Shortly afterward, the price of a gallon of gas tumbled from $4 to $1.35. Problem solved.

http://www.repofinder.com

It’s free to use and links buyers directly to credit unions selling repo cars.

The formula is simple… Say for $100 at $4gal you get 25 gallons of gas. At 20mpg in the vehicle you get 500 miles out of that 25 gallons.

Average motorcycle gets around 50mpg, so you still have to buy 10 gallons in order to make up that 500 miles that could have went toward the vehicle. 10 gallons is $40. You only made up $60 of the $100 spent. Now you have to make up that $40 which would have been another 200 miles on your vehicle. 200 miles is another $16 worth of gas for the bike. You only saved $24 of the $40. Now you have to make up another 120 miles for that $24 which costs you another $9.60 for motorcycle gas. It just keeps going until the last dollar is made up which means it will take around 900 miles to make that $100 up. So, $3,000 motorcycle will require 27,000 miles to simply make up the base cost of it. Add gear, insurance, tires, repairs, maintenance, oil.. etc.. just keeps adding up.

Same formula applies to new vehicle price differences yet the mileage is far far greater as the difference between old mpg and new mpg decreases.. say 20mpg going to 35mpg vs 20mpg going to 50mpg.

Bottom line…changing vehicles and buying motorcyles just for gas reasons will never make economic sense.

In my case, it made sense to buy new even if I take a couple grand hit down the road on re-sale and/or a grand a year in overage. Of course, one major repair on your used car and there goes the savings.

Also, no one has brought up safety differences in old vs. new. Everyone says “just get a used Honda”. Well, I have a used 1994 Honda and I’d not be too excited to get in a crash with it. My new 2008 Honda Fit has tons of cargo space AND industry leading crash test ratings…plus I push the upper 30′s on MPG and think an efficient car from a reputable manufacture should hold its value better than most over the next few years. What value do YOU put on safety?

Try running that calc at $8,$9,$10?

$8 gas the new car edges ahead, $9 gas the new car wins by $350 a year, $10 gas the new car goes out to $700 a year better…of course, if/when we hit $10 a gallon, there will be so many fundamental changes it’s hard to really run an estimation as public transit costs, repair costs, everything gets more expensive.

I am also constantly amazed that people who complain about gas prices still drive 80mph on the freeway…

First, sometimes folks just want to have an excuse for a new car. The one that most often is cited is no repair bills (but mpg could be used as well). The problem is that the monthly payments aren’t compared with the monthly repair costs. If they were, they would see that on an annual basis, people pay $5,000 for a new car to avoid $800 a year in repair and maintenance for an older car.

Second, we don’t tend to look at our total cost of transportation. This is where we should have our focus. The issue isn’t 15mpg versus 35mpg, as if driving our car is the only option available. The issue is the amount of money we spend getting ourselves from one place to another. If we move nearer to where we go often, then perhaps the need for a vehicle diminishes considerably or disappears altogether.

Personal Comment:

The best approach to saving money on gas is to use less of it to begin with, and use it more wisely when we do.

I live in the country, and work from home. Some folks go to town as part of their entertainment, whereas I stay at the house for two weeks or more without using my vehicle. I drive to town when I need to, not for discretionary things. How much gas (and cost) do you think I save by not operating my car for two weeks or more? Plenty, regardless of my mpg.

I have cut my local consumption of fuel by about 75% from what it was three years ago. That is a huge dent in my overall transportation cost.

If we think hard, there are dozens of ways to save money on gas, save gas, and reduce our cost of transportation. We are only limited by our imagination and our ability and interest to sit down and carefully analyze the situation.

Thanks again for a clear analysis on this topic.

Clair