Reply #9: When I see that, I just remake "The price of gasoline is NOT high enough". [View All]

[happyslug]

I drive a 1997 Dodge Dakota, get about 18 mpg when I keep it around 50 mph. I looked into buying a new car but the math still keeps me driving the Dakota.

Math:

I drive about 20,000 miles per year (most people average 15,000, the Insurance Companies say 12,000). Given the fact I bike from Home to work, tells you something about the Mileage I put on.

But lets look at the numbers:

At 20 mpg, I use about 1000 gallons of gasoline a year (at 15,009 miles, 750 gallons, at 12,000 miles 600 Gallons per year).

Thus, at 20 mpg, I pay $4000 a year at $4 a gallon (15,000 miles equal $3000, at 12,000 miles $2400).

I looked at the new Chevrolet Eco Cruze, a 1.4 turbo-charged four Cylinder engine, gear for maximum fuel economy, it gets 42 mpg, If I assume 40 mpg, I cut the COST of gasoline I use per year in half (Down to $2000, if I drove 15,000 miles to $1500, at 12,000 miles $ 1200).

If I assume insurance will be about $1000 a year, no matter what I drive, I "Save" $2000 a year if I buy the Eco, the problem is my Dakota is 100% paid for, the Eco, sells for about $18,000 or about $450 a month for a five year payment plan or about $5400 per year. Thus while I save $2000 in gasoline, my cost of paying off the Eco is $5400, or a net lost of $3400 per year for five years (at 20,000 miles per year, or $3900 at 15,000 miles per year, $4200 at 12,000 miles per year).

The numbers get better at $5 a gallon, $5000, $3750, $3000 price of fuel with saving of $2500, $1875, $1500 Less the cost of a new car of $5400, $2900, or $3525 and $$3900.

At $10 a gallon the numbers get interesting:
$5400 cost of a new car per year
At $10 per gallon, 1000 gallons equal $10,000, 750 equals $7500, 600 gallons equal $6000.
Saving on switching to a 40 mpg car, $5000, $3250, $3000

Thus even at $10 a gallon, it is cheaper for me to keep my car then trade it in.

At $11 a Gallon, my 20 mpg Dakota cost $11,000 at 20,000 miles, $8250 at 15,000 miles, and $6600 at $12,000 miles. Savings of $5500, $4125 and $3300. Thus at $11 a gallon it pays me to trade in my Dakota and get a new car no matter how well my Dakota is running.

At $12 a Gallon (I will ignore 20,000 mile per year, just use 15,000 and 12,000 miles per year)
At 15,000 miles per year, price will be $9000 and at 12,000 miles per year $7200. Still Cheaper to keep my Dakota at 15,000 miles (Saving is only $4500 at 15,000 miles per year, $3600 if I drive 12,000, both still in excess of $5400 per year price of a new car per year).

At $14 a gallon, my Dakota will cost me $10,500 in gasoline to use, the savings in getting an Eco will be $5250. Given the cost of repairs on a 13 year old trucks (It cost me $580 to get the truck to pass inspection this year), At just over $14 a gallon I have to junk my Dakota and get a Eco.

At $16 a gallon, at 12,000 miles per year, my Dakota will cost me $9650 in gasoline. If I purchased an Econ $4800 in gasoline. About the breaking point for the Dakota NOT to pay for itself.

At $17 a gallon, at 12,000 miles, My Dakota would cost me $10,200 in Gasoline, An Eco would cost me only $5100 in gasoline.

Thus my "Break even point" in terms of whole dollars is $11 at 20,000 miles a year, $14 a gallon at 15,000 miles per year and $17 a gallon at 12,000 miles per year. Thus until the price of Gasoline get a lot higher then what it is, I am better off NOT trading in my car, but using other alternatives, i.e Biking to and from work. Taking the Train on Weekend trips to Pittsburgh from my Home in Johnstown Pa (One way fare is only $14. The train and the Dakota are tied in terms of price right now, at 20 mpg gallon and a round trip of 180 miles the gasoline cost at $4 a gallon at 20 miles per gallon or 9 gallons, is $36 dollars, round trip is $28 dollars so a saving of $8 per trip to Pittsburgh, I started to use the train when Gasoline hit $3 a gallon or $27 a round trip as oppose to Amtrak's $28 a round trip). The only problem is the train only runs once a day, 6:00 pm in the Evening at Johnstown to Pittsburgh and 7:20 am (except Sunday, then it is 1:20 pm) from Pittsburgh to Johnstown and points east). If I have a hearing early Monday Morning, I have to take the 1:20 on Sunday instead of the 7:20 on Monday. The Train arrives in Johnstown at 3:00 pm on Sunday, and 9:00 am every other day of the Week).

My point is that it will be hard for a lot of people to STOP using their cars from just an economic Point of view. i.e. it is hard for them to justify trading in their old cars for a new more fuel efficient one. The other major way to save money is to move closer to your point of work. This is easier for high income people then low income people for over the last 20 years you have have seen a lot of Gentrification in old urban centers so that it is easy to get a high end home close to work, if you work in the Urban center. It is also relatively easier to find housing close to suburban work locations if you are willing and able to pay the price. The problem is low income people tend to live miles away from their jobs, and most of low income people's jobs, now-a-days, tend to be in suburbia, where their is no mass transit, biking is hard to do, and housing is to expensive for low income people to obtain (Most low income people live in the old urban centers, older suburbs (i.e. former "Trolley Suburbs" of the 1900-1930 period), or old rural industry centers (Common in Western Pennsylvania, referred to as "Coal Patches" built in the late 1800s to early 1900s to provide housing for miners, many such "Coal Patches" exist all through the suburbs of Pittsburgh and Western Pennsylvania) and even old small cities and towns now absorb by suburbia.

One last comment, as to "Big Ass Chevrolets and Fords Truck" passing at 80-85 miles per hour, I rarely see that, I do see a lot of "Big Ass Chevrolets, Fords, Dodges, Toyotas, Hummers and Jeeps" SUVs, passing me at 80-85 mpg but rarely pickups. This goes back to a study done a few years ago and when it came HOW someone looked at a Vehicle, a clear division exists. SUV drivers are much like Sports Car drivers and large Cars drivers, they put more importance on appearing to be "empowered" then anything else. Mini-Vans, Station wagon and Pick up owner used the same terms, but meant it in terms of how it permit them to help their neighbors and communities (i.e. hauling people and things around for themselves AND others). When I read the Article it was interesting, but like the Authors not unexpected. SUV drivers are closer to Sports Car drivers then Pick up Drivers in attitude. Pick up drivers have always had more in common with Station Wagon and Mini-van operators then SUV drivers. I See Pick up drivers, Station wagon drivers, Hatch back drivers and Mini-van Drivers, opting for lower speeds, bicycle and mass transit while before Sports car and SUV drivers are off the road.