes (April 2012)

Do I Tithe On An Inheritance (March 2012)

No Credit Score, No Mortgage? (March 2012)

Where Do Toys Fit In The Baby Steps? (March 2012)

Guilt and Cynicism (March 2012)

Where Does Debt Go When Filing Bankruptcy? (December 2011)

Where Does The Donation Go (December 2011)

Ready to Buy (December 2011)

Intensity Hurting The Marriage (December 2011)

Hobby Car? (November 2011)

Not Quite Dearly DepartedÖ (November 2011)

Enough For Retirement? (November 2011)

Itís Just Another Gimmick (November 2011)

Will Paying Early Help? (November 2011)

Bargain Master! (November 2011)

Sisters Should Have Asked! (August 2011)

Buy Now Or Wait? (August 2011)

So, He Knows How To Manage Money? (August 2011)

Girlfriendís Money Problems (August 2011)

Smaller Down Payment? (August 2011)

Why Canít She Get Another Job? (August 2011)

Landlord Wants Protection (June 2011)

Prepping Kids For Healthy Habits (June 2011)

Switching To Company Debit Cards (June 2011)

Should I Reduce My Tithe? (June 2011)

Closing The Account (February 2011)

Dishonesty Is Not The Best Policy (February 2011)

Piles of Cash? (February 2011)

New Car In A Bad Situation (February 2011)

Drop Coverage? (November 2010)

Can't Pay For Her Wedding (November 2010)

Does Pride Keep Us In Debt? (November 2010)

Not Time For A Reunion (November 2010)

You're Being Hoodwinked! (November 2010)

Buying Used or New? (November 2010)

Is There A Recommended Vacation Percentage? (July 2010)

Donít Do it for the Gas Mileage (July 2010)

Investing Strategy for Retirement (April 2010)

Insurance? (April 2010)

Triple Play Investing (February 2010)

How Do I Get Started in Real Estate (February 2010)

Published: July 2010
Donít Do it for the Gas Mileage  

Dear Dave,

Is it worth the trouble to sell my old car now and buy a hybrid or another car that gets better gas mileage? Iím getting mixed advice from my friends on this issue.

Ted



Dear Ted,

Hybrids are a really big deal now, arenít they? Lots of people want to get rid of their $10,000 cars and buy these $25,000 cars so they can save on gas. Letís take a closer look at this.

So, youíre going to spend $15,000 extra to save on gas. Did you ever think about how long it will take to get your money back? Letís say you go from averaging 15 miles per gallon to 25 miles per gallon, and you drive 100 miles each week. That will save you about $10 a week at recent, average gas prices. That means it would take almost 29 years to get your money back in this deal. Does this make sense to you? It sure doesnít to me!

Listen, Iím all about saving money on gas. But people have lost their minds if they think it makes sense to go $15,000 into debtóor spend $15,000 cashóto save $10 a week on this kind of deal. The truth is that a lot of people who do this kind of thing arenít as worried about the environment or saving gas as they are about having that ďIím cool in a hybridĒ feeling.

Hybrids are a really new technology and that means theyíre going to improve rapidly. You donít want to buy a first generation hybrid and then have to go through the pain of trying to sell the thing five years from now. Talk about something thatís going to go down in value like a rock!

Now, if youíre driving an $8,000 car that absolutely drinks gas, and you want to sell it and buy some little $8,000 gas sipper, Iím fine with that. But donít use the gas argument to rationalize buying an expensive new car or even spending a dime more on a different car. Make a lateral move, or better yet a move down in price, and youíll save money from day one!

ó Dave

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