Saving Money and Gas!

In my work in the car financing industry as a loan officer I often see people looking to save money by trading gas guzzler cars and trucks in favor of smaller cars and even Hybrids. These people say it is better for the environment and better on your pocketbook. Both good things right? The answer is an emphatic YES!!!!! However, are these techniques really better for our pocketbooks or is that what the car industry wants us to believe? Take a look at some numbers:

Average Cost of a New Hybrid Car: $23,000

Financing a Hybrid Car with $6000 down, 6%, $350/Month, 60 Months:

Finance - $18072

Pay - $20962

Average Cost of a Used Hybird Car: $13,000

Financing a Used Hybrid with 2000 down, 6%, $357/Month, 36 Months:

Finance: $11,765

Pay: $12,885

Buying a non-hybrid car can often be $5000 less:

Used Tradition Car: $8,000

$0 down, 6%, $265/Month, 36 months

Finance: $8,710

Pay: $9,539

New Traditional Car: $18,000

$2,700 Down, 6%, $356/Month, 52 months

Finance: $16,261

Pay: $18,507

Gas Cost (using $2.75/gallon on a 500 mile trip at 55 mph on generally highways)

-Choose these stats because vehicles keep their best mileage at 55 and lower, and flat highway travel is the best for comparing averages)

Hybrid: 45 mpg, uses 11.12 gallons of gas, $30.56

Tradition: Using 28 mpg, uses 2.68 gallons of gas, $49.11

In other words you will save an average of $19/500 miles, and $570/year by driving a hybrid.

How much do you spend overall, including fuel during and after loan, assuming vehicles are kept for 10 years (Both used and new believe it or not). Cost of car repairs not included, besides oil changes ($25, 4/year)

AND THE ANSWER IS: YES!!!!! Hybrids cheaper even when financed when comparing vehicles kept for ten years. If you finance a used hybrid you must keep it for more than 9 years to save money, while a new hybrid only needs to be kept for more than 6 years to save money.

Hybrid New: $31,130

Hybrid Used: $23,167

Trad. New: $33,732

Trad. Used: $23,732

New Hybrid Fuel Costs

$4584 -During Loan

$4584 -Loan Paid

Used Hybrid Fuel Cost
$2750 -During Loan

$6417 -Loan Paid

New Traditional

$6482 - During Loan

$8250 - Loan Paid

Used Traditional

$4419 -During Loan

$10313 -Loan Paid