Author Topic: Math: How do you determine if it's better to replace a car vs keep a car.  (Read 3923 times)

Mike Key

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My wife and I have already downsized to one car, and we kind of set our eyes on a used 2010 Kia Soul. But I'm just wondering, how do I do the math to determine if a newer car is really going to be more effective VS our 2004 Trailblazer. The Kia wins in gas milage, but we'll be spending money to purchase it. The Trailblazer is paid for but cost more to fuel. So I'm confused how to determine what's really going to equal the best results.


(And please don't suggest other smaller cars, my wife gets really car sick in smaller vehicles, she rarely could ride in the Audi with me and it was a sedan.)

smedleyb

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Just looking at some pricing Mike and it seems like you'll have to fork over anywhere from 3-5K out of pocket to flip from one car into the next.  Never mind the time and headaches trying to sell your car (especially if you craigs list it to maximize your profit), negotiating with dealer, etc.

Since you've already downsized to one car, and your Trailblazer is paid off, I would be inclined to sit tight and focus on driving less to offset the higher gas costs.

Which car did you oust from the family fleet (did you sell it privately?), and how is life with just one car? 

arebelspy

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Figure out how many miles you drive/yr.  Multiply by miles per gallon each vehicle gets.  Multiply by cost per gallon in your area. Subtract the difference.  Divide what it costs to trade by that difference to find the breakeven point (i.e. saving 1k/yr will pay off 4k of trade in costs after 4 years).

EDIT: Here's an online calculator that may help: http://www.edmunds.com/calculators/gas-guzzler.html

That was the first one on Google.  If it's not great, there's other ones out there to try.
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Mike Key

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I used edmunds earlier and then figured what we could get trade in, plus cash I have on hand and what the TB needs (new tires) her driving and estimating $4.15 a gallon. We pay 3.66 now. It'd take 4 years before we reached break even on going to the smaller car.

Oddly enough, I love math, I'm just surprised that the gas hog is actually cheaper to own. So in reality, curbing driving habits is just as effective.

The TB has 72K on the odo so it still has some life left in it, even though it's resale value is tanking.

My wife is starting to get addicted to bicycling, so who knows, maybe we'll rarely drive it. :)

Thanks guys.

kudy

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Hmmm... I'm doing the same math myself.

I get about 20 MPG now, and I drive about 9000 miles per year, so that's $1,350 a year at $3.00/gallon or $1,800 a year at $4.00/gallon (where it seems to be headed in CO).

Assuming I don't drive any less (or more), and gas goes to and stays at $4.00/gallon, I could save $600 a year by upgrading to a car that gets 30 MPG; or nearly $800 a year if I get a car with 35 MPG.

Assuming gas will get increasingly more expensive over the next 10 years, it makes sense to me to get a car with a really high MPG now, and drive it for as long as I can.  If I averaged a savings of $800 per year over the next 10 years, that'd be awesome.

shedinator

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I used edmunds earlier and then figured what we could get trade in, plus cash I have on hand and what the TB needs (new tires) her driving and estimating $4.15 a gallon. We pay 3.66 now. It'd take 4 years before we reached break even on going to the smaller car.

Oddly enough, I love math, I'm just surprised that the gas hog is actually cheaper to own. So in reality, curbing driving habits is just as effective.

The TB has 72K on the odo so it still has some life left in it, even though it's resale value is tanking.

My wife is starting to get addicted to bicycling, so who knows, maybe we'll rarely drive it. :)

Thanks guys.

You might want to factor in life expectancy. The Soul is 6 years younger, so you'll break even after 4 years, but if the Soul can be expected to outlive the Trailblazer by 6 years (or more), that's 6 years that you can be investing money and earning interest rather than dropping money on a new car... The longer the Soul's gonna survive after the Trailblazer, the better.

onehappypanda

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I used edmunds earlier and then figured what we could get trade in, plus cash I have on hand and what the TB needs (new tires) her driving and estimating $4.15 a gallon. We pay 3.66 now. It'd take 4 years before we reached break even on going to the smaller car.

Oddly enough, I love math, I'm just surprised that the gas hog is actually cheaper to own. So in reality, curbing driving habits is just as effective.

The TB has 72K on the odo so it still has some life left in it, even though it's resale value is tanking.

My wife is starting to get addicted to bicycling, so who knows, maybe we'll rarely drive it. :)

Thanks guys.

You might want to factor in life expectancy. The Soul is 6 years younger, so you'll break even after 4 years, but if the Soul can be expected to outlive the Trailblazer by 6 years (or more), that's 6 years that you can be investing money and earning interest rather than dropping money on a new car... The longer the Soul's gonna survive after the Trailblazer, the better.

There's that.

But then, sometimes it still makes sense to wait it out and drive your current car into the ground. Particularly if you need some incentive to bike some more (helloooo $4/gallon gas) ;) And if you take care of this one (or just don't drive much) it could theoretically last more than 6 years, and you could invest that money now rather than later.

You'd be saving more money if you were looking at actual cheap vehicles too. The Soul is obviously not the cheapest option around, being fairly new. If you're dead-set on the Soul, in a few more years the newer models will be out and you could then snag one that's a few years old for much less. So that's also worth considering.

FWIW have you talked to a doctor about the motion sickness? Chronic motion sickness is often related to an inner ear issue or something treatable. If that's your only reason for buying a bigger, less efficient car, it'd probably be worth looking into medical treatment.
« Last Edit: March 10, 2012, 10:15:20 PM by onehappypanda »

Mike Key

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The Soul actually gets great gas milage, and is a smaller vehicle, but it's the seating postion that really helps her, it sits more like an SUV even though it's a lower car. We've found a few 2010 Kia Soul's for 12500-13500 which is my price range. But when you factor in this states 8% tax and $400 registration, then that 13500 becomes more like 15K out the door. The lower cost Kia Souls had close to 40K on the odo. Which returns us to us to the longevity issue.

As for how long the TB will last, I think you're right. The milage isn't that high yet, and I stay on top of maintenance. I would wager 3-4yrs of life left on the TB before major repairs if I don't include the basics, like fluids/tires/brakes. It might even be more practical to drive the TB for another 2-3yrs and then purchase a used Kia Soul with more deprecation when the TB rolls over 100K.