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Cheaper Transportation: We Downgraded–What’s Your Plan?
I realize there’s news today that Saudi Arabia plans to increase oil production next month (see UN chief: Saudi Arabia to boost oil production), but I’m not optimistic that transportation & commuting costs will return to “normal”, at least for any meaningful length of time.
Here’s what we did when we saw no end to the rising fuel costs to get to a monthly budget surplus–and yes we planned it this way.
Downgraded Our Vehicle
At the end of last year we got rid of our nice & shiny 2004 gas guzzler and bought an older, smaller vehicle (but still an SUV). We haven’t owned a vehicle this old for ages (as our main vehicle) and although this vehicle has better gas mileage than what we originally had, it certainly isn’t that great when compared to some of the new cars…but here’s what’s happened from January to June of this year:
- So far we have saved over $3,600 in car payments, fuel, lower plates & insurance costs. That leaves us with a lot of room to accommodate rising fuel costs.
What We Looked For:
We determined what features we really did need and came up with:
- A 4×4 vehicle (the winter months in my part of the world can get pretty crazy)
- Shiny exterior not important, but a well maintained, clean & reliable vehicle was top priority
- Although we went smaller, we still needed some size to accommodate our needs and chose to sacrifice some fuel efficiency to get that
- Price tag had to be reasonable enough for us to pay cash: no car payments.
Investing In A New Vehicle: Now’s Not The Time
Buying a new vehicle has almost never been a smart investment, as soon as you drive one off the lot it depreciates in value–we know that. But in today’s world we’ve been shown (loud & clear) how fuel costs can deeply affect our household budget, the market has shifted from “Comfort & Size” to “Budget Protector”…we’re looking for a vehicle that won’t make us slaves to the gas pumps.
The problem is: there really aren’t any smart choices for us on the market right now, at least ones that will be smart for a good 5 to 10 years (to justify the cost of purchase). And I don’t think there will be wise buys for at least another 5 years or so (considering the new models that will be rolled out–making today’s new purchases the gas guzzlers and hard to sell). If you have a gas guzzler and you’re wondering if buying a spanking new vehicle for less painful totals at the gas pumps is your answer, here are a few articles that I found interesting:
- Don’t let rising gas prices push you into panic selling
- Hybrid vs. Gasoline Vehicle Comparison – Are Hybrids Worth it?
- Tips for selling a large vehicle — and reasons to hold off
- Want to sell your gas hog? Do the math first
The solution for my household was to downgrade and remove the car payments to make room for fuel costs that we have no control over, ride things out (in a less shiny vehicle) until our needs are better met by the auto manufacturers.
More Reading:
“The real concern,” said Nathaniel Keohane, the head of economic policy and analysis at the Environmental Defense Fund, “should be our vulnerability to $7-a-gallon gasoline that is a function of global demand and stagnant supply.” Goldman Sachs recently suggested that $7-a-gallon gas was conceivable. Source: NYTimes.com
- Gas prices prompt SUV drivers to trade in vehicles just as market slumps
- Rising Gas Prices Finally Kill The Once-Mighty SUV
- One way to handle gas prices: Move
If you already have a vehicle fully paid for and no car payments, I’d hold on to it for now instead of going into debt for a more fuel efficient car.
Update: Removed dead links
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Or you could, you know… buy a bike.
We are saving on fuel and vehicle costs by only having one car for myself and my husband. We picked a house on the bus line and close enough to his work so he can walk sometimes. When I get a job I will also look downtown. We have the same car that we’ve had since 2001, long since paid off and it gets great mileage.
I have one Renai (and use it too–except in the winter, lol), thanks
.
Melsky we have a small older truck that is in good shape and super great on fuel, we try to use that when it’s feasible (only seats two).
The money that we’re saving every month has been dramatic and we’re loving it!
We bought a motorcycle and hubby drives it to work everyday. He drives 70 miles a day and the gas savings is amazing. You must take in consideration the added cost of insurance and it is more at risk for accident -you just have to weigh it out to decide if this is feasable for your family or not. Even with 31.00 a month on insurance we are still way ahead.
Try checking out the Drive $marter Challenge (www.drivesmarterchallenge.org) to help save money on gas. You can enter your specific vehicle data and figure out how much money you can save my taking six fuel-efficiency steps. They also provide other fuel-efficiency tips to help you save on gas costs.
Haven’t tried carpooling yet but I’m tempted to…
WNYCarpool.com is our local carpool website. Maybe your area has one??
or
http://www.erideshare.com
Would use these carefully, including asking for references.
We have one car, paid off, and completely overhauled, compliments of Costco, for putting the wrong gas in the underground tank and they picked up the repair tab. We are 2 blocks from a main bus line. Where we live, everything is within walking distance: the pharmacy, bank, grocery store, a small strip mall, and across the main drag, a major shopping center. I bought a bike. Hubby wanted to buy me a scooter and I said that needs gas; why would I want to cater to the oil czars? Anyway I need the exercise.
No we are not going to downsize. I figure the economy is going to bounce back and everyone will be driving the big vehicles again anyway so why get rid of it. No I don’t go very many places but for now I am quite happy with my big truck. This is the same problem we had in the late 1970’s. Just hunker down and wait er out.
Another bonus to paying cash for a vehicle is not having to purchase full coverage auto insurance.
This doesnt seem a lil selfish to anyone?
i mean i kno the idea is to save some money but what about the environment
to me its a lil stupid and irrisponsible to be spendin money on an SUV you really dont need and guzzles alot more gas than getting say a nice AWD subaru station wagon
sure ur not as stylin and flauntin the status symbol of a huge comfy gas guzzler but arent the benifits worth it?
Terry that’s a jump in assumption IMO, some families do need the size and the 4-wheel drive (for example, winters are harsh where I live).