Hello all. My fiancé and I are in a bit of a pickle and I'm trying to be mustachian about finding a solution:
She drives a 2000 mustang with 160,000 miles and we're wondering when to replace it! I was looking at some ford fiestas, which can be had used for $12,000-13,000 with roughly 15,000-20,000 miles.
Here's the breakdown:
Avg US driver= 15,000 annual miles
Gas= $3.50/ gal (roughly)
Using those stats from FHWA.gov gives us....
Four year fuel cost mustang $9545
Four year fuel cost fiesta (or similar car that gets 37-40 mpg hwy)
$6,562
Roughly saves $3,000 in gas
over 4 years
Minus the interest on loan of $13,450 (roughly the cost of a used small car) @ 2.99% rate (total lifetime interest is $850) =
Net gain of $2,150 saved on fuel and a car that's 10 years newer. Doesn't factor in the annual repair savings of driving a newer car.
Monthly cash flow comparison
1,250 miles/ month
Mustang $198 gas
Fiesta $136 gas.
$60 gas saved per month
$296 car payment- $60=
$236/ month
Break even when?
1st year fuel- $2386 vs $1640
$746 savings
2 years $1,500 savings
3 years $2,238 savings
4 years $3,000 savings
We are already planning on budgeting $200 a month for your car fund, so we're are only paying $36 extra on a monthly basis for you to drive a 2011 used car with 14,000 miles vs. 2000 car with 160,000 miles.
We also save $3,000 in fuel over the next 4 years. However, we do have a loan obligation so if we lose a job then we're at risk of not being able to pay.