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.