New Car Economics
Jun 9th, 2008 by gmoran
“New Car Economics”, by Daniel Vasquez, gives a practical look at the issue of downsizing to a more fuel efficient car. He cites Consumer Reports’ caution to think a bit before rushing, especially if you are financing a vehicle more than four years and have had it for less than three years. The costs of the new car, tag, taxes, financing, etc could be much higher than the fuel savings you would realize on, let’s say, a new Prius. The example given was a 2005 Ford Five Hundred SEL V6 that got 21 mpg overall in Consumer Reports testing compares to the 2008 Toyota Prius that got 44. At 12,000 miles per year paying about $4.00 a gallon the Ford will burn you for about $2,000 while the Toyota will only tickle your wallet for about a grand. By the time you count up all the costs of trading in the Ford now, the Toyota will cost about $9,000 to own and operate this year while the Ford will cost about $6,000. The $3,000 difference is enough to make you think about what happens if gas goes down!