Want better returns? Drive a car with better mileage

OK I feel better. I think that we will see 3.00/gallon by this time next year. I only wish that I had not bought a house during the Boing bust in 73-73 in Seattle. Oh well.

 

great article~!

the math is eye popping!

 

The flaw in their logic is the implied assumption that a different car must be a new car. You'll do better over the life of the car with a late model economy car than with a brand-new super-car like the Prius or Insight.

There's also the problem that not everyone has $20K to invest in a new car.

Let's try it a different way: Trade off your 35 mpg Civic on a 45 mpg Prius, drive 12,000 miles per year, and save 76 gallons of gas, or about $150 per year. That's a long-term investment, so an equivalent investment would be an insured bank CD at 5% (since we're talking very long-term) and you'd only need to invest $3,000 to yield the same return. Doesn't look so great anymore, does it?

The numbers in the article only work because they are using extreme car examples, they are leaving out the really economical option of a used car, they are assuming 15,000 miles per year, and $2 gas. And they are assuming that you are driving a gas-guzzler now.

Of course, if you are driving a gas-guzzler you are throwing a lot of money down the exhaust pipe, and maybe that's the real point of the article. But people who drive gas-guzzlers know they are throwing money away, and they have their reasons. Unpaved rural roads, the need to haul or tow big loads, or a stubborn belief, against all reason, but unshakable, that they are safer in a tank.

Me, I bought the Prius because it's cool and I wanted the safety features. I don't drive enough miles for the gas ever to amount to much.

 

5% for a CD??

where?