Graduate With a Profit : Make Money While in School

One of my good friends was driving a big Dodge Durango SUV and just recently traded it in for a brand new 2008 Honda Accord. He traded it in to save money on gas.

Edmunds has a really neat new feature called the “Gas-Guzzler Trade-In Calculator” which calculates about how long it would take for you to start realizing an actual savings. From their website, here is the example they used:

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A Typical Example
A classic situation might be a person who wants to buy a Toyota Prius and trade in a four-year-old GMC Yukon. We ran this situation through the calculator and came up with these figures:

• The Yukon is worth $16,090 in this market.
• The price of the Prius is $23,903.
• The balance is $7,813.

We put in 1,500 miles driven per month and changed the pre-populated
price of gas from $4.25 to $4.59 per gallon. We then hit the
“calculate” button and got the answer. The calculator told us that we
would be saving $312 per month in the cost of gas. However, given the
fact that it would cost us at least
$7,813 to make this switch, it would take 25 months (or two years and
one month) before we would begin actually saving money on gas.

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My dad told my friend not to do it for this same exact reason, and he was right. If you are going to get a new car to save gas, at least do it with an educated research backing it - dont do it on a whim, and DEFINATELY dont buy a BRAND NEW CAR if that is your reason. The ammount of gas money you would be saving would be completely erased since you are PAYING THOUSANDS of dollars just in depreciation of the car, ontop of normal gas and maintainence.

But for the record, I am a proud supporter of anyone that drives more gas/eco friendly cars. For more detailed research on car mileage, go to www.fueleconomy.gov.