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Cost of Driving

With the price of gas getting higher, in my opinion due to the greed of the oil companies since the profits are way up and if it was just a cost issue, that would not be the case, some people are thinking that they will save money by buying a vehicle which better fuel economy. This is often a false economy since while it will make a difference at the pump, it often does not save you money when you look at just the cost of buying a vehicle which gets better fuel economy.

For example, if gasoline is at $3/gal and you compare two vehicles, one which gets 12 mpg and the other which gets 20 mpg. The cost per mile for just gas for a vehicle which gets 12 mpg is $0.25/mile. At 20 mpg it costs $0.15/mile. This means that in order to save $1000, you have to drive 10,000 miles since you are saving $0.10/mile, so for every $1000 you pay for the new vehicle, you have to drive 10,000 miles and that can quickly mean that it will take a lot of miles to just break even. If you then consider a vehicle which gets 30 mpg, it will cost $0.10 to drive and over 6600 miles per $1000 paid extra to break even. This makes sense if you can trade one vehicle for the other, but perhaps not if you have to buy it. If you don't get rid of the first vehicle, it is hard to save money since you have to add up all the expenses, such as insurance. If you replace the vehicle, then you need to consider the difference in insurance since the new vehicle could be more expensive to insure.

If you have a choice between two vehicles, it might make sense to buy the one which gets better fuel economy, but only when you consider the price difference. You need to also remember that when you pay more for the vehicle you are paying up front, which means either lost interest on the money or more interest if you have a car loan. Most people don't consider this since they are not reminded of it every time they get gas.

The bottom line is that before you rush out to get a vehicle which gets better fuel economy you might want to calculate what it will really be saving you and what it will be costing you. It is a shame that turbo diesels are not more available since those typically get much better fuel economy than gasoline engines. Few companies sell them in the US. Toyota and other companies sell them in other countries, but refuse to bring them into the US.



Index for Insanity, Inc.

Written: 23-Sep-2005

Updated: 23-Sep-2005

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