Last year my fiancee and I purchased a beautiful 2002 Acura TL with 180,000 miles for $3,000 from the original owner. The vehicle had been meticulously maintained at a dealership, at manufacture suggested intervals, and came with a stack of service receipts that was a mile high; that is to say, though the miles were high, the owner had done everything in his power to preserve the $30,000 worth of luxury and performance the car came with when purchased new.
Initially we wanted to purchase a vehicle that got 30+ mpg, but in doing research I found that most cars getting this kind of mileage didn't start to come stock with side air bags and anti-lock breaks (these were non-negotiable for my fiancee) until as late as 2010. This meant that those cars would cost in excess of $8,000 on the used market. Since $8,000 was a pretty big chunk of our cash net worth we decided that we'd give up gas mileage in favor of safety features by buying a 10+ year old luxury sedan, which came stock with those safety features in early 2000's but at a much smaller price tag.
So, where does this leave us? Well, we drive roughly 7,000 miles a year, and get 17.5 mpg BUT must purchase premium gasoline (so says the manual), so our monthly gasoline expenditure is $125. In addition to this expenditure we have a monthly insurance cost of $35.
Obviously we could cut our gas expenditure in half by purchasing a car with 2x the gas mileage, but, again because of the increased cost of owning a car with 2x the gas mileage AND the safety features, we'd have to put about $8,000 of our approximately $16,000 available cash in play. It seems intuitively correct that with that much of our net worth at risk, we'd need to purchase more than the minimum level of insurance we have now, which means that though we'd get a monthly rebate in the form of gas savings, we'd incur a greater monthly cost with respect to insurance. In addition, you always face a small risk when purchasing an unknown vehicle (is it a lemon?!), a risk that we know by now we haven't assumed in owning our current car.
Thoughts, suggestions?