With the rising gas costs, many people are looking at purchasing a new car. The gas/electric hybrids can get over 50 MPG, so it is an attractive option. If you are looking for a way to save on gas make sure you do the math. Many times the lower gas costs of a new vehicle are negated by increased insurance and other expenses.
Consider this, if you are looking at two cars. Car A gets 25 MPG and costs $18,000. Car B gets 50 MPG and costs $21,000. The 50 MPG looks really good because you can go twice as far on one tank of gas. Assuming that you travel 15,000 miles per year, does it make sense to get Car A or B? Well with car A, you’ll end up using 600 gallons of gas or about $1800 (at $3 per gallon). With car B, you’ll use only 300 gallons per year for a total cost of about $900 per year.
So if everything else is equal, you’ll need to drive your car for at least 3 years to make it a good economic choice. After factoring in insurance and repair expenses, you make be looking at 5 or 6 years (depending on the type of car).
If you are looking at buying a vehicle, do the math for yourself. What is a good deal for one person may not be good for someone else.
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