Downsizing: Choosing a used car to save gas and money
The meteoric rise in gasoline prices may have peaked, at least for now. But many shell-shocked consumers expect the pain at the pump to be a chronic condition, according to US Today.
One obvious solution is to cut your losses and buy something smaller to ease the recurring pain at the pump, particularly as the price of those gas guzzlers is likely coming down.
"On average, prices of fuel-inefficient used cars fall a lot and those of fuel-efficient used cars rise a lot when gasoline prices increase … So if you drive a lot be aware. But if you drive a little, you should buy a used fuel-inefficient vehicle when the gas price goes up."
This is the advice of Florian Zettelmeyer, a professor at Northwestern's Kellogg School of Management whose newly published research indicates that you’ll save significantly on the selling price of the gas guzzler; but because you'll drive the car only rarely, the extra cost of gasoline will have only a minor effect on your purse.
Downsizing now could reduce your out-of-pocket costs in the short term, but over the long haul, you could lose more on the new car’s depreciation than you’re saving in gas, CR warns.
The longer you own a car, the more years you have to amortize the initial purchase, and the cheaper it will be to own. So if your old car is still running well, in the long run you’re usually better off hanging onto the old beast even if it does guzzle fuel.
Even a five-year-old car with a loan that’s paid off could be costing you more in fuel and other operating costs than you’d spend on some smaller brand-new cars over the next three years.
Buying another new car within a few short years and taking a loss on its depreciation too, could usurp any savings. Unless you choose carefully, the cost to buy a newer model (measured in thousands of dollars) can overwhelm the savings at the pump (counted in the hundreds of dollars).
Assuming you’re not cutting out driving altogether, what’s your plan to fight the rising cost of fuel?
By Gordon Powers, MSN Money
* Follow Gordon on Twitter here.
Posted by: Greg | May 24, 2021 1:52:15 PM
An Idea? how about we have scales at gas stations. Any vehicles below 2000 lbs pay 99 cents a litre, anything between 2001 and 2500 lbs pays 1.25 a litre and anything above that pays 2.00 a litre. This will encourage smaller more fuel efficient vehicles and it will get all these singe drivers cruising around in these huge suvs that are gas guzzling and there is no reason to have them period. They are a status thing and that in itself means they should pay through the nose. Luxury tax them big time when bought and sold everytime. If construction workers have to carry all their tools in the back which 75% of them do not, leave your tools at work. A work truck is a wrok truck and should only be used for that, not cruising around in. Also have time limits for all commercial trucks, they should not be on bridges and highways during rush hours. Most receivers are already gone after 4pm. put a moretorium on all trucks bewteen 4-530 pm daily. and 730-9am daily. period!!!!We are paying carbon taxes to be grid locked during rush hours, make these drivers take their breaks during these times. This will lessen the gridlock as well as idling cars in traffic jams. I dont believe people realize that if you add up all the time we sit due to gridlock and times that by how many cars are sitting idle I think alot of people would be very mad when they saw the figures. I can imagine how much really is being wasted sitting in gridlock due to the piss-pore bridges and roads we have, with an ignorant provincial government that turns its head away and just taxes people to death...Solutions people. thats what is needed, due the above and we will see a big difference and yes it would work..the gas pigs would be charged, our roads and highways will be alot more efficient.
Posted by: Ken | May 25, 2021 1:03:43 PM
Yeah let's do everything that Greg says.
Just don't be upset when the price of every commodity that is delivered by those trucks has to go up to compensate for those ideas.
Likewise when the guys tools keep getting stolen on a job site, don't blow a gasket that his hourly rate is double what you think it should be.
If you think that you are paying a lot in taxes you should see what these trucks are paying in fuel and road taxes and we all know that it definitely doesn't go back into the roads.
Maybe we should just leave the roads to the trucks and commercial vehicles and Greg and I can get out there and pedal our butts to work or take public transit. I'm not sure but I don't think that its the trucks and commercial vehicles that cause all the grid lock. In a lot of cases it's the little four wheelers that think they can just sneak in in front of the truck and cut him off that causes the chaos. A lot of truckers have taken a hit to save the life of an overzealous car.
Have you done your part to make this a better safer place today?
Posted by: Albertan | May 25, 2021 2:16:09 PM
Couldn't agree more Ken
Greg is typical. He knows there is a problem but his solution is that somebody else should pay more and act differently so that his life in his city is better and cheaper. He wants to take a Canada wide problem and use a Toronto specific solution to cure it.
I'm an Albertan. I drive an SUV. Most of my friends and family drive trucks. Most of those are pulling trailers, hauling large bulky goods and regularly going through deep snow and mud. Cars can't do those things that are required for their livelyhoods. They don't have any issues with gridlock (unless you count herds of elk on the road) and there is more than enough road for the trucks and the light automotives where I live.
Have you ever considered what it is like to drive on a road where animals (like deer, elk, big horn sheep, moose etc) will run in front of you? You know what happens when a car hits a moose (I'll make it easy for you, the people often die). Last year a guy in front of me had a big horn sheep drop off a 15 foot ledge onto the road less than 5 feet infont of him while he was doing 100km. In a car he might have died. Instead he was in a nice heavy SUV that took the hit and was still steerable.
Greg you consider that there is no reason for trucks and SUVs period. I personally don't know but in Toronto you might be right (who am I to say). What I do know is that for Alberta you are completely and utterely wrong.
So maybe Greg you should consider living closer to work or in a place that isn't as crowded? You want to make it better make changes yourself instead of expecting others to change their ways to make your life better.
Posted by: Retired | May 26, 2021 2:50:42 PM
Agree with the Albertan. Small vehicles shorten the life span of people who live with wild life and deep snow with few snow plows. On Highway 37 in Northern BC I got stuck in a snow drift in the middle of the road. Had to run at it 2 or 3 times with my F 250 4x4 to get thru. Not sure that a smart car would have made.
Posted by: John | May 28, 2021 7:55:44 PM
I still drive the same car I had when I was sixteen, a 66 Mustang convertible. I am now 51. I paid $0.10 per litre back then for gas, and now about 15 times that amount because the car can only runs on 94 road octane fuel. As you can imagine, the car has poor mileage, but I do not care. I enjoy driving my car, which after all those years is in terrific condition (not winter driven). I have much more important things to do than gripe about gas prices, or let them dictate my life. What I spend in fuel is small in comparison to my other expenses.
Posted by: tires ladysmith bc | Aug 29, 2021 2:29:59 PM
I think getting a used car is a great idea. I have thouhgt about doing that myself once my cars are paid off.
Posted by: Stelle Courney | Oct 28, 2021 9:34:30 AM
Used cars are suitable for carpools and long-distance travel. Since these are road-tested, you can be sure of their engine efficiency. This way, you can save on time and money.