When Not to Buy a New Car

Gadabout has been driving his Chevy Trail Blazer 600 miles per week lately due employment factors. He is averaging 19 MPG resulting in a fuel consumption rate of 31.6 Gallons per week. At $3.00 per gallon my fuel bill amounts to $94.74. The question I ask myself is, “should I buy a new car, and if I do, what car is it and should I keep the Chevy.”

The Trail Blazer has been a winner. It cost $24,400 new, has never coughed and does okay with overall performance. Besides all that there are models available that I can fit in, get better mileage and don’t have 80,000 miles on them. After consideration and analysis, I have determined that buying a vehicle to save fuel does not save me any money. It would be emotional to buy a new car at this time, so long as the 2003 Chevy keeps humming.

Here’s why:

- We’ll use the Pontiac Vibe as a baseline. A fully loaded Vibe can be had for $20K (Gadabout’s brother works for GM so he gets a discount).

- The Trail Blazer is worth about $7K with a trade in. So we are looking at an outlay of $13K for the new Vibe.

- The Vibe would most likely average 30 mpg, resulting in a monthly savings of $34.74 per month. That equals $1806 per year.

- After 1 year the Trail Blazer will be worth $6K and the Vibe about $16K. This means that I will still be ahead by $1,200 by keeping the Chevy.

- After 2 years it is the same story; the Chevy is worth $5K and the Vibe $12K (at best).

- The rubber and brakes have been replaced on the Chevy, so with any luck it will hold up nicely.

You see, the problem is that cars are designed and manufactured last a long time. Couple that with rapid depreciation rates after the initial buy and you end up with awkward choices. It is tough going green when the numbers don’t add up. The point is that beware of the myth that you’ll save money if you buy a smaller car. The wise run numbers – Gadabout runs the numbers.

The plan is to buy an economical vehicle once gas hits $4.00 per gallon, or when the Chevy hits 150,000 miles. And of course if it leaves me high and dry someday on a dark and rainy night I’ll toss it to the curb.