Trading in the SUV or truck?

cowboyindAugust 21, 2005

This is a bad time to do it. I was talking to a family member today about trading her SUV for a Jetta TDI or one of the hybrids. Those vehicles would obviously get a lot better mileage than the SUV. But how much can you really save?

First of all, trade-in values on SUVs and trucks right now are low due to the numbers of them being traded in for smaller vehicles.

Second, the actual fuel savings for most drivers even in these super-economical cars are not all that impressive compared to savings of not paying all of the interest and depreciation on a new car. An SUV that gets 17 mpg and is driven 15,000 miles per year will use 882 gallons of gas a year. A 40 mpg diesel or hybrid would use 375 gallons. At $3 a gallon, the diesel or hybrid is going to save the driver $1,500 a year. Compared to an older vehicle that's paid off or nearly so, it isn't worth basically giving away the SUV and then going into hock for $20,000 to save $1,500 a year.

Third, if it's really time to trade anyhow because a new vehicle is needed, the "hot" diesel and hybrid models probably aren't the best deals. A car that's going to get in the high 20s or around 30 mpg that you can get for $5,000 to $10,000 less than a diesel or hybrid is going to be cheaper in the long run for almost everyone. The difference between 28 mpg and 40 mpg for a 15,000 mile a year driver is only 161 gallons of fuel a year -- or about $500. Compare that to what you save by getting the car that's $5,000 (or more) less expensive.

Fourth, fuel prices will probably retreat some after Labor Day. Most analysts don't think the current prices are sustainable in the near term. Over the long term, prices will continue to rise, so obviously people should consider gas mileage in any new vehicle they buy. But it's not a crisis situation, and people may want to think over what vehicle's really best for them and take into consideration the total cost of ownership rather than rushing out right now and buying the one with the highest advertised fuel economy.

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mikie_gw

Maybe we all should start buying little 50cc honda scooters and scoot to & from the office.

A 19 yr old neighbor girl, first real job, part time 35 - 40 hrs at decent pay. Can afford the new/used car payment and swallows hard with insurance bills. With newness of a teen with her first car and she's discovered crusing around and filling the tank up is expensive.

Now she's taking the bus on weekends and evenings for her clothes shopping addiction and for city excursion trips to be mobile pal-ing around with friends.

    Bookmark   August 21, 2005 at 8:47AM
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cowboyind

My point was just that people should think twice before hastily trading in their current vehicle. If a 19 year old girl recently bought her first car, I hope she got something that gets fairly good gas mileage.

If a person could buy a scooter for $1,000, it could potentially pay for itself fairly quickly. If it were used to substitute for 5,000 or 6,000 miles a year on a car or SUV, the savings would not only be in fuel but also in depreciation, maintenance, wear and tear on the car. However, a person needs to learn to ride a scooter or any other type of motorcycle properly, and also buy and use proper safety gear, and it's still a lot more dangerous than even the smallest car.

    Bookmark   August 21, 2005 at 11:29AM
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bill_h

i wish the city here would allow the use of electric golf carts as tranportation on city streets with speed limits of 35 mph or lower, between that my bike and walking i would almost be able to rid myself of a car all togeather. i know this is allowed in some citys, but detroit is about 30 yrs behind. seems like this would be a good way to promote the use of electric vehicles, keep traffic slowed, and cut pollution and noise.

    Bookmark   August 21, 2005 at 6:47PM
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cowboyind

The only way you'll probably see golf carts made legal in Detroit is if the Big Three start making them.

    Bookmark   August 21, 2005 at 10:18PM
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bill_h

you mean the medium size 2. big 3 hahahahaha

    Bookmark   August 21, 2005 at 11:39PM
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gary__

**seems like this would be a good way to promote the use of electric vehicles, keep traffic slowed, and cut pollution and noise.**

And help save Social Security. Golf carts aren't very crash worthy at any speed.

    Bookmark   August 22, 2005 at 12:35AM
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bill_h

see theres another advantage!

    Bookmark   August 22, 2005 at 5:41AM
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RooseveltL

I think the purpose of moving to a more efficient car is more than simply the cost. Unfortunately, China is dealing with shortages of gas because of requirements vs. availability. I think the more gas guzzling SUVs we get off the road the better it is for all of us as our future may not increase gas consumption at 10% annually (or whatever the stats). However, I do not see this happening until our politicians force or tax these big vehicles for destroying our roads, killing more other drivers in accidents, and taking 10 minutes as a gas station.
If the $1500 is worth it - get a used Jetta TDI (maybe a year or two) before their prices start going up.

I would LOVE to buy a Passat Diesel but waiting for a 6 spd manual version.

    Bookmark   August 22, 2005 at 10:15AM
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gary__

RooseveltL, You've got to move to Portland OR. They'll love you there.

Someone taking a $20,000 hit to trade in early a perfectly good sport ute for something else for the sake of a few mpg's won't get the sport ute that was traded in off the road any sooner. I'm sure the car salesman, the finance company, and perhaps the person who wants a sport ute but can't quite afford a new one will appreciate your point of view. Not because they agree with your reasoning though.

    Bookmark   August 22, 2005 at 10:49AM
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