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.