Trading Your Gas Guzzler

Here is the reference to the article about which I am about to rant: http://biz.yahoo.com/brn/080502/25295.html?.v=1&.pf=family-home You can also find the same article here: http://www.bankrate.com/yho/news/car-advice/20080502_gas_guzzler_cost_a1.asp?prodtype=auto

Terry Jackson's article entitled, "Trading in Gas Guzzler May Cost You" is misleading at best. He uses a convenient (for him) scenario, the only practical application of which is to support his opinion. He compares a paid-off, non-hybrid SUV to a brand new hybrid SUV. If a person wants to save money in the real world, this is not the trade they are going to make. First of all, most people live with the reality of car payments. Therefore, that Ford Expedition that Jackson wants to trade in is probably still going to have payments. Factor that into the equation and see how it comes out. Furthermore, if I wanted to save money, I wouldn't go and buy the same type of vehicle. What if someone traded a Ford Expedition (with payments) for a new Honda Civic? My Civic, which I bought brand new costs me $211 per month and gets a reported 38mpg (I received $500 in trade-in value from my previous Saturn in order to get that monthly payment). What would be the savings profile then, of a comparison between a Ford Expedition with payments vs. a Honda Civic with payments? The question then becomes a matter for the consumer of, "Do I really need to be driving an SUV and why?" Because, an SUV costing you about $450 per month will cost you $5400 per year, whereas my vehicle costs me $2532. Also, as Jackson notes, an Expedition spends about $3500 per year in gas, whereas mine would use less than half that (based on the fact that an Expedition gets 16 miles per gallon whereas mine gets 38). So, let’s give the Expedition the benefit of the doubt and say that my gas expense is exactly half of its, then do the math. $5400 - $2532 = $2868. $3500 - $1750 = $1750. Thus, the combined savings of payment + gas, $2868 + $1750 = $4618. And that is what consumers really need to be considering. Sports Utility Vehicles really don't have much practical utility in modern society.

Then there’s this: you see all those forwarded emails about how we can affect the price of gas by forwarding an email to 10 people telling them to use a certain brand of gas on a certain day, and that if we could only get 3 million people to do this it would force some price war between companies and they would lower their prices…yada, yada, yada…Well, what if, instead of that, every person who owned an SUV that can’t come up with a legitimate reason for why they absolutely need to have it (people can learn to drive without 4-wheel drive in the snow--I've been doing it for 16 years without incident, and have never even bought a set of snow tires...the powers that be simply know how to market to the masses, and the masses simply believe them!!) traded in their vehicle for something that got twice the gas mileage? That would have a significant impact on demand across the board and would have a much stronger effect on prices than a email chain gimmick!